$50 million for innovation

by: Rachel Berger

Fri Jul 23, 2010 at 12:26:18 PM EDT

The Social Innovation Fund, a White House initiative launched last year to invest $50 million dollars in innovative solutions to social challenges, announced its first round of grants this week. Not surprisingly, given the state of unemployment in the US, the biggest grant recipients were organizations that tackled joblessness through job training and workforce development. Good news for New Yorkers: the Mayors Fund to Advance New York City got $5.7 million dollars.

Unfortunately for the SIF (and for the country), a fascinating and lengthy article in the NYTimes on Monday explored the impact that training programs have on joblessness and the results were pretty grim. Federally funded “workforce development” programs are mostly short term classes that teach the basics of spreadsheets, word processors, and resume development. The federal government invests over $4 billion dollars from different sources, including the stimulus package in workforce development. But, even before the Great Recession, a study conducted by the Labor Department concluded that this type of training had “small or nonexistent” impact. Kal v’homer (as they say in yeshiva) in our current economy.

Before we all get too depressed, though, there has to be some good news. A study conducted by Public/Private Ventures evaluated programs that train people for with specialized skills for specific sectors or industries. They found that this “sectoral employment” training, which also connects job-seekers to jobs in the sector they are trained in actually helps people find work, work more consistently and earn more money in the first year after training. This just makes so much sense!

Bottom line is that workforce development is no magic bullet. On the other hand, getting people trained in industries that will grow in the future still seems like a very smart thing to do. But it cannot be all about the individual. We collectively need to also make sure we set up mechanisms on the other end so that jobs exist for trained workers.