The blog of the Urban Institute
June 9, 2020

Lessons from the Great Recession to Help Congress Get Americans Back to Work

Tens of millions of people are out of work as the COVID-19 pandemic continues to affect the nation’s economy. As each state slowly reopens, some of the unemployed will return to their jobs, but others are, or will be, looking for work. And many will need assistance finding a new job or getting training to update their skills. Some economists warn it may take a year or longer for the economy to recover.

Here are three lessons from research and the workforce’s recovery from the 2007-2009 Great Recession that can inform Congress as it considers how to help people get back to work.

1. One-stop career centers can mobilize quickly

The Wagner-Peyser Act of 1933 created the United States Employment Service, which, to this day, brings together businesses seeking skilled workers and jobseekers searching for a new job. It serves as the backbone for our public workforce system, providing the infrastructure and services in tandem with other workforce programs, such as those funded by the Workforce Innovation and Opportunity Act and for veterans and people with disabilities. The service’s ability to mobilize and expand quickly enabled it to meet local needs during the Great Depression.

Over the past eight decades, the country’s employment service system has continued adapting quickly and nimbly to meet labor market demands. Today, more than 2,000 local American Job Centers provide federally funded employment services and counseling and other assistance—such as job search, referrals and placement, and skills training—to anyone seeking a job, especially the unemployed and underemployed, dislocated workers, and veterans.

During the Great Recession, through the American Recovery and Reinvestment Act, Congress allocated $400 million for states to ramp up their local employment services. With the new funds, additional staff were hired to expand local services—helping people apply for unemployment insurance, referring people to open jobs, hosting labor market information workshops, assessing and testing workers’ occupational interests and skills, and helping people navigate training options, mainly through community colleges, to update their skills or gain new skills.

The additional recovery funds were also used to adopt new technologies that made employment services more accessible to the large numbers of customers seeking assistance. In the last recession, many states dispatched mobile job centers to previously unserved rural communities, established satellite services in libraries and community centers, and some set up temporary offices to provide special services for veterans.

2. Employment counseling, complemented by online services, can help jobseekers

Though technology has changed how people can access job and training services, not everyone benefits. Low-income people may be less likely to have reliable or easy access to computers or the internet. American Job Centers help fill this gap by making computers available for the public to access up-to-date labor market information and to conduct their own online job searches. In years past, people could apply for unemployment insurance in their community’s local office, but today, nearly all applications must be done by phone or online.

But online services are, at best, a complement to, not a substitute for, one-on-one, staff-assisted, employment services delivered in person (or via video conferences during the COVID-19 pandemic). Research has shown that staff-assisted services help jobseekers find work, and job search, career, and training choice services guided by an employment specialist are effective for veterans, unemployed workers, and young people.

3. An infusion of federal resources helped the public workforce system ramp up its capacity during the Great Recession

The portion of the public workforce system devoted to employment services (for example, Wagner-Peyser and American Job Centers) is quite limited. The annual appropriation of about $650 million (PDF) is used to serve about 4 million people a year—a small fraction of the more than 40 million people now experiencing unemployment and an even smaller share of the 150 million or so workers in the nation.

A supplemental Wagner-Peyser appropriation, similar to what Congress made available during the Great Recession but on a significantly larger scale, could help in the following ways:

  • local offices could quickly mobilize their services and reach more people who otherwise would not be able to access either physical office or on-line services;
  • employment specialists could be hired to guide and support jobseekers;
  • states could develop more virtual services and staff-assisted service delivery options to serve the pandemic period and beyond; and
  • states could play a critical role in improving workforce development capacity, through statewide planning and coordination, and could modernize technologies that help ensure job seekers and employers can access multiple services through a seamless process at the local level.

Without additional resources through the Wagner-Peyser funding stream, states will be hard pressed to serve more people looking for work. We could see long waiting lines of workers trying to get help finding a job or training or applying for unemployment insurance, adding to the hardships of many who have lost their jobs.

Woman types on her computer as she works from home. (Photo by 10'000 Hours/Getty Images)

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As an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research.