Thoughtful Policy Paper #2 offered by the Financial Services Forum

(For post @ paper #1, click here)

Proposed Adjustment Assistance Program

Building on their previous work, authors Grant Aldonas, Robert Lawrence, and Matthew Slaughter propose a new Adjustment Assistance Program to help all workers transition as their jobs and careers (and the skills required to do them) change.

The proposed program would build upon the current structure (enabled by Workforce Investment Act Legislation), taking advantage of the local participation, partnerships, knowledge, and strategic capacity that has developed over the past (economically turbulent) decade.

Expanded Role for Worker Transition Programs

But it also suggest an expanded role for worker transition programs – one aimed explicitly at continuous employment, lifelong learning, and economic security and not just short-term training and job placement.

Our current (short-term job-training and placement) system assumes that the point of training is to connect people to paying jobs as quickly as possible. But we have whole industries emerging, changing, relocating, and redefining themselves, while adopting new technologies and processes that make the same jobs barely recognizable to people who did them a decade ago.

Training No Longer Occasional

Training is no longer an occasional,  short-term, “gap filler”, it’s a constant – for people with jobs and those looking to find (or make) new ones. And for many workers, transitions are likely to be aimed at whole career changes, not just new jobs.

Jobs ≠ Economic Security

Moreover, jobs do not equal economic security. Income and insurance are also critical enablers of individual, family, and community prosperity.

The proposed Adjustment Assistance Program recognizes these labor market realities. It focuses on training and development for continuous employment (not just jobs) and economic security (not just wages).

Main Elements of Proposed Adjustment Assistance Program

While there are devils in the details, the program represents a break from out-dated program models.

Main elements include:

• A wage-loss insurance program.
• Provisions for continued health insurance (while eligible for unemployment insurance).
• Allowing workers to access saving and other assets without penalty.
• Expanded eligibility for federal training programs in combination with tax incentives for investments in lifelong learning (for employers and workers themselves).
• A wage tax (1.32%) to support an increased investment in worker adjustment programs and services.