It’s a highly cherished fiction1 by policymakers that they are the ones who create the jobs, not the millions of individual entrepreneurs and small-business owners making unobserved individual hires looking out for their own best interests. Politicians love the ribbon-cutting ceremonies, the press releases, the corporate-welfare incentives, the “jobs” bills, “stimulus” bills, unclassifiable nonsense, and government job training programs.
A newly released inventory of job-training programs in North Carolina has shown that the state and federal government spend a combined $1.4 billion in job training efforts here — an increase of 15 percent over the past six years. Gov. Bev Perdue announced last week using $13.4 million in federal stimulus funds “to start accelerated six-month training programs for 12 occupations.” Both old and new government training programs suffer from the same delusion, that they are necessary steps to solving the state’s double-digit unemployment rate, missing the obvious fact that the state’s unemployment rate is so high despite increased spending in job training programs.
As I pointed out in 2008, the returns on government job training efforts were so abysmal that some researchers were interested in finding out why those programs failed, not how well they fared. Private and charitable job training efforts, on the other hand, offer strong, positive results.
I offered a summary of North Carolina’s job training programs’ struggles and a quick explanation of private and charitable efforts’ effectiveness in Agenda 2010.
1. It’s also dangerous fiction, because these bills and programs require transferring resources and freedom from the real job creators, with the net effect being less freedom, fewer jobs, and more reinforcement of the lie that politicians create jobs. Is there a role for politics in job creation? Yes, there is, and that is to make the environment more favorable for individual job creators. After all, the highway doesn’t create the cars; its job is to make the environment more suitable for cars to get to their destination.