Job training programs are ineffective and the private market place can do a better job of that anyway!!

Job training programs are ineffective and the private market place can do a better job of that anyway. They should be cut and when Washington tries to get involved it usually messes things up!!! Cronyism is the result when the government tries to reward money for these programs.

August 9, 2013 3:22PM

Federal Job Training Programs and Crony Capitalism

The Reason Foundation’s Adam Millsap and Anthony Randazzo have an op-ed up at that cites examples of how federal job training programs are used to favor particular commercial interests. A snippet: 

Crony capitalism is when private interests collude with government to acquire subsidies or economic benefits that give them an advantage in the marketplace. Many job-training programs, such as the “On the Job Training Program” (OJT), serve just this purpose.

In many cases, the OJT program provides subsidized job training for specific jobs in specific areas—because the funds are limited, only certain employers will get the money. For example, in 2009, the OJT program provided a 50 percent salary subsidy to train chemical composite technicians for Renegade Materials in Dayton, Ohio. The company and workers both benefited from the program, but the subsidy provided Renegade with an advantage over its competitors, who did not benefit from free taxpayer money.

Similarly, Canadian company Energuy built its U.S. headquarters in Sacramento, Calif., to be near an OJT program called JobLink. Energuy, which hires workers to evaluate the energy efficiency of home appliances, has been expanding in other parts of California as well, specifically targeting areas that have subsidized training. The company has become so dependent on the availability of training subsidies that, according to its president, Energuy has “actually had meetings where we’ve said we’ll only move forward if we can get a subsidized employee; otherwise we’ll have to wait until we’re financially ready.”

Sometimes job-training subsidies help a range of firms in a particular industry, as was the case with the $22 million used to help lobstermen in the Northeast improve their businesses with government-funded business-plan training in 2010. These subsidies favor people currently in business over those who might want to enter the industry.

Millsap and Randazzo also point out that job training programs are ineffective and that funding is allocated to the states haphazardly. They correctly note that alternatives exist in the private sector, which is where responsibility for training workers belongs. Over at Downsizing Government, a Cato essay on federal employment and training programs goes into deeper detail on many of the themes discussed by Millsap and Randazzo. 

Unfortunately, both Republicans and Democrats support the federal government continuing to stick its nose where it doesn’t belong. As is the case with pretty much every policy issue Washington (mis)handles, the two parties largely only differ on the details.

Related posts:

Cartoon from Dan Mitchell’s blog (Cronyism is hurting the economy)

I have put up lots of cartoons from Dan Mitchell’s blog before and they have got lots of hits before. Many of them have dealt with the economy, eternal unemployment benefits, socialism,  Greece,  welfare state or on gun control. The Corrupt Nexus of Big Business and Big Government February 18, 2013 by Dan Mitchell I did a video […]

Open letter to President Obama (Part 380)

Milton Friedman said that getting George Bush I to be his vice president was his biggest mistake because he knew that Bush was not a true conservative and sure enough George Bush did raise taxes when he later became President. Below is a speech by George W. Bush honoring Milton Friedman: Milton Friedman Honored for […]

We got to cut corporate welfare out of the budget too!!!

We got to cut corporate welfare out of the budget too!!! JULY 23, 2013 5:40PM Feds and the States Tag-Teaming on Corporate Welfare By TAD DEHAVEN In a recent op-ed for the Indianapolis Star I discussed the symbiotic relationship between federal and state government when it comes to doling out corporate welfare subsidies. The focus was primarily on Indiana, but […]

Religious freedom include discussing creation in the classroom?

Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: