Depression-era program struggles to fill post-recession needs

Tuesday, January 15th, 2013 

Rick McHugh may be a labor attorney, but it doesn’t take his years of experience to explain how the labor market has changed over the past two decades.

“The last time I looked for work, you wrote a cover letter on nice paper and put it in an envelope and put it in the mail,” said McHugh, who turned 50 this year. “Some people may not understand how hard it is to find a job and the amount of work that’s involved.”

As more than 12 million Americans continued to be counted as officially unemployed in December, a number relatively unchanged over the past year, much of the debate has focused on extending unemployment insurance benefits. Nearly 40 percent of the unemployed have been without a job for at least six months, according to the Bureau of Labor Statistics. At least 500,000 people reached the end of their federally funded benefits by late 2012 and three-fourths of them still didn't have jobs, according to the National Employment Law Center

The U.S. Employment Service was created during the Great Depression as a proactive means to combat historically high unemployment levels. Its purpose is to provide a universal, public exchange to connect employers to workers. McHugh said greater investment in the employment service could help stem the current unemployment crisis.

“With a relatively small investment, you can have a big payoff helping people find jobs that are better matched for their education and experience,” he said.

In a report for the National Employment Law Center, McHugh and others suggest an additional $1.6 billion investment in the employment service could assist nearly 3 million Americans looking for jobs by:

  • Improving and expanding job-placement services
  • Creating a closer relationship with unemployment-insurance claimants thorugh interviews and intensive job-search assistance
  • Increasing the number of people who receive counseling before entering job-training programs

Orphan program

John Quinterno

Photo by Nathan Clendenin

John Quinterno

Funding for the employment service has been between $700 and $800 million since 1984 but would be more than twice that if adjusted for inflation, according to the National Employment Law Center's report. But funding is only one challenge faced by the employment service. Its role in workforce development had been “forgotten” by Congress and the policy community, said John Quinterno, an employment expert and principal at South by North Strategies in Chapel Hill, N.C.

The Workforce Investment Act of 1998 (WIA) created a One-Stop system operating in 2,700 offices nationwide. One-Stop career centers serve not only the labor-matching functions of the employment service but also offer training opportunities sponsored by the federal government for various classes of workers. According to Quinterno, the “big picture” was missed in the move toward consolidation.

“We created these different programs at different times. We haven’t always thought about how they fit together,” he said.

Perception and disconnect

While one-stop centers are generally thought of as unemployment offices, the relationship between filing for unemployment and the employment service itself has changed. An unemployment insurance system that allows the unemployed to apply by telephone or online “has broken that link with the employment services office in the past,” said McHugh.

The move toward more technology-based, self-directed models of job searching can save money but outcomes can be mixed. Todd Miller of Paola, Kan., was frustrated by the lack of personal interaction at his state’s KansasWorks offices.

“Their response to almost anything is to use our website,” said Miller. “I haven’t ever had anyone ever do anything to help with an actual job lead, and, in my opinion, that’s what they should be doing.”

Despite intending to serve all workers and employers, higher-skill employment can be difficult to come by through the employment service. Catherine Wilde of Shelbyville, Tenn., was frustrated by her experiences after being laid off in 2007. Wilde went a year without finding work, using a healthy portion of her retirement savings to hang on to her home.

“As a middle-aged, overweight, female college graduate, I was unsuited or overqualified for most everything they had, which was mostly manual factory and labor,” she said. “They were lovely and nice and sympathetic but also terribly understaffed, with too few people trying to cover too many bases.”


Bryan Wing

Photo by Bryan Wing

Bryan Wing

Bryan Wing of San Jose, Calif., found himself unemployed three years ago for the first time in his nearly 30-year tech career.

“It sucks. I worked myself up from the bottom. I work real hard. I’ve accomplished a lot, and the last three and a half years have been total hell,” said Wing.

Wing is employed today and credits his local employment services agency, ProMatch, in Sunnyvale. ProMatch is the local chapter of a program started 30 years ago in California to “help jobseekers help one another," said Bob Withers, career counselor with the ProMatch program, the largest in the state.

ProMatch receives federal and state funding and is run by a coalition of local public and nonprofit employment agencies. The program is designed to assist workers with the brave new world of the employment search, including building a LinkedIn profile and providing interview "dress rehearsals." Participants are divided into “Success Teams” for accountability and networking purposes. ProMatch members also cultivate leadership and management skills by volunteering at least four hours each week facilitating workshops and meetings.

“Too often people try to do it on their own without a lot of backup or follow through, and ProMatch provides a lot of ability to talk to others,” said Withers.

ProMatch alums also serve as facilitators and mentors, further building upon the network available for jobseekers. As Wing faces joblessness again when his interim postion ends this month, he hopes his experience with ProMatch will give him an impressive edge.

“The experience is much better than at a normal employment center,” said Wing. “It’s like LinkedIn on steroids.”

What Went Wrong

Donald Barlett and James Steele are revisiting America: What Went Wrong, their landmark 1991 newspaper series, in a new project with the Investigative Reporting Workshop. Over the next year, the project team will examine how four decades of public policy has shaped America's ongoing economic crisis.


Back Story

The authors talk about What Went Wrong

Donald Barlett and James Steele talk about the project, and why they decided to revisit a book they wrote two decades ago, in a series of video clips produced by the Workshop.

Nation's Story

Who pays the taxes?

Who pays the taxes?

We feature charts, maps, photos and other visualizations that reflect the state of the economy as part of our What Went Wrong project. This column chart shows the growing disparity between what individuals and corporations pay in taxes. In the 1950s, the difference was 22 percent. Recent figures show the difference is 62 percent.

Rags to rags: Economic mobility hard to come by

New Pew Center on States report confirms that moving up the American economic ladder is difficult, even though most people have more income than their parents.

Homelessness takes it toll on Florida's youngest

Florida, as a center of the housing boom, still struggles to recover from the Great Recession. Financial stresses and widespread foreclosures have placed families in precarious situations, resulting in a spike in child homelessness. Susannah Nesmith reports in the Broward Bulldog.

Older workers face challenges in Silicon Valley

An advanced degree and experience in the tech sector should be a ticket to a job in today's economy. But older workers in the heart of the new economy, Silicon Valley, are finding their resume is not the issue. Aaron Glantz reports in The Bay Citizen.

 Subscribe to the RSS Feed

Read an Excerpt

The Betrayal of the American Dream on Google Books

The Betrayal of the American Dream on Google Books

Check out the first chapter of Barlett and Steele's 2012 book here.