Academic journal article Chicago Fed Letter

Automotive Industry Outlook: Understanding Work Force Programs

Academic journal article Chicago Fed Letter

Automotive Industry Outlook: Understanding Work Force Programs

Article excerpt

The Chicago Fed, along with the Cleveland Fed, Brookings Institution Metropolitan Policy Program, and the W. E. Upjohn Institute for Employment Research, held a conference on October 8-9, 2009, to explore the ongoing adjustments of the automotive work force and its communities. This article summarizes panels evaluating workforce programs.

In this Chicago Fed Letter, we summarize some discussions from Automotive Communities and Work Force Adjustment - a conference hosted by the Chicago Fed's Detroit Branch late last year. In a previous Chicago Fed Letter, we covered this conference's opening panel, which explained the challenging conditions facing the broader economy, the automotive industry, and the industry's work force and communities.1 Here we focus on panel presentations that explored federal and state work force programs designed to aid former auto workers and their communities. We also summarize presentations on work force training and development.

Aid and counseling after layoffs

Marian Krzyzowski and Lawrence Molnar, University of Michigan, Institute for Research on Labor, Employment, and the Economy (IRLEE), described the Community Economic Adjustment Program (CEAP) , which was created three years ago by the U.S. Department of Commerce's Economic Development Administration. CEAP conducted research in 23 communities experiencing economic hardship because of major automotive plant closings in Michigan, Ohio, Indiana, and Wisconsin. The program found 50% of the communities expressed a critical need for housing assistance, 53% for health care, and 68% for general social services. Krzyzowski noted that for every one job lost, four people, on average, are affected. As a result, the local areas' social service providers come under tremendous stress. Krzyzowski recommended emergency federal funding for local area social service agencies impacted by plant closings; he also argued for more aid to programs specifically helping children of dislocated workers.

Mark Gaffney, Michigan State AFL-CIO (American Federation of Labor-Congress of Industrial Organizations) , described his union's Peer to Peer Program (run by Human Resources Development Inc.), which uses designated peers (who have been displaced themselves) to advise displaced workers. This program provides information on all the services available to the unemployed in Michigan, including job search assistance, computer literacy education, and funding for training. The program attempts to counsel workers even before they are let go, and continues to advise them while they seek new jobs or are in training.

Rick McHugh, National Employment Law Project, argued that the federal government should be more proactive (rather than reactive) in improving work force development and assisting auto workers facing layoffs. He went over five best practices that should be promoted or expanded. He first mentioned states' rapid response programs that advise displaced workers on the availability of social services. Next, McHugh discussed labor management committees that regularly assess workers' training needs and help fill educational gaps. In addition, like Gaffney, McHugh promoted peer networks that use dislocated workers to provide assistance and advice to other displaced workers. He then talked about income support for training through the federal government's Trade Adjustment Assistance (TAA) program or unemployment insurance. Finally, he discussed labor program operators (LPOs) - labor-run nonprofits that provide services for dislocated workers.

Community colleges as retraining centers

Daniel Sullivan, Federal Reserve Bank of Chicago, studied the effects of community college as a method of retraining displaced workers. Based on his previous research with co-authors,2 Sullivan explained that community college training provides "pretty good" returns, though they vary by type of course taken and the worker's prior skills, age, and gender. …

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