August 12, 2012

USAT: Companies Reducing Training Costs Are ‘Pushing Up Unemployment Rates’

In an apparent attempt to pin blame anywhere but on the Obama administration for the rising unemployment rate, a USA Today item currently carried at Newsmax’s web site opens by claiming that “Companies across the country are cutting training programs for new employees, broadening the divide between workers with skills needed to compete in today’s economy and those left out, pushing up unemployment rates in the process.”

The incoherence is stunning, and it continues after the jump:

A recent survey by the Society for Human Resource Management found that 38 percent of companies said they cross-train employees to develop skills not directly related to their job, down from 43 percent in 2011 and 55 percent in 2008, USA Today reports.

Blame, in part, a 16 percent drop from five years ago in federal funding to help train unemployed workers for the unwillingness to help keep workers’ skills up to date.

Employers “want people to hit the ground running,” said Wharton School management professor Peter Cappelli, author of “Why Good People Can’t Get Jobs,” according to USA Today. “They don’t want to train anybody.”

Company training was common in the 1970s but first saw widespread cuts in the recession of the early 1980s.

Seriously, I have no idea where writer Forrest Jones is going with his opening sentence:

  • It may be as simple this — Companies are trimming back on new hire orientation and other initial hiring matters because, well, they’re hiring fewer people than they have in the past.
  • Or, if Jones is trying (quite ineffectively) to tell us that companies are trimming back on new hire orientation and other initial hiring matters, there shouldn’t be an immediate problem because, well, they’re hiring people — or would Mr. Jones prefer that they spend the same amount of money and hire fewer people? How in the world does this have anything to do with “pushing up unemployment rates”?

Jones’s attempt at achieving even a modicum of sense didn’t get any better in subsequent paragraphs:

  • Paragraph 2 — Companies typically don’t worry about cross-training until a new hire has been around for a while and has demonstrated a certain level of competence in their primary task. What in the world does cross training of people who are working have to do with the percentage of those who aren’t?
  • Paragraph 3 — Jones appears to be saying that less federal spending on job training for the unemployed has caused companies to spend less keeping workers’ skills up to date. How are they at all related?
  • Paragraph 4 — As to the canard that “companies don’t want to train anybody” — well, to an extent, there have always been companies that try to throw people into tasks and just hope they survive and don’t hurt their customer and stakeholder relationships. It’s usually not a good idea, and quite a few firms which have tried it can be described in one word: gone. But backing up a bit, companies once expected their candidates to be literate. Unfortunately, despite obscene amounts of public money spent on K-12 and higher education, that expectation is sadly unrealistic, because an awful lot of people looking for jobs, even college graduates, aren’t literate. In a high-unemployment economy, companies are going to select new employees who can read, write, and communicate effectively. They will have to spend less on getting these new hires up to speed than they would a group of newbies from the overall employment pool. There’s nothing nefarious about this, despite what Wharton’s Cappelli wants us to infer.
  • Paragraph 5 — Jones’s one-sentence “History of Corporate Training Before and After Ronald Reagan” is such a howler it isn’t even worth addressing.

This USA Today piece is so bad that it shouldn’t be taken seriously, except perhaps as a pathetic trial balloon for the idea that employers and not the awful public policy choices made during the past four years are to blame for historically high unemployment.

Cross-posted at


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