Training for older workers targeted

By Joel Dresang
Milwaukee Journal Sentinel

CHICAGO — Teaching old dogs new tricks took center stage last week at a two-day conference sponsored by the Federal Reserve Bank of Chicago.

Labor economists and policy-makers from around the country discussed the effectiveness of training older workers who lose their jobs through no fault of their own.

Statistically, older workers face longer periods without work after a job loss and suffer greater wage losses when they work again, researchers told the conference. However, some studies suggest that workers with multiple skills and those who earn credits at two-year community colleges could improve their prospects.

Each year, between 1 million and 2 million American workers lose their jobs, and the numbers may be growing in part because of global trade and technological changes, Charles Evans, director of research and senior vice president of the Chicago Fed, said in opening remarks.

For workers 50 and older, finding a new job is difficult and wage losses average 39 percent two years after job loss, according to one study, or about twice the rate for younger workers, said Todd Elder, a labor economist at the University of Illinois at Champaign-Urbana.

In his research, Elder has found that older workers often are willing to accept huge wage cuts for full-time jobs when it means getting health insurance. He also found that although some older workers take longer to get new jobs because they prefer more leisure time, for the most part, the hiring market for such workers is weak.

"It seems like we should be worried," Elder said. "It seems like lack of market opportunities might be what's going on here."

Peter Kuhn, an economist from the University of California, Santa Barbara, presented research suggesting that workers who use a variety of skills in their occupations are more likely to get rehired faster and lose less in wages after a job loss.

"I think we want to think as a society about what makes people more adaptable," Kuhn said. "The pace of change is quickening."

In a study of 6,500 dislocated workers in Washington state, three researchers found that a year of training through community colleges boosted long-term earnings by about 7 percent for older men and 10 percent for older women. The returns on the training were even higher for workers who were younger, had more education and pursued technical fields.

"For the group of people who decided to go into training, I think they did pretty well for themselves," said Daniel Sullivan, one of the researchers, vice president and economic adviser for the Chicago Fed.

Although policy discussions were scheduled for the second day of the conference, the opening presentations prompted some talk about how to address the plight of older workers.

Tom DeLeire, an economist at Michigan State University, said considering the differences in workers' skills, preferences, opportunities and costs, perhaps training vouchers could help ease the transition from job loss to re-employment.

"Should we give old dogs a voucher with which they can learn new tricks, if they choose?" DeLeire asked.

He referred to the Bush administration proposal to provide Personal Re-Employment Accounts of up to $3,000 for individuals who lose their jobs. The money could be used for training, childcare, relocation or other expenses that would help workers get employed again. DeLeire noted that the accounts are available in nine states as part of a $9 million pilot project. Originally, they were proposed as a $3.6 billion nationwide program.