Job retraining called largely ineffective

WASHINGTON — WASHINGTON -- An internal Labor Department report says the government job training program for workers hurt by foreign trade is largely ineffective and used primarily as an income crutch for the unemployed.

The $200 million program, one of the biggest and most generous for unemployed Americans, was intended to help laid-off manufacturing workers who could show that imports cost them their jobs. They were to be retrained in computer operation, nursing, accounting and such trades as welding and air conditioning repair.


The Labor Department audit, based on an examination of 1,198 workers in nine states in 1991, found that only one in five of the retrained workers were steered into jobs paying at least 80 percent as much as their old jobs.

The findings were quickly cited by opponents of President Clinton's proposed North American Free Trade Agreement as evidence that the government cannot easily make up for job losses by retraining workers.


The report, completed two weeks ago and now being distributed in Washington, followed the inspector general's normal schedule for audits and the timing was unrelated to current concerns about the economy, including the announcement by the White House yesterday of plans to provide special retraining for people who lose jobs because of the trade agreement. But it has landed in the middle of the debate over the trade agreement, on which Congress must vote before Jan. 1, when it is intended to take effect.

The audit says that half the eligible workers did not even enroll in training courses but that they still collected the unemployment benefits meant to support them while they were in school. The audit, which conducted its own survey, says it is hard for the Labor Department to monitor the program because no one -- in Washington or in the states, which administer it -- keeps track of the workers once they leave it.

In 1991, the largest number of participants were laid-off apparel workers. Most of the others worked in the auto, electronics and other manufacturing industries.

The program, established under the 19-year-old Trade Adjustment Assistance Act, costs about $200 million a year and covers about 30,000 workers. It provides up to 18 months of unemployment benefits, three times longer than the unemployed normally receive.

"Briefly," the Labor Department's inspector general's office wrote, "we believe that the TAA program fell short of meeting the re-employment or training goals implied by the act. The evidence collected shows that the program was managed as an entitlement-compensation program rather than a training program."

The audit dwells mostly on the management of the program and a failure to steer more workers toward training in new skills.

In a thorny aspect of the debate, Labor Secretary Robert B. Reich frequently says that with training, workers will find good new jobs, but critics say the only jobs the economy is generating in any volume are relatively low-wage service jobs that require little training.

The audit found that within a year of completing the program 62 percent of the workers, retrained or not, found new jobs, that 18 percent were recalled by their previous employers and that 20 percent were unemployed. Of those who found jobs a third settled for wages of less than 80 percent of their prior wages. They kept the jobs for an average of just eight months.