Why do we need workforce development programs, and what would it take to design an effective one?

This section discusses trends in U.S. labor markets that have widened the earnings gap between high- and low-skilled workers, and increased the need for programs that help low-wage workers gain skills and advance. Autor and others argue that we have seen the labor market “polarize” over the last few decades: technology has allowed companies to replace workers who perform routine, middle-skilled tasks with technology, while opportunities have increased in the high- and low-skilled ends of the labor market. In a recent paper, Jaimovich and Siu argue that polarization is closely tied to the recent phenomenon of “jobless recoveries:” the loss of middle-skilled jobs has occurred almost entirely during the three most recent recessions. However, Holzer argues that Autor and his colleagues conflate “middle skill” and “routine” jobs—and that many non-routine middle-skill occupations are growing.

Whether or not middle-skilled jobs are disappearing, the earnings gap between high- and low-skilled workers has been growing. Goldin and Katz argue that technology is not the only influence; stagnating educational attainment has reduced the supply of skilled workers and rising demand for them has increased their earnings relative to their less- skilled counterparts. Carnavale and Rose argue that dramatically increasing the number of Americans who graduate from college could reduce the gap between high- and low-skilled workers’ earnings. During the Great Recession, less skilled workers lost jobs at an especially high rate. Blank notes that unemployment significantly influences the poverty rate. What should policymakers do about this gap? While many call for increased investments in training and higher education, the quality of primary and secondary education also play an important role. Heckman argues that we should focus on funding intensive preschool interventions, since they have high benefit-cost ratios in the longer term and programs for adults and even older children require significant remediation. Finally, Holzer et al. argue that both workers’ personal characteristics and unique employer characteristics make it difficult for workers to advance out of low-wage jobs and increase their financial security.

Chosen excerpts by Job Market Monitor. Read the whole story at  What we know about workforce development for low-income workers: evidence, background and ideas for the future