This blog post is an excerpt from the Future of Work Initiative’s report Automation and a Changing Economy, released April 2019. The report is divided into two parts. Part I: The Case for Action, explores the impacts and history of automation, why this time may be different, and why action must be taken to maximize opportunity, minimize disruption, and ensure that the gains of automation are broadly shared. Part II: Policies for Shared Prosperity proposes 22 policy solutions to ensure that our increasingly automated economy is also one that promotes greater opportunity and broadly shared prosperity for all. Throughout the year, the Future of Work Initiative will republish many of these policy solutions.
Finding the time and financial resources to enroll in a training program can be difficult, especially for the unemployed. Tuition and fees for community college and vocational training programs can be expensive, particularly for workers facing financial constraints. Lifelong Learning and Training Accounts are designed to help address this issue over the course of a worker’s career. However, workers who become displaced have a much more acute need for immediate retraining and financial support that requires additional assistance.
Displaced workers can also face non-financial barriers to retraining, such as child or elderly care, transportation, and time constraints. For example, research has shown that individuals raising preschool-age children have half as much time available for academics, sleeping, eating, and leisure activities compared to their childless peers. Engaging in training is also a significant opportunity cost if doing so in lieu of returning to work, and if displaced workers need to take low-paying jobs just to pay bills, they will have little time to engage in training. This can be particularly challenging because while some retraining programs are short, others can require up to two years of coursework. And though unemployed workers can receive UI benefits while in training programs to offset the opportunity cost of not working, longer programs will often exceed the maximum length of UI benefits (generally 26 weeks). For these reasons, some of the most successful training programs, such as Capital IDEA in Central Texas, provide intensive wrap-around services to give students time to devote to training. Access to affordable childcare, in particular, is critical to student-parents succeeding in postsecondary programs.
Federal or state policymakers should provide displaced workers with training benefits that include vouchers and stipends. Vouchers should be worth up to $10,000, enough to cover tuition and fees for most two-year community college and vocational training programs, to be used for training programs that prepare the worker for high-growth, high-demand occupations as determined by workforce boards. Stipends would be paid weekly, for up to two years, while workers are enrolled in qualified training programs. They would help pay basic living expenses and additional costs associated with attending training, such as child care and transportation. The stipend would be an amount equal to a portion of the worker’s pre-displacement wages consistent with the state’s UI wage-replacement rate plus an additional $150 per week.
The Obama Administration proposed creating a Universal Displaced Worker program that provided training vouchers of up to $8,000 over two years for training in high-growth, high-demand occupations. Representative Tim Ryan (D-OH) recently introduced legislation that would offer a $8,000 voucher to all workers to pay for a short-term training program that teaches high-demand skills. Senators Joe Donnelly (D-IN), Kirsten Gillibrand (D-NY), Gary Peters (D-MI), and Debbie Stabenow (D-MI) introduced legislation that would provide training vouchers and income stipends to workers displaced by automation.