This paper, titled “TRAINING REFORM IN THE UNITED STATES: WHAT’S HAPPENING, WHAT’S NOT, WHAT SHOULD,” by Joel Rogers (June 1993), provides an introduction to the topic of training reform in the U.S. It addresses the reasons for the focus on training, the necessary reforms for U.S. training institutions, and the barriers to achieving those reforms. The paper is divided into three parts:
- General Background: This section discusses the increasing importance of human capital in policy debates and the Clinton administration’s likely initiatives in this area. It highlights that while U.S. college education is strong, its performance in post-secondary vocational training for non-college graduates, entry-level workers, and incumbent workers is poor compared to rivals like Germany and Japan. Improving the post-secondary, non-baccalaureate vocational instruction and job training system is a major political focus, as human capital is crucial for productivity, wages, and living standards. The Clinton administration has made training reform a centerpiece of its economic and social program, supporting initiatives such as a “school to work” program, a national skill standards initiative (Goals 2000), efforts to increase training for technology diffusion, and consolidation of services for dislocated workers.
- Obstacles to Reform: This part examines the difficulties in reforming the U.S. training system. Key obstacles include the highly federated structure of U.S. government, with numerous overlapping programs administered by various federal, state, and local entities. Significant distributional conflicts also exist, as providing equitable and increased training support to non-college graduates would require substantial annual investment from both government and employers. Beyond these, two critical barriers are highlighted:
- Weak Employer Demand for Skilled Labor: Despite an increase in demand for skilled labor since the late 1970s, overall employer demand remains relatively weak, particularly among smaller firms. Many U.S. labor markets operate on a “low-wage, low-skill” equilibrium, where firms opt for work organizations that require minimal advanced skills, thus weakening the impetus for stronger training efforts.
- Collective Action Problems: Training efforts face collective action problems, most notably the “free-rider” problem. Firms are reluctant to invest in broad training for their workforce if competitors can benefit from their trained employees without incurring the costs. This leads firms to train minimally or very narrowly. The paper notes that effective training systems often require substantial firm-based, workplace learning, which the current U.S. system largely lacks. Comparative solutions include limiting worker movement (like Japan) or compelling a large share of firms to train through state or private associative action (like continental Europe, particularly Germany). The U.S. lacks strong labor market institutions and practices on both the demand (weak unions, minimal wage regulation) and supply (weak associations among firms and worker organizations) sides that could address these issues.
- Elements of Design: This section explores programmatic and administrative choices for systemic reform. It raises questions about explicit demand-side policies (e.g., labor market regulation, technology diffusion, work organization changes, incentives for “right kind” firms), the balance between “statist” and market-driven approaches to training provision, the integration of classroom and workplace instruction, and the timing of investment in worker careers. It also discusses the challenges in setting standards (e.g., political difficulties in balancing business leadership with labor involvement, and design issues like voluntary/mandatory use and occupational vs. modular credentialing). The paper emphasizes the importance of linking technology utilization with extensive and “worker-friendly” training. Regarding the consolidation of services, it notes the need for streamlining numerous existing programs, but also the complexities and potential pitfalls of creating unwieldy bureaucracies without clear purpose or sufficient data.
In conclusion, the paper states that training reform is a prominent and enduring political issue with significant implications for the U.S. economy and society. However, current debates are often not well-informed, and experimental programs are unlikely to be closely monitored by disinterested bodies with systematic knowledge, leading to doubts and worries about the effectiveness of present reform efforts.
