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Laid Off Workers Handed ‘Paltryâ€TM Govt. Grant Program

by Michelle Chen

Labor advocates say a new Department of Labor program does little to fund job training for the thousands of workers affected by auto-industry layoffs and plant closures.

July 31, 2006 –
A wave of layoffs and plant closures is plunging auto-industry workers across the country into crisis. But to the Bush administration, their peril provides a springboard for a controversial proposal for a new plan to assist “dislocated� workers: cutting them a check and letting them find their own solution.

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The Department of Labor is trying out so-called “Career Advancement Accounts,� offering experimental grants to several states affected by upcoming General Motors and Ford plant closures and shift reductions. Under the grant program, dislocated workers from those firms who meet certain eligibility criteria would receive up to $3,000 each, renewable once after a year, for job-related training and education.

The administration says that Career Advancement Accounts offer dislocated workers “flexibility� and immediate access to training, but others warn that the current plan would merely dole out political tokens to struggling auto workers.

Labor advocates say the funds are not nearly enough to move workers into quality long-term jobs, and would further erode an already weak system for reintegrating people into the shifting economy.

“We find it very cynical that the administration would try to address the pain that’s being felt in so many communities with a paltry amount of resources,� said Bruce Herman, executive director of labor-rights group National Employment Law Project (NELP).

Critics say that a pilot project for worker-training grants that would merely dole out political tokens to struggling auto workers.

Alan Reuther, legislative director for United Auto Workers, said that the sudden introduction of the grants – just as electoral races are heating up and Big Auto layoffs are drawing public scrutiny – came as a surprise even to the union. “It looks to us like it’s purely politically motivated,� he said.

Critics say that for GM and Ford workers on the verge of dislocation – defined under federal law as being laid off, terminated or otherwise forced out of work by industry changes  – $3,000 would barely dent the cost of substantive training or education.

The federal government already offers funding for worker training, but generally, individuals first create training plans with the help of career counselors, which are then funded on a case-by-case basis. According to the progressive think-tank Economic Policy Institute (EPI), a worker may receive a grant for as much as $10,000, which covers activities ranging from vocational training to enrollment in community college.

Overall, according to an analysis by the EPI and the NELP, the $27 million in combined state and federal grant money offered to nine states, including Michigan and Georgia, would have a negligible impact. While at most, only 1,000 workers per state would receive the full $3,000 award, the analysts argued that the grants look even more miniscule compared to the scope of the need: auto-worker dislocations may approach an estimated 250,000 workers nationwide.

Critics see the administration’s grant proposal as part of an underlying agenda to dismantle established workforce-investment programs.

Tracy Hall of Focus Hope, a Michigan-based worker education organization, said that while her group supports the effort to broaden access to training, funding initiatives like the Career Advancement Accounts are shortsighted. “Short-duration, inexpensive investments in human beings doesn’t get people into the economic mainstream,� she said.

Instead, workforce-development groups want the administration to invest more in foundational assistance programs created through the Workforce Investment Act (WIA) of 1998. Under the Act, community-based “one-stop� centers offer workers basic counseling and referrals, along with opportunities for more intensive educational services.

Such services helped Bob Tackett get back on his feet after he was laid off about five years ago from a Reynolds Aluminum plant where he had worked for 26 years. He had limited skills and knew little about his options, he said, but his outlook changed when his union connected him with a local one-stop center. Eventually, he received help through the Trade Adjustment Assistance program, which provides income support and training to workers dislocated by global competition.  He now does outreach at Workforce Connections, a one-stop center in Portland, Oregon. 

“People need that face-to-face, one-on-one encouragement and counseling that I don’t think they’re going to get with the [Career Advancement Accounts],� he said.

Critics see the administration’s grant proposal as part of an underlying agenda to dismantle established workforce-investment programs. The 2007 White House budget proposal also sought to restrict state and local control over funding and services, supposedly to prevent inefficiency and waste. The administration proposed essentially to replace existing programs with a system based on Career Advancement Accounts. The overhaul would reduce funding for states to a centralized block grant, while slashing reemployment and training funds by $515 million, or 13 percent, according to the research and advocacy group Workforce Alliance.

Even defenders of traditional workforce-investment programs agree that training should be made more accessible, and criticize barriers in the current system.

Though the Labor Department’s pilot program for Career Advancement Accounts is not as sweeping as the budget proposal, groups like NELP fear it would nonetheless undermine the existing workforce-development infrastructure. Critics point out that expenditures for distributing and administering the accounts would be capped at 5 percent of the grant. The funding limitations, they warn, could in turn bleed funds from the one-stop system. 

Nonetheless, even defenders of traditional workforce-investment programs agree with the administration’s goal of making training more accessible, and criticize barriers in the current system. For instance, WIA’s tiered “sequence� of services forces workers to first exhaust less costly, rudimentary services, like job-search assistance, before they can obtain funds for education.

Currently, said EPI Policy Director Ross Eisenbrey, “The system isn’t big enough, it’s not generous enough, it does have a lot of problems. But [Career Advancement Accounts are] not solving those problems. This is abandoning the system.�

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The NewStandard ceased publishing on April 27, 2007.

This News Article originally appeared in the July 31, 2006 edition of The NewStandard.
Michelle Chen is a staff journalist.

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