Department of Labor $63.5 Billion Budget for 2017 Stresses Optimism, Training

The Department of Labor has asked for $12.8 billion in discretionary funding on top of $50.7 billion in other mandatory funding to feed training jobs for workers and other programs.  The Department of Labor has asked for the extra $12.8 billion to fund a variety of apprenticeship and worker-training programs, as the agency acknowledges Americans are struggling to compete in the workforce.

The Department of Labor has asked for $12.8 billion in discretionary funding on top of $50.7 billion in other mandatory funding to feed training jobs for workers and other programs.  The Department of Labor has asked for the extra $12.8 billion to fund a variety of apprenticeship and worker-training programs, as the agency acknowledges Americans are struggling to compete in the workforce.

“In today’s global and rapidly changing economy, American workers must have the knowledge and skills to succeed in middle-class jobs and employers require a skilled workforce to compete. The budget meets these needs with a package of investments that connects workers with good jobs, equips all workers with job-relevant skills, and ensures that employers can find the talent they need to grow,” the DOL said in a statement.

In addition to current programs, the DOL said it wants to implement the Workforce Innovation and Opportunity Act by creating a “technology platform” available to all 2,500 American Job Centers in the country. This “will allow job seekers to quickly view ratings for the job centers in their area” and report on poor customer service at current job centers.

The DOL stressed the value of apprenticeships and it wants to subsidize work-training programs that help workers “develop job-relevant skills while they are earning a paycheck,” the DOL said. “This proven training model is a “win” for workers and employers alike: on average, apprentices earn $50,000 a year and increase their lifetime earning potential by $300,000, and employers create a pipeline of qualified workers.”

To help support apprenticeships, the DOL said it wants to add $2 billion to its Apprenticeship Training Fund.

Youth Unemployment

The DOL also said it needed to tackle youth unemployment, which has grown significantly since the 2008 Global Financial Crisis and has seen little improvement, even while the labor participation rate among older workers has risen. The DOL wants to support young Americans by using $3.5 billion in funding for “paid learning opportunities”. These can include summer jobs and first-job programs for so-called “opportunity youths” who are out of school and out of work.

The DOL wants to spend $2 billion in areas with high youth unemployment, which it hopes will “transform communities struggling with high rates of youth disengagement, high school dropouts, and unemployment into places of opportunity for young adults.”  On top of that, the DOL wants to spend $1.75 billion on Job Corps—a program that currently serves 5,000 young people in America.

Unnecessary Licensing

In a surprise announcement, the DOL also admitted that America has a problem with unnecessary licenses and high barriers to entry.  Occupational licenses were recently highlighted by The Economist, who pointed out that it takes 890 days of training to become a barber in Nevada.

Arguing that this type of regulatory capture is exploited by entrenched workers and special interests to reduce competition, The Economist argued that it has made America’s labor market significantly less free than it appears.

The DOL, perhaps in response to this criticism, said that it would pay states to look for ways to address the problem. “The Budget builds on the investment provided in the FY 2016 Omnibus and provides a total of $10 million for grants to states and partnerships of states to identify and address areas where occupational licensing requirements create an unnecessary barrier to labor market entry or mobility,” the DOL said.

The DOL’s success in combating growing license regulations has been insignificant in recent years, while its rising expenditure on unemployment insurance and Job Corps have been sources of political contention for decades.