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October 16, 2012

Reemploying America: The Public Workforce System and the Great Recession

October 16, 2012

The first post in a four-part series about the response of America's public workforce system to the Great Recession.

The Great Recession and the high unemployment that followed have been the public workforce system’s greatest challenge. The U.S. economy has experienced its longest sustained period of high unemployment since the Great Depression. Unemployment increased sharply during the recession and remained above 8 percent for over three years after the recession officially ended. At the same time, unemployment durations reached unprecedented levels during and after the recession, revealing how difficult it has been for unemployed workers to find new jobs.

How did the workforce system respond to this challenge? How has it performed over the past five years? How adequate has system funding been to serve the unemployed? In this and the following three blog posts, I’ll explore these questions and examine how the workforce system responded to increased resources and high unemployment. This discussion pulls from my new review “The Response of the U.S. Public Workforce System to High Unemployment during the Great Recession,” which is an update of portions of my 2010 book, Solving the Reemployment Puzzle: From Research to Policy.

The public workforce system went through a long period of decline before the onset of the recession. Major workforce programs—the Workforce Investment Act (WIA) Dislocated Worker, WIA Adult, and Wagner-Peyser Act Employment Service programs—had reached their peak funding levels in 2000, 1985, and 1995, respectively. In 2012, appropriations for these three programs totaled $2.5 billion, resulting in expenditures of about $125 per program participant, assuming local workforce centers serve about 20 million workers as they have in recent years. Thus, low and declining appropriations mean that unemployed workers are receiving less reemployment and training services, and the services delivered are more automated. Workers looking for jobs are increasingly being sent to search for work on their own using personal computers in resource centers instead of receiving staff-assisted services.

With declining appropriations, local workforce offices had been reducing staffing for many years. They were not ready for the onslaught of unemployed workers who needed jobs. Unemployment rates more than doubled from 4.6 percent in 2007 to 9.8 percent in 2010. At the same time, the number of unemployed workers first collecting unemployment insurance benefits nearly doubled from 7.5 million to 11.3 million, and these workers stayed unemployed for much longer that they did in 2007. Between 2006 and 2009, local workforce offices had to serve half again as many workers, with participants increasing from 14.7 million to 22.4 million.

Subsequent blog posts will examine how the public workforce system has served the greatly increased number of unemployed workers.

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