Rethinking the Welfare State: The prospects for ... - e-Library

Rethinking the selfare state 196
Long-term remedial education
Although not strictly a job-training concern, the lack of high school education has been
found 58 to be the most serious impediment to employment for recipients of aid to families
with dependent children (AFDC, i.e. welfare) in the United States. As John Martin
argues, “It cannot be overemphasised that if young people leave the schooling system
without qualifications and a good grounding in the 3Rs, it is well nigh impossible for
labour market programs to overcome these handicaps later on.” 59 Indeed, the evidence
suggests that job-training efforts cannot be pursued in isolation from other considerations
such as primary and secondary education and adult literacy programs.
A Fraser Institute study recently concluded that government-sponsored training
programs in the United States have been largely unsuccessful in reducing unemployment,
increasing earnings, and reducing welfare dependency among disadvantaged groups (i.e.
poor single parents and youths who are high school drop-outs). 60 The study indicates that
US programs targeting single parents raised per-week earnings between US$2.18 and
US$19.96. 61 “In half of all cases, these training programs did not result in reductions in
AFDC receipts, and when they did, reductions ranged from 1.1 to 5.2 percentage
points.” 62 It is difficult to justify the sizeable public expenditures on such programs
(US$689 to $4,895 per program recipient) given the minor benefits accruing to
participants. 63 The results are equally discouraging in the context of ALMPs aimed at
disadvantaged adults and out-of-school youths.
The Fraser Institute study argues that the failure of the US training programs reflects
the low educational levels of program participants. 64 As many as 82.9 percent of
disadvantaged adults participating in the training programs had fewer than 12 years of
formal schooling. 65 Job training programs, either in the classroom or on-the-job, in many
cases prove ineffectual because the participants are functionally illiterate. Long-term
remedial training is necessary in such circumstances.
OECD countries have often discounted the importance of remedial training in
structuring their ALMPs. In developed economies, “workers are expected to do a wider
range of tasks both horizontally at the same level of complexity (i.e. job enlargement) and
vertically at different levels of complexity (i.e. job enrichment).” 66 Highly functional
literacy and the resultant skill of “learning how to learn” are critically important attributes
in today’s work environment. The importance of remedial education in equipping the
under-educated among the unemployed has been substantiated in other studies as well. A
1997 regional case study following mass lay-offs in a single-industry Northern Ontario
mining town found that training programs as a whole offered minimal benefits to laid-off
workers. Longer duration programs at the college level proved to be much more
effective. 67
Competitive active labour market policies
Competitive ALMP experiments have proved fruitful in a number of jurisdictions, and
the competitive model of choice has increasingly become a demand-side model: the
voucher system. Under such systems the government offers vouchers to unemployed
individuals who choose an ALMP provider from amongst a competitive pool. The