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Economic Opportunity in a Volatile Economy
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Recommendations
The results of our research to date, summarized above, suggest the need
for increased research and policy attention on intermediaries. While LMIs
are currently having limited, or in some cases negative, impacts on career
opportunities for disadvantaged workers, our findings suggest that they
are widespread in many different types of labor markets and potentially
could have a significant positive impact on labor market outcomes. Recommendations
include policies to promote better outcomes for people seeking to improve
their jobs, improvements in the quality of jobs available, and further
research.
While our qualitative research found some cases of individuals who have
benefited from their interaction with LMIs, overall our research found
little evidence to suggest that simply job matching or even training will
significantly improve career outcomes for the majority of workers. Given
the overall lack of impact on wages, it is clear that most LMIs simply
"meet the market" - taking the available quality of jobs as
a given. If intermediaries continue to take the demand side of the labor market
for granted, they will continue to have a minimal impact on job quality
and career outcomes. Strengthening the ability of LMIs to interact closely
with employers and improve the quality of jobs and career advancement
opportunities should be a top priority. Where possible, this should be
done through "win-win" scenarios, where investments in worker
training can be translated into improved productivity. Improving job quality
and career opportunities for workers may also involve putting financial,
regulatory, and other forms of pressure on employers to use better intermediaries. Specific mechanisms to affect the demand side of the labor market include: Restrict negative intermediary activity: It is possible to restrict the
activities of intermediaries that are clearly having a negative impact
on job quality. Our study adds to the growing body of evidence that temporary
agencies can have a negative impact on the labor market, and their activities
should be more tightly regulated. This could include such measures as
limiting the length of placements, requiring adequate disclosure of mark-up
rates, requiring equal pay for equal work for both temporary and permanent
workers performing the same work, and instituting other standard-setting
mechanisms to provide a strong floor under temporary workers. Promote membership-based intermediaries: Intermediaries that represent
workers through some democratic process (this can include unions, professional
associations, and some community-based organizations) should seek ways
to become market-makers to induce improvements in job quality. This could
be achieved, for instance, by encouraging LMIs to have a membership structure
in order to receive public funding for training and placement programs. Promote cluster-specific LMI-employer partnerships: Win-win arrangements
in which improved training is translated into improved labor productivity
is most likely in cases where multiple employers and intermediaries develop
partnerships around collective training needs and industry-specific skill sets.
Again, this could be encouraged by making public funding for training contingent
upon demonstrated partnerships (including joint funding) between multiple employers
and LMIs.
One of the greatest weaknesses of the current LMI "system" is
the widespread focus on short-term job placement, rather than on long-term
career advancement. With increasing job turnover and declining internal
job ladders within firms, the fragmented institutional structure of intermediary
activity merely perpetuates job turnover. Building effective career advancement systems will require improving
networking and coordination among intermediaries, building stronger linkages
between the bottom and middle levels of the labor market, and strengthening
occupational communities that are inclusive and effective in both formal
training and promoting mentorship and effective on-the-job learning processes.
Specific mechanisms to promote improved career advancement include: Restructure workforce development incentive structures: For example,
the current welfare-to-work emphasis on placement at the expense of training
and career mobility moves in precisely the wrong direction. Similarly,
workforce development funds that leave training as a "third tier"
service undermine training opportunities. Incentive structures for workforce
development could include targets focused on wage rates and three to five
year advancement rates. Increase funding for long-term education, not just short-term training:
Many job training programs are too short to have a significant impact
on career outcomes. Resources to improve workers' access to multiyear
community college degrees and certification courses are essential for
improving long-term outcomes. Promote networking and coordination: Intermediaries could be required
to demonstrate coordination with other intermediaries, including particularly
community colleges and unions, in order to be eligible for significant
public resources. |