Shifting Corporate Attitudes

One of the problems with the minimum wage debate (whether to raise it, by how much, what will the effects be on hiring, etc.) is that it pushes this much more fundamental issue into the background. I don’t personally understand why it’s not a given that it’s immoral to pay your employees so little that they can’t afford to eat, and why this is not a major topic of public discussion.

But I also think we have to deal with the fact that that’s apparently where we are.

Cappelli’s argument is focused on wages, but it seems to me that the shift he describes is reflected in corporate attitudes towards employee education and training as well. Corporations increasingly don’t see this as their problem. Likewise, Cappelli contends that corporations’ former sense of obligation to pay employees a decent wage had both strategic and altruistic motivations, and I think that was probably true about training as well. But whatever altruistic motivation there was behind some corporate training investments in the old days has all but disappeared. Corporate leadership today more typically looks at training exclusively in terms of return on investment back to the corporation.

You can be morally outraged by all this—or not—but either way, it does have an impact on policy. What is the role of government in an environment where corporations see less of a moral obligation to their employees—not just in terms of wages, but in terms of supporting the education and training needs of our workforce?

Decades-Long Decline in Federal Spending on Job Training and Workforce Development

In a recent article for the Center for American Progress, Joy Moses lists 10 reasons why cutting poverty programs to address the government’s fiscal issues is a bad idea. Reason number three is that spending on many individual programs is “stagnating or declining.” She cites workforce and job training programs as a prime example:

Chart  from "Top 10 Reasons Why Cutting Poverty Programs to Resolve the Fiscal Showdown Is a Bad Idea"

Source: Joy Moses, “Top 10 Reasons Why Cutting Poverty Programs to Resolve the Fiscal Showdown Is a Bad Idea”

I went and looked at the OMB spreadsheet she cites as a source and it looks like those numbers make sense, although I wonder if there is a bit of an apple/oranges problem when comparing federal job programs from 1972 with 2012. I’m also not sure why she compares the 2007 investment with 1972’s expenditure, when it looks like job training spending spiked even higher in the late 70s-1980. (I assume there is a good reason, I just don’t know what it is.) But none of that takes away from her overall point, which should be helpful to workforce/job training advocates.

One slightly more substantive quibble: I’m not sure that I’d describe federal job training as strictly a “poverty program,” since these services are not exclusively aimed at people living in poverty. In fact, as others have pointed out, low-income people currently represent only about half of those receiving job training or related services with federal adult employment and training funding, despite their increased rates of unemployment. It would be useful (and possibly make her argument even stronger) to look at whether the number of low-income individuals receiving federally funded job training and related services has declined in the same proportion as the overall decline in funding.