Retraining displaced workers might be the thorniest challenge in economic development today. This is especially true when we’re talking about long-tenured workers in manufacturing, extraction and other industries. Nearly every day, we read about the plight of workers at plants like Indiana’s Carrier facility, in coal mines, in paper mills, and so on. A few figures tell the depressing story. Over the past two decades, about 3.2% of American workers are displaced every year (i.e. they lose jobs due to outside economic factors as opposed to poor performance). And, of this group, only half are re-employed within one year. (Note that these figures cover all workers in all industries; they also undercount displacement levels in downturns like the Great Recession. The displacement figures are higher for older workers and in industries like manufacturing, and conversely, the reemployment numbers are worse.) Moreover, the reemployed typically make less money than before, and have more tenuous employment situations, with a higher concentration of part-time or temporary work. So, we have a large base of workers pushed out of jobs through fault of their own, and with limited prospects of finding good new jobs at equal or better pay.
This depressing situation requires a rethink of how we do worker retraining and support. I’ve written about this a lot in the past, including this piece on re-employing coal miners. If you’re looking for an excellent guide to the challenges and potential solutions to the worker displacement challenge, I can highly recommend a new report from the Organization for Economic Cooperation and Development. Back to Work: United States offers a comprehensive look at what’s happening here in the US related to worker displacement and retraining. It’s a sobering look at the challenges, but it also reviews some new policy ideas and also digs deeper into some promising programs in Pennsylvania, Michigan and elsewhere. But, the bottom line remains challenging. When compared to other OECD nations, the US faces a larger job displacement challenge, yet it provides much more limited support and investment to assist these displaced workers. Jawboning employers like Carrier might help on the margins, but a more sustained set of policy solutions is needed.