Subsidize new jobs for dislocated workers? by mattsteinglass
July 8, 2009, 4:08 am
Filed under: Economics, Education

Megan McArdle has an interesting idea: since job retraining tends to be pretty ineffective because it doesn’t offer real work experience, how about subsidizing $10-per-hour-and-up jobs for displaced workers? I find this interesting in part because it’s surprising to hear an idea like this coming from the laissez-faire side of the aisle, and it seems like an example of the way that productive compromises often emerge as part of the political dialog. (We have to do something for the unemployed; paying them permanent unemployment insurance seems less productive than retraining them for new jobs; job retraining doesn’t work very well because it lacks real work experience; how about subsidizing real jobs instead?)

But I also find it interesting because what Megan is talking about sounds like it fits more within the cadre of the German vocational education and apprenticeship system than within the American education and employment model. Germany has a much more widespread and comprehensive vocational education system than the US does, and apprenticeships are a mandatory part of the system. Large and medium-sized companies are obliged by law to take on apprentices in order to keep the system functioning. Germany’s system also goes along with legal requirements for professional qualifications that may seem ridiculous to Americans. (You have to have a degree to open a bakery, or even work in one. This creates a lot of rent-seeking behavior by professional guilds; there’s no need for the US to copy any of that.) Americans are rightly proud of the fact that the American employment culture allows people to change careers easily, and to go where the going is good as demand for skills shifts. But as Megan points out, career mobility in the US isn’t quite all it’s cracked up to be; it can be almost impossible to get that crucial first job when you switch professions. Having the state sponsor an apprenticeship system seems like an excellent way to facilitate such mobility.


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