Job Training Partnership Act of 1982 - Analysis and Criticisms of JTPA

Analysis and Criticisms of JTPA

The stated goal of the JTPA is to target an economically disadvantaged population for job training assistance. The funding allocation for the JTPA is determined using a formula that is outlined in Title II. One-third of the funding is allotted based on the relative number of unemployed individuals living in areas of substantial unemployment, one-third is based on the relative excess number of the unemployed, and one-third is based on the relative number of economically disadvantaged individuals. A final stipulation of JTPA is that no state is allowed to receive below a minimum of one quarter of one percent of the total allotment. The money is further divided within the state based on the same criteria. (8) Inconsistencies are likely due to political variables that influenced the formula at the time these policies were developed. These variables include the legislative power of a state’s own representatives, a state’s ability to influence voters of legislators in other states and executive branch interests. The results of the study conducted by Svorny clearly demonstrate the importance of a state’s political power in influencing the votes of representatives (8).

Research has shown that there is an inconsistency between the number of economically disadvantaged in the United States and the number of individuals who actually receive resources and that the number varies across the United States. Concerns were initially raised in 1985, which caused the United States Department of Labor to commission a research study in July 1985 to explore the problems with the current formula. The study further showed that the main issues existed with regards to distributional equity, funding stability, data quality and formula simplicity. When investigating the distribution of funding, researchers found that certain regions, such as the upper Midwest, were over funded while other regions, such as the South, were underfunded (7).

Studies have tried to estimate the impact of the JTPA over the years. The National JPTA study was designed to measure the impact of incremental services provided by the JTPA over time. The study commissioned by the National Department of Labor investigated 21,000 people within 16 centers around the country in 1986. This research found modest positive impacts on adult women as well as adult women, but did cite inconsistencies with regards to out-of-school youths. Welfare mothers appeared to receive the largest impact as a result of the program. In addition, JTPA increased the proportion of dropouts who eventually received a high school credential but only a fraction of the target group members were high school dropouts (1). The National JTPA Study has been criticized for its research design and techniques, however. The biggest issue is that the process through which the sites were selected was not a random one. The sites do resemble the national system in some ways, such as labor market conditions and JTPA project performance and the samples of individuals in the study were similar in age, work experience and ethnicity as those served nationally by the JTPA. The main flaw in the research is that the there is no large, central city and that sites serving small numbers of people were not included and the sites that were included did not provide as much on-the-job training than most of the national sites (4).

One criticism of the JTPA is summarized in a 1991 meeting of the Employment and Housing Subcommittee of the Committee on Government Operations focused on race and sex discrimination. Congressman Lantos cited evidence of differential patterns of service and job placement by race. The 1988 Chicago Urban League report stated that African Americans were shown to consistently receive lower job placements and wages. In addition, as stated in the 1991 Employment and Housing Subcommittee meeting, a 1988 Women’s Action Alliance report states that the JTPA is ineffective with regards to moving women out of poverty and that occupational segregation is prevalent as evidenced by the fact that the majority of women received jobs in clerical and sales and service rather than other areas (6).

Further criticisms of the JTPA stem from the argument that individuals can take advantage of the system due to the way that it is set up. Cragg claims that measures in the Job Training Partnership Act lead to problems of “moral hazard” which stem from the use of performance incentives in government programs. The Job Training Partnership Act offers a “pay-for-performance system” that focuses on a participant’s earnings and a reduction on welfare dependency. Cragg claims that participants may enroll who are capable of high post-training earnings without any actual training. Therefore, some participants are reaping the benefits of the incentives program without an actual need for the government resources (3).

In 1993, the Labor Department released a study that showed that in a study of low-income male out-of-school youth, males in the JTPA program actually had 10 percent lower earnings than males from a similar demographic who never participated in the program. Prior to the study’s release, the Labor Department’s inspector general stated that young trainees were twice as likely to rely on food stamps after JTPA involvement due to the fact that the training showed the individuals how to apply for food stamps (2).