The Breakdown | Explaining Southern California's economy

Long-term unemployment: Is education the solution?

As the economy begins turning around, some CA local governments still struggle with high unemployment
As the economy begins turning around, some CA local governments still struggle with high unemployment
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An inquiry about job loss and the struggling economy sent out to our Public Insight Network prompted an interesting response from Scott Hutton, who has engineering training and management experience, but who has been out of work for a long stretch of time and is beginning to question his skills:

I have been debating whether to spend what money I have left on professional training courses and certificates to perhaps make up for the lack of advance degrees.  Or, pursue coursework in computer engineering to try to land a job in the IT field.  IT seems to still have some future here even in Los Angeles.  But, this would be an investment using the last bit of money I have.

The conventional wisdom says that Scott probably should invest in himself and acquire the skills he needs to remain competitive. He doesn't have the benefit of an employer to turn to for additional job training. So he needs to finance it himself, and history indicates that these kinds of investments, while somewhat risky, can pay off.

But Scott is facing an all-too common dilemma right now. Having exhausted his unemployment benefits, he's being forced to choose between preserving his savings until the jobs picture improves and spending what's left of his reserves to solve what he thinks is his employment problem: his lack of advanced degrees.

Should he have to choose? One could easily argue that Scott is actively seeking work, is probably qualified and experienced, but is just being outcompeted in a tough market in which employers can be very selective.

In other words, the market is distorted by abnormally high unemployment levels (9 percent nationally and nearly 12 percent in California). What he needs is an extension of benefits to ride it out, and probably some government assistance, in the form of the retraining he already wants to seek. 

There are some difficult policy choices here. But at the very least, politicians should recognize that they can keep more money in the economy — and see it spent spent on immediate essentials like food, shelter, gas, and so on — if they fund training programs to help citizen preserve the spending power they have left, rather that asking them to devote their dwindling personal funds toward long-term goals.

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