The impact of the budget battles in Washington, D.C. is now being felt in Washington State and in the WLP profession. The U.S. Department of Labor recently sent out an advisory to all states showing how much funding for the Workforce Investment Act (WIA) had been reduced by Congress. While these are not the only training funds states receive, WIA is one of the major sources of funds and representative of what is occurring to federally-supported training programs.
In the original appropriation by Congress, Washington State was slated to receive $73.5 million in total across the four categories of funding, including Youth Training; Adult Training (generally, ongoing training programs, such as trade apprenticeships); Dislocated Worker Training (focused on people who have lost their jobs due to the recession or foreign competition and who need new skills to reenter the labor market); and Employment Services (this is synonomous with the WorkSource Centers in Washington State, which do all the intake and assessment, job serach counseling, unemployment claims processing, and related activities).
After the budget battle, Washington State's total funding was cut by nearly $6 million, to a new total of $67,679,710, a reduction of just less than 8 percent.
There are generally two reactions when looking at these numbers. First, many WLP professionals are surprised to learn how much funding for training is provided through federal programs. However, to keep this in perspective, let me note that as I reported in an blog entry a few weeks ago that current levels of federal taining funding have drifted down steadily since the 1970s; even before the cuts, funding is only ONE-FIFTH what it would be had earlier federal commitments to training been maintained at the levels of forty years ago. In other words (or numbers), the total might have been closer to $350 million.
The second reaction is that for all the sturm-und-drang of political theater, the cuts aren't that large. But again the context is important. The United States is in the worst economy since the Great Recession and the Skills Gap problem continues to grow. As Lawrence Summers, former Harvard University president and former director of the National Economic Council for President Obama observed in this past Sunday's New York Times Magazine,
"I worry for the medium and long term about where the jobs are going to come from for those with fewer skills. One in five men between 25 and 54 is not working, and a reasonable projection is that it will still be one in six after the economy recovers. It was one in 20 in the 1960s. That has potentially vast social consequences."
Part of this problem is the recession-induced lack of demand. But as Summers notes, a substantial part of it is a lack of skills, in other words, it is the Skills Gap problem. And, yes, the budget deficit is a concern, but if people lack the skills to perform jobs in the modern economy, they can't contribute much in the way of tax revenues.
What do you think? How big is the Skills Gap problem, and what will it take to solve it?