South By North Strategies, Ltd.

Building Career Pathways In NC

The NC Budget & Tax Center recently released a report on the potential benefits of “career pathway” training models for workers, firms, and the larger economy. From the report …

Career pathways – “a series of connected education and training programs and student support services that enable individuals to secure a job or advance in a demand industry or occupation”– can be one effective response to this disconnect. Career pathways focus on easing and facilitating student transition from high school and low-skill occupations into community college or vocational training programs, and then to consecutively higher skill and higher-wage employment. In doing so, career pathways create structured avenues for workers to increase their skills through credentialed training programs that in turn allow these workers to move into higher-paying, more skill-intensive employment opportunities within their industry or occupation. In North Carolina, the legislature actively pursued career pathway programs as part of welfare reform in the late 1990s in an effort to help move program recipients into employment and self-sustaining careers. After some initial interest, the legislature stopped funding these programs in the early 2000s, but local workforce boards, nonprofit workforce intermediaries, and community-based organizations picked up the mantle from the state and began experimenting with various models of career pathways targeted toward different populations and industries.

False Skill Signals?

Lawrence Mishel of the Economic Policy Institute is skeptical of the claim that the US has a shortage of college graduates.

… This is because college graduates (those with bachelor’s degrees only) have not fared well in the labor market for at least 10 years—real wages are no higher than 10 years ago—while those with advanced degrees have seen their wages grow strongly. I have covered this ground in Education is Not the Cure for High Unemployment or for Income Inequality. In fact, those economists who argue that employment and wages are polarizing, such as Larry Katz of Harvard or David Autor of MIT, are pretty clear that employment outcomes for about half of college grads are part of the “middle” that’s faring poorly. That’s why it is misleading to use those analyses to argue that having more people go to college is the answer to growing wage inequality or middle-class wage stagnation; getting onto the better wage track requires either getting an advanced or professional degree (not just a college degree) or joining a clear subset of college graduates. That being the case, the arguments of those seeing “polarization” in the data lay out a very narrow track to good earnings and, in my view, further raise the issue of the need to make sure that those without college degrees, and many with college degrees, have good quality jobs.

Around The Dial – January 20, 2012

Economic policy reports, blog postings, and media stories of interest:

• Naked Capitalism points to the lack of action in housing policy.
• Economix discusses gaps in household wealth.
• Mark Weisbrot comments on the sad state of economic analysis.
• Martin Wolfe says Europe’s “Super Marios” need help.

Flexibility Isn’t Always Good

Off the Charts explains why increased “flexibility” in state unemployment insurance systems isn’t so good.

Letting states divert UI funds for other purposes would start the UI system down a slippery slope, even if those other purposes might benefit some unemployed workers, such as providing additional job training.  Among other things, states could replace state or local funds now used for job training or other such purposes with diverted UI funds and then shift the withdrawn funds to other uses, including tax cuts.  The net result could be a reduction in unemployment benefits with little or no offsetting increase in employment services.
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Similarly, waiving the prohibition against excessively burdensome administrative obstacles would enable states to reduce UI benefit costs and tax rates by making it harder for eligible people to participate in the program — a less overt way to cut costs than shrinking benefit levels or the number of weeks of benefits.
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Finally, the House provision could also allow states to impose new eligibility requirements not directly based on workers’ employment history, such as requiring UI recipients to have a high school diploma or GED.

How Did it Go So Wrong?

Mark Thoma asks how the Federal Reserve got things so wrong and how it can do better.

The Fed’s errors can be placed into two broad categories, the failure to ask the right questions before the crisis, and the failure to act quickly and aggressively enough once the crisis began. The first problem had a lot to do with economists’ undue faith in their own models and abilities – the financial meltdown problem had been solved so no need to worry about that – while the second problem is at least partly due to the way in which the public interest is represented on the Fed.
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I don’t know how to insulate economists from themselves, every few decades we seem to have the need to declare that we have solved important problems only to be spectacularly wrong, but the representation of the public interest in policy decisions can certainly be improved. That won’t fully overcome the Fed’s tendency to hesitate and take small steps when bold action is needed, but better representation would certainly give more weight to the public’s desire for the Fed to do its utmost to bring an end to the many problems that households face when the economy is operating at subpar levels.