As part of his promise to restore American manufacturing and the fortunes of the working class, President Donald Trump pledged to expand trade apprenticeships. In an April executive order, Trump directed the Department of Labor to deliver within 120 days a plan “to reach and surpass 1 million new active apprentices.”  

That deadline has passed, with no evidence of progress or even a plan to reach the one-million apprenticeship milestone.   

Instead, drastic layoffs, funding cuts, and a purge of “DEI”-related initiatives have sabotaged the emerging apprenticeship movement. Growth in apprenticeships is at its slowest in years, far more sluggish than during Joe Biden’s administration or even the president’s first term. At its current pace, former DOL senior staffer Nick Beadle told me, “I don’t see them getting to 1 million apprentices till 2032.”  

During Biden’s tenure, the government invested nearly $730 million to expand registered apprenticeships. But it was from 2016 to 2020, the last year of Obama’s administration and of Trump’s first term, that apprenticeships posted double-digit percentage increases each year, according to government data. By the end of Biden’s term, in fiscal 2024, there were more than 670,000 active apprentices—or nearly double the roughly 359,000 apprentices in fiscal 2015.  

But this year, the number of new apprentices has grown by only about 3 percent so far, according to Zach Boren, Senior Vice President of Apprenticeships for America and the former chief of registered apprenticeship and policy for the Department of Labor. “We’ve got a White House that has really good talking points on apprenticeship, but no road map,” Boren said.  

One major problem: the gutting of the DOL’s Office of Apprenticeships, first by Elon Musk’s DOGE initiative, and then by the exodus of key staff. There’s literally no one available to write a plan, let alone implement it.  

The office lost its national director and several division chiefs, and staffing levels are down by as much as 30 percent, Boren estimates. The website for the national office lists just three people, all of them designated as “acting.” “The Department of Labor, and especially the Office of Apprenticeship, are running on fumes,” said Boren. 

The Trump administration has also paused or canceled grants for apprenticeship programs and apprenticeship research, which means fewer resources for recruiting and preparing apprenticeship candidates, helping employers and community colleges launch apprenticeship programs, or evaluating their effectiveness.  

Beadle, an investigative journalist before his stint at the agency, told me that at least $30 million in funding appropriated by Congress last year was never spent and has expired. “I have not seen records that confirm they spent all of the $285 billion [allocated] last year on registered apprenticeship,” said Beadle, who writes about workforce development for the Substack “Jobs That Work.”  

In addition, millions of dollars in previously awarded contracts to nonprofits, researchers, and industry intermediaries have been canceled. Among the recipients whose grant was nixed is Reach University, a nonprofit institution that’s pioneering debt-free “apprenticeship degrees.” According to journalist Paul Fain, writing for Work Shift, DOL rescinded $14.7 million in grants to Reach University’s teachers college, including a nearly $10 million grant to one of the institution’s community partners in Louisiana, and another grant to a partner in Arkansas. Through a spokeswoman, Reach University President Joe E. Ross confirmed that as of this writing, the grants had not been reinstated. (Ross also said that “although the grant terminations caused a temporary financial impact, we were able to ensure there was no disruption to any current learner’s degree experience.”) 

Other organizations that didn’t receive anticipated funding include the Interstate Renewal Energy Council, which helps facilitate clean energy industry apprenticeships, and the Healthcare Career Advancement Program (H-CAP), which develops apprenticeships in health care, said Apprenticeships for America’s Boren. The administration has also ended research grants related to apprenticeships, according to Work Shift’s Fain, including a project to provide technical assistance to states expanding apprenticeships and evaluations of youth apprenticeship programs. The Office of Apprenticeship’s grants pages currently indicate “no funding opportunities” and “no active awards.” 

Given the vital role intermediaries play in creating apprenticeship opportunities, the lack of funding for these groups has effectively severed the pipeline. Boren reports “massive layoffs across the apprenticeship field,” with some organizations even shutting their doors. Boren also regrets the lost momentum among businesses. “We’ve had industry groups that have really gotten excited about apprenticeships, and there’ve been some big investments over the last 10 years,” he said. “Now my question is, how many folks like that are no longer interested?” 

Trump’s campaign against “DEI,” however, may prove the most destructive to his stated goal of expanding apprenticeship. While women and minorities are among those most likely to benefit from apprenticeships and to be interested in pursuing them, the Trump administration is committed to shutting them out. As a result, “one million apprentices” will be unattainable if half the workforce is discouraged from participation.  

Trump’s executive order “Ending Radical and Wasteful DEI Programs,” signed on his first day in office, has led to the wholesale purge of websites, data, and programs perceived to promote diversity. The Office of Apprenticeship saw the removal of guidance on affirmative action (“access denied,” the site now reads), regulations on equal opportunity hiring (“page under construction,” as shown by an error message), and even the 2024 report on National Apprenticeship Week, which reportedly included descriptions of recruitment efforts for women and minorities (“page not found”).  

The administration also canceled dozens of grants under the Women in Apprenticeship and Nontraditional Occupations (WANTO) program established in 1992 by President George H.W. Bush, according to a letter sent to DOL by Democratic Reps. Bobby Scott and Rosa DeLauro in May. DOL has since reposted the grants, but the organizations whose awards were terminated are ineligible for this money, reports Mother Jones, and the program no longer prioritizes historically underrepresented groups such as women of color or women with disabilities.  

These actions could undo the progress made over the last decade toward making apprenticeships more accessible. While women have historically made up a fraction of apprentices, their ranks had been growing. Between 2014 and 2023, the share of women apprentices rose five percentage points, from 9.2 percent to 14.4 percent, according to a 2024 report by the Institute for Women’s Policy Research, and the number of female apprentices tripled. Today, women in apprenticeships currently number fewer than 100,000, according to DOL’s latest data, and the number of Black Americans in apprenticeships is lower still—at under 90,000.   

Much as he did on his show, Trump seems to favor a particular kind of apprentice. A recent social media campaign by the Department of Labor featured what’s presumably Trump’s ideal: a blond, broad-shouldered, AI-generated Aryan avatar ripped straight from the manosphere, with a chiseled jaw and a cleft chin. Historians told the Washington Post that the style of these posts evoked “historical government propaganda, including posters from New Deal-era America and fascist Europe.”  

Ultimately, “propaganda” might be all that Trump’s apprenticeship initiatives turn out to be. Like so many of his promises to his working-class base, “one million apprenticeships” will likely prove hollow.  

The post Trump’s Broken Promise of “One Million Apprentices”  appeared first on Washington Monthly.

In Washington, D.C., and 43 states, restaurants and other businesses with tipped workers are not required by law to pay the full minimum wage outright, a concession to the restaurant lobby that goes back decades. Instead, employers can credit a portion of a worker’s tips toward their obligation to pay minimum wage. But D.C. may soon join the small group of states—California, Minnesota, and Oregon among them—to eliminate this anachronistic system. This November, D.C. will vote on Initiative 82, which would gradually increase base pay for tipped workers over five years from $5.35 until it reaches the District’s regular minimum wage, currently $16.10.

D.C.’s dining scene, replete with celebrity restaurateurs and two dozen Michelin-starred restaurants, is one of the country’s most celebrated. But proponents of I-82 say the industry’s growth was built on an artificial labor subsidy that exploits workers. “Tips were intended to be an extra or bonus on top of a wage, not your primary source of income,” Saru Jayaraman, the president of One Fair Wage, the national organization leading this effort, says. “Fundamentally, what is wrong with the system is the employers are not paying for the cost of the labor.” Experts say the maddening unpredictability of wages from week to week makes long-term financial planning difficult for restaurant workers. “A system that’s built on customers’ whims for supplying the bulk of a person’s income just leaves a lot up to chance,” David Cooper, an economist at the Economic Policy Institute, says. Leaving pay to the vagaries of customers means that Black and female restaurant workers in Washington get smaller tips than their white and male counterparts.

Federal law requires employers to make up the difference between the tipped wage and the standard minimum wage if tips fall short, but a 2012 Department of Labor compliance sweep of nearly 9,000 restaurants found 1,170 tip credit infractions. A full 84 percent of restaurants had some type of labor violation. Workers attest to this. “Something you sign up for when you sign up for this industry is you know that not all of the labor laws are going to be honored,” Gillian Michalowski, a bartender at the downtown hotel bar Allegory, says. Simplifying the system by guaranteeing all workers the minimum wage up front would directly combat wage theft.

A poll commissioned by One Fair Wage, which is also running similar campaigns in Maine, New York, and several other states, found that 88 percent of D.C.’s tipped workers support I-82. Voter support, too, is high. 

But the interests arrayed against the initiative are formidable. The “No to I-82” committee, backed by the National Restaurant Association (NRA), a lobby group, spent months unsuccessfully suing to keep I-82 off the ballot, and a spokesperson with the campaign confirmed that they’ve exhausted all judicial means of stopping the initiative. But the fight is far from over: The committee has nearly 10 times as much cash on hand as the sponsors of I-82. High-profile restaurateurs like José Andrés are determined to see the initiative killed. “Now the focus really turns to a broader education campaign,” the campaign spokesperson said—a public relations blitz. 

Their case to voters will rest on the charge that a higher minimum wage would actually drive down workers’ earnings and hurt smaller restaurants. “You couldn’t really ask a business that has pretty low margins to all of a sudden scrape together an extra $500,000,” says Geoff Tracy, chair of the No to I-82 committee and the owner of the eponymously named Chef Geoff’s. “Service charges would have to offset those costs.” Few customers, he told me, would tip on top of a service charge, and workers would bear the consequences.

To veterans of this fight, that’s a familiar argument—and a notoriously effective one.

In 2018, a group of activists collected enough signatures to get Initiative 77, the first incarnation of I-82, on the ballot. For months ahead of the election, the NRA and other industry groups poured thousands into Save Our Tips, a so-called astroturf organization masquerading as a grassroots, worker-led campaign. Tracy’s service charge argument was its core premise. “You’d see signs up in every restaurant that said, you know, ‘Save our Tips,’ ‘Vote No on Initiative 77,’ stuff like that,” says Max Hawla, a D.C. bartender then working at Bar Charley, an upscale Dupont Circle mainstay. “No on I-77” earned endorsements from Washington politicians and celebrity chefs.

The Restaurant Workers of America (RWA), a small, mostly white group of bartenders opposed to I-77, made up another arm of this campaign. Their representatives authored an op-ed in The Washington Post and received favorable write-ups in BuzzFeed News and other publications. News outlets seldom mentioned their shady relationship with the restaurant lobby, or that the group was a poor representation of the D.C. restaurant workforce, which is majority Black and Hispanic and includes many servers and bussers who make little in tips. (At the time, tipped workers in D.C. averaged just $14.41 an hour including tips, and were three times as likely to be below the poverty line as the workforce as a whole.)

The  opposition campaign went to great lengths to reach workers. The preferred digital gathering spot for D.C. restaurant workers is District Industry, a private Facebook group that requires Washington-area residency for members. “Maybe a month and a half before the midterm election that year, a lot of content on that Facebook page started to really blow up against Initiative 77,” Hawla told me. Screenshots shared with the Washington Monthly show that this was driven in part by posts from out-of-state members of the RWA. For example, the RWA’s founder, Joshua Chaisson, who helped reinstate Maine’s tip credit in 2017 before arriving in D.C., posted regularly in the group that spring and summer.

The Vote No campaign unified owners, managers, and well-paid bartenders against I-77. It instilled a stigma against the initiative among workers. “They really fell for the closed-door arguments that management was feeding,” Ryan O’Leary, the lead organizer of I-82, told me. That included Hawla, a 29-year-old graduate of American University. “I was very staunchly against Initiative 77,” Hawla said. “I was convinced that if the tip credit went away, I would lose tips.” He assumed that what was best for restaurant owners was best for him. “I need restaurants to have a job,” he remembered thinking. “And the National Restaurant Association was ensuring that I’ll have one by defending restaurants.”

Despite the astroturf campaign, in June 2018 I-77 passed the ballot referendum, with overwhelming support from the city’s majority-Black wards. (Only wealthy, mostly white Ward 3 voted against it.) But D.C.’s NRA affiliate launched a furious counteroffensive to get the city council to repeal the measure. It worked: Three months later, the council chair, Phil Mendelson, whipped the votes to defy the will of the voters and overturn the measure. ​​His justification echoed the industry line. “What is most troubling is that a supposedly progressive initiative to benefit workers instead will hurt workers,” he said at a hearing.

D.C.’s failed campaign fit a familiar pattern. In November 2016, Maine voters passed a ballot measure to eliminate the tip credit. But the following June, the state legislature capitulated to lobbying pressure and repealed the measure, reinstating the tipped wage. In Michigan, before residents could vote on a 2018 ballot measure to eliminate its tipped wage, the state legislature took action, preempting a potential yes vote by increasing the state minimum wage to $12 before amending the law to keep the tipped wage at 38 percent of the standard one.

Hawla was glad to see I-77 overturned. But 18 months later, the pandemic upended his industry. Two-thirds of workers reported not receiving the full wages they were owed (including vacation and sick day payouts) before they were laid off. When restaurants began reopening, long-standing problems in the industry were magnified. “People were really not tipping well,” Hawla said. “More of the people who came out during reopen were shittier customers, because they were the customers who didn’t care about COVID.” Polls backed up what Hawla saw that year—nationally, 78 percent of all tipped workers and 88 percent of Black tipped workers said they received less than half as much in tips during the pandemic than before. Patrons punished servers with smaller tips when they were asked to comply with COVID guidelines, and rates of sexual harassment went up, as well.

Congress made unemployment benefits available for restaurant workers. But language barriers and immigration status made accessing those benefits impossible for many kitchen workers in particular. Margarita Crespo, a 47-year-old cook and kitchen manager at a Mexican restaurant in D.C.’s Shaw neighborhood, was one such worker ineligible for unemployment benefits. Crespo instead found the Restaurant Opportunities Center (ROC), an organization affiliated with One Fair Wage, which provided her with the resources to get by.

When she returned to work, her employer had switched to a takeout-only model. “We do all the work,” she told me with the help of a translator. “The front of the house is just, like, answering the phone.” This made it all the more frustrating that kitchen workers legally cannot share in the tip pool. If the tip credit was eliminated, she learned from ROC, that rule would end, and back-of-house wages would rise—a fact even opponents of eliminating the tip credit concede. Crespo recalled thinking that the debate over I-77 had largely ignored the “Black and brown people in the back of the house,” who stood to benefit as much as bartenders and servers. “We’re essential workers,” she said. “We’re part of this economy.”

In September 2020, Hawla attended a Labor Day rally hosted by ROC. “I remember they had signs that said, ‘Stop the Other NRA,’ ” he said. “You know, referencing the National Rifle Association.” Across the country, NRA lobbying had siphoned off most of the first federal restaurant pandemic package to national chains instead of independent restaurants, which shuttered in droves. It made the lobby’s fear-mongering about the mass closures and layoffs that I-77 supposedly would have caused for smaller establishments seem duplicitous. “Maybe they don’t have my best interests in mind,” Hawla remembered thinking.

Later that month, Hawla was visiting Seattle when he struck up a conversation with a bartender at a cocktail bar. Washington State is one of the seven states without the tip credit. “I asked the bartender, ‘How do you like not having a tip credit?’ ” Hawla told me. “And he said, ‘What’s a tip credit?’ ” Hawla explained the concept. “He just went, ‘That sounds so stupid.’ ”

Hawla learned that the bartender’s higher base pay meant that his total wages after tips were much higher than Hawla’s own. The Seattle bar didn’t have any kind of service charge, and tips remained reliably high. “That moment, I was like, ‘Holy shit, I’ve been lied to,’ ” Hawla said. When organizers announced the petition that would become I-82, Hawla signed it.

In fact, a 2018 study found that Seattle bartenders and servers make 7 percent more per hour than those in D.C. Nationally, median hourly wages including tips are about 20 percent higher in states without the tip credit. Tipping in states across the country varies little—between 15 and 17 percent—and is only minutely higher, on average, in states with the tip credit, though D.C., at 14.9 percent, has the second lowest tip percentage in the country.

Likewise, it’s unlikely that I-82 would mean the sudden spread of the tip-killing service charges or the layoffs employers warn about. “There has never been any state in which a raise in tipped workers’ wages has resulted in a majority of restaurants switching to service charges,” One Fair Wage’s Saru Jayaraman told me in an email. Growth in the number of full-service restaurants in universal-wage states has typically tracked or exceeded that in states with the tip credit, which Cooper, the economist, attributes to less turnover and greater productivity among better-compensated workers. And a study on 20 years of changes in tipped wage policy throughout the country found “small, insignificant effects of the tipped wage on [full-service restaurant] employment.”

Rather than close their doors or lay off half their staff, restaurants in D.C. will likely do what they always do: adapt. “When the cost of anything goes up, outside or excluding labor, you never hear this complaining and bemoaning from business owners,” O’Leary, the I-82 organizer, told me. “They make it work. Price of meat goes up, you have more vegetarian options.”

Many high-earning bartenders still oppose I-82. “You are able to make as much money as you are able through your ability, your knowledge, your passion, your work ethic as a tip worker,” says Zachary Hoffman, a D.C. bartender and manager who helped organize the Vote No on I-77 campaign. “It’s worked for me. It’s worked for thousands of other people.”

But it hasn’t worked for everyone.

Nearly 1 million restaurant workers never came back to the industry after the start of the pandemic, including 18,000 in D.C.—an exodus years in the making. “Finally, workers are, in this very historic way, saying, ‘I’m done,’ ” Jayaraman said. “ ‘That’s it, I am not going to put up with this anymore.’ ”

Black workers have left the industry at three times the rate of their white counterparts. Debbie Ricks, a veteran server in D.C., told me that by March 2020, she’d put up with disrespectful customers for years. “I’ve definitely waited on white people who you could tell it was like, ‘We kind of wish our waitress was white or blond,’ ” she said. “Customers were just a huge drain on my soul.” At one restaurant, an assistant manager confided that the house had been taking a portion of the tip pool. Ricks, 44, was working at the ping-pong bar SPIN DC when COVID hit and the staff was furloughed. “It wasn’t until 2020, when I lost my job, when it kind of became a wakeup call for me,” she told me. She never went back. “I have a right to self-preservation,” she explained.

The swing of the pendulum toward labor having more bargaining power—restaurants’ need for staff is far more desperate today than in 2018—could give the initiative’s supporters the upper hand. Already, One Fair Wage counts more than 130 restaurants in D.C. that now voluntarily pay tipped staff at least the regular $16.10 minimum wage in order to attract workers. Most city councilmembers, including Mendelson, say they won’t repeal I-82 if it prevails in November. 

This year will be a decisive juncture for this movement: The tipped wage is also back on the ballot in Portland, Maine, and a court ruled that Michigan’s universal minimum wage will be reinstated this winter. “All three places that were taken away from us in 2018, we’re winning in 2022,” Jayaraman said. “This is a moment of redemption, not just for D.C., but for all the places that won it and it was taken away unconstitutionally, undemocratically.” 

Workers share her optimism. Hawla sees a new interest in change compared to 2018, even among the cocktail bartender crowd. “We’ve all kind of come out of the lie we were living,” he said. He’s begun talking to colleagues about I-82 and appeared in a recent promotional video.

I-77 had barely registered to Ricks in 2018, but after finding work as a freelance photographer for ROC, she helped the group collect signatures for I-82. “People deserve higher wages,” she said. “It kind of takes away some of the power of customers who feel like, ‘I own you because I’m paying your wage.’ ”

Crespo, the cook who could not access unemployment benefits, described feeling energized by the movement for I-82. “What we want is respect and dignity for workers,” she told me. “I’m fighting for my friends, I’m fighting for my coworkers.” More than ever, when she sees exploitation at work, she feels empowered to step in.

“I know that I’m right,” she said. “And I know my rights.”

The post The Tipping Point appeared first on Washington Monthly.

When then-presidential candidate Bill Clinton first spoke about the idea for a national service program that eventually became AmeriCorps, the premise was simple: the federal government would help young people pay down their college loans if they engaged in public service for a year. AmeriCorps represented a civic call to action to young people from all backgrounds to improve their communities and consider a career in public service. Yet, when I signed up for AmeriCorps, I found the reality of the program to be very different from this grand vision. 

In 2019, I began my AmeriCorps service, excited to be assigned to a partner nonprofit in Upper Manhattan, organizing tenants to fight back against abusive landlords. When I collected my paycheck for my first paid position in public service, my wage was just over $7 an hour—not only less than minimum wage in New York City, where I lived, but also a 50-percent pay cut from my previous job as a bartender. 

I joined AmeriCorps for the same reasons that so many young Americans do: because I was drawn by the desire to serve and enter a career in public service. I deeply enjoyed helping community members request repairs, file complaints with the city, and prepare for legal action against neglectful landlords. I also helped organize community events and assisted with initiatives to improve neighborhood parks. And while I loved the work, I was constantly reminded of the financial hardship the program created for its corps members. 

Fortunately, I could live with my parents rent-free during my service; otherwise, the program would have been financially impossible. Other members of my program were not so lucky. Some took on multiple jobs to supplement the low living stipend, while others were housing insecure or resided in less-than-ideal living situations. 

Beyond the low living stipend, the program did little to prepare us for a career after our service. Our only support came from outdated resume-building workshops that most members I spoke with found unhelpful. I found this troubling. If AmeriCorps aims to create the next generation of civic-minded public servants, corps members need career support and professional development beyond basic training.

A few months before the end of my service year, the nonprofit where I worked received a grant, allowing them to hire additional full-time staff. They offered me a job (paying more than double my AmeriCorps living stipend) if I could start on a relatively quick timeline. Excited by the opportunity, I informed the AmeriCorps program staff, assuming such an offer was the ideal endpoint for a term of service. Instead, they told me that to take the job, I would have to resign from AmeriCorps, forfeiting my education award because I had not technically completed the full year. I didn’t want to give up the job offer, complete the program, and begin the job search anew while ineligible for unemployment assistance. So I chose to quit AmeriCorps, grateful for the opportunities it provided me but frustrated that it failed to set me up for a career after service.

AmeriCorps needs to embrace equity-based reforms if it hopes to be an accessible path into public service for young Americans from all backgrounds. Chief among these reforms is the need to raise the living stipend. There was a glimmer of hope this past year—a proposal to include AmeriCorps in the Build Back Better agenda, along with congressional funding to create a new Civilian Climate Corps (CCC). This funding would have increased the number of service members, raised the AmeriCorps minimum wage to $15/hour, and provided billions for its administrative needs. Unfortunately, the funding for AmeriCorps and the CCC was cut from the final iteration of the reconciliation package, the Inflation Reduction Act. 

Last month, I released a report for Next100, a startup think tank working to diversify the policy sector and empower impacted communities to develop policy, outlining steps that the agency, Congress, and the Biden administration should take to advance workforce development in the program. One of the major burdens stopping AmeriCorps programs from offering adequate workforce development is the 80/20 rule, which states that members can spend no more than 20 percent of their overall service time on educational and development activities. Intended to keep participants service-oriented, the rule has adversely resulted in many AmeriCorps programs struggling to train their members, offer skill building, and provide adequate workforce development opportunities within the time allowed by this rule. To remedy this, the AmeriCorps agency, with Congressional authorization, should exclude training that targets post-service career development from the 20 percent cap. Moreover, the agency should create a “Workforce Development Program Track” that AmeriCorps grant recipients can opt into. Within this track, eligible programs would be exempt from the requirements of the 80/20 rule and instead would be responsible for meeting certain professional development goals, such as providing a useful credential, working with a high-need population, or tracking post-service outcomes for members. 

The AmeriCorps federal agency should also begin collecting and tracking data on post-service outcomes for AmeriCorps members, including how long it takes for graduates to find a job or postsecondary educational opportunity after their service, what they are paid in those positions, and whether they stay in public service. Such data would help the agency better understand which of its programs are most successful in connecting members with professional or educational opportunities after their service year and empower programs to improve their workforce development training. In doing so, AmeriCorps must be mindful that many grantee organizations are already overwhelmed by its grant requirements and seek to not only streamline this data collection but also offer additional sources of funding to cover the costs of increased reporting requirements, perhaps through a new data collection pilot program.

Lastly, AmeriCorps should embrace interagency partnerships to strengthen workforce development, taking advantage of existing programs. The agency could partner with the U.S. Department of Labor (DOL), for example, to identify opportunities to braid together federal funding streams, combining AmeriCorps funding with DOL funding sources such as employment and training administration programs, dislocated workers grants, and reentry employment programs. Doing so would allow participants to gain the benefits of AmeriCorps service while also receiving the training, workforce development, and wraparound services already funded by the DOL.

I joined AmeriCorps for all of the reasons President Clinton laid out so many years ago—because I wanted to help the most vulnerable members of my community and begin what I hoped would be a career-long journey in public service. AmeriCorps can still live up to those grand ideals, but only if the agency, Congress, and the Biden administration embrace workforce development best practices and pay corps members better wages. With these changes, the program can truly be an accessible, equitable, and empowering pathway for young people to start their careers in public service.

The post AmeriCorps Must Embrace Workforce Development appeared first on Washington Monthly.

Advanced College is a for-profit school in South Gate, California, a Los Angeles suburb that’s 95 percent Hispanic. Photos on Google Maps show a one-story beige building with a small parking lot. A banner on a car stereo store next door announces, “No Credit Needed.” Two doors down, there’s a crematorium, and across the street, a burger shop. Advanced College offers only seven programs, according to its website, including a credential in “computerized accounting” (tuition and fees: $13,573), a certificate in phlebotomy ($3,500), and a certificate in vocational nursing ($35,000). 

The Department of Education’s College Scorecard reports that the school had only 31 students and a mere 52 percent completion rate as of July. And despite the name, just 43 percent of Advanced College’s students earn more than they would with just a high school degree. The school is under the dreaded “heightened monitoring” by the Education Department for “financial or federal compliance issues.” 

Nevertheless, Advanced College is among the approximately 1,000 “eligible training providers” as of July 22 (and more than 5,700 programs) approved by the state of California to receive training funds under the Workforce Innovation and Opportunity Act, the federal government’s largest workforce development program. Under the WIOA, state and local workforce agencies provide unemployed and underemployed workers “individual training accounts” (typically funded between $3,000 and $5,000) to pay for training from state-approved providers included on an “eligible training provider list”—an ETPL—required under federal law. (The only way an institution can get federal training dollars is to be on a state’s ETPL.) 

California’s ETPL includes high-performing institutions, but they are hard to distinguish from lesser schools and questionable for-profits. These include the Stellar Career College in Modesto, whose students earn a not-so-stellar median annual income of $25,723, according to the College Scorecard, and UEI College–Gardena, where 93 percent of students take out federal loans and 22 percent are in default or delinquent. Also on California’s list is American River College, a community college in Sacramento with a 30 percent graduation rate, and various branches of the Milan Institute, a for-profit cosmetology school that, among other things, offers a 75-week course in “barbering” for $18,781. (It, too, is under Education Department monitoring.) 

These ETPLs are meant to ensure that workers qualifying for federal job training assistance have high-quality programs from which to choose. But as the California examples show, the lists fall short. As an instrument for giving workers “choice” while demanding “accountability” from training programs, ETPLs are a failure. And this is a major reason why federal job training efforts are much less effective than they could be. 

Rather than ensuring practical, affordable training for in-demand jobs, the lists are a haven for expensive for-profits and fly-by-night concerns. Some of the nation’s best training providers actually eschew being on an ETPL because of the bureaucratic hassles. At the same time, states’ poor data collection (despite all the bureaucracy) means that potential trainees can’t compare programs for the best investment of their time and federal aid. The Education Department’s College Scorecard, for instance, is not cross-referenced on ETPL sites, depriving a would-be trainee of valuable information. Collecting reliable performance data from providers has been a long-standing challenge. Worst of all, the ETPL represents an archaic approach to workforce development—“train and pray”—where workers enroll in training programs that may or may not match up to the jobs available or impart the skills that employers want.

With employers starved for skilled talent, the federal workforce development system should provide workers with the skills to land in-demand jobs. Yet the number of workers enrolled in WIOA-funded training has been declining, indicating a broken system. The best place to start is to fix who’s doing the training.

“The ETPL is a dinosaur,” says Kris Stadelman, who recently retired as executive director of the NOVA Workforce Board in Silicon Valley and was also CEO of the Workforce Development Council of Seattle-King County in Washington. “It does not at all work in the way it was designed,” she says. “And it should just be put to bed.” 

Congress appropriates nearly $3 billion a year to fund worker training programs via almost 2,400 “American Job Centers” authorized by the WIOA. Given this decentralized infrastructure, the ETPL was meant to provide workers with maximum flexibility in choosing a training program.

This concept of “customer choice” was also intended to fix an earlier iteration of the federal workforce program, the Job Training Partnership Act of 1982. Under this law, participants didn’t pick their training but were assigned to programs chosen and contracted out by local workforce development agencies. “Often these arrangements led to overconsumption of some training and lack of flexibility for funders, students, and employers,” a 2011 analysis by Carl Van Horn of Rutgers University and Aaron Fichtner of the New Jersey Department of Labor and Workforce Development concluded. Widely publicized incidents of abuse fueled the JTPA’s reputation as a boondoggle for state and local governments. 

In a 1990 screed from the Cato Institute, the journalist James Bovard excoriated the program for “providing contractors with a license to steal.” “JTPA has spent taxpayers’ money to set up a circus museum, teach cab drivers to smile, and enable a small-town mayor to fly to Japan,” he wrote. In addition to numerous audits by the Government Accountability Office and the Department of Labor’s inspector general faulting the program’s contracting practices, Bovard cited a 1988 investigation by The Plain Dealer, finding that Ohio Governor Richard Celeste had funneled $1.4 million in JTPA contracts to campaign contributors. Among these was a $100,000 effort “to train 32 unemployed coal miners to become engineering aides.” “Only two of the trainees got jobs, which is not surprising because there was no demand for engineering aides in the area of Ohio where the training occurred,” Bovard wrote. 

Successor legislation to the JTPA, the Workforce Investment Act of 1998, created the ETPL to be a tool for consumers—a Consumer Reports for training programs, as the former workforce director Stadelman says. Meant to help trainees, the ETPL has instead created a different set of pitfalls. 

One problem is that anyone can apply to become an eligible training provider. Most states actively solicit applications. The result is an array of programs that may or may not align with the skills and credentials a local economy needs. Among the more than 1,500 approved programs in Virginia, for example, trainees can pursue credentials in everything from an associate’s degree in diesel technology to certification as a wind turbine technician, an EMT, or a truck driver. They can also seek training as a bail bondsman, an ethical hacker, or a massage therapist and get certificates in such specialties as permanent cosmetic tattooing, professional horseshoeing, or the appropriate use of pepper spray (for aspiring security guards). No doubt these might be excellent programs, but what’s lacking is information about the availability of area jobs for students interested in these fields (that is, whether there’s a local shortage of farriers or cosmetic tattoo artists). 

In West Virginia, many of the approved providers are online and based out of state, so they might lack a connection with local employers. A scan through the state’s ETPL includes providers based in Ohio, Pennsylvania, Maryland, Michigan, and even California. (This would be the Ding King Training Institute, which offers a certificate in “painless dent repair” for vehicles for $13,000, according to West Virginia’s ETPL online.) 

The options are dizzying. “People don’t make good choices without a lot of instruction in the current labor market, an assessment of their skills, understanding not just who succeeds at that training but how much money they make at the end,” Stadelman says. 

And in California and Virginia, at least, the number of for-profit providers on the state’s approved provider lists equals or exceeds the number of public institutions, such as community colleges, which means that the choices available to students might be more expensive than they need to be. (Trainees pay out of pocket for costs above the training dollars provided in their individual training accounts.) 

A student interested in becoming an administrative assistant, for example, could enroll in a three-week, 120-hour certificate program at Rappahannock Community College for $320—or they could spend $4,000 for a certificate from the for-profit MD Technical School. Another for-profit, the Joshua Career Institute, offers a 600-hour certificate program for $8,000. Virginia’s ETPL describes all three offerings as “administrative assistant” training, and none of the programs have outcomes data available on the site (all values for completion rates and earnings are listed as zeros). 

Even though states don’t do much to police the schools allowed on their ETPLs, some for-profit providers exploit the fact that they are on the list as a badge of quality in their marketing. The online training provider MedCerts, which offers IT and health care certifications, boasts on its home page that it has “approved ETPL status in 30+ states.” Aryan Consulting and Staffing, an approved Maryland provider that offers entry-level pharmaceutical manufacturing training, promises, “If you are unemployed and receiving government benefits, you may be qualified for complementary training and placement program (sic).” The for-profit Medical Learning Center writes on its “Payment Options” page that it “is an approved Northern Virginia Workforce Investment (NVWIB) trainer provider for Virginia Residents. Funding is provided for Nurse Aide that covers the total cost (sic).”

A second problem plaguing the ETPL system is the lack of performance data. WIOA participants cannot tell which programs work and which don’t. 

“Everybody likes to talk about customer choice, but the caveat is that it’s got to be informed customer choice,” John Pallasch says. He was executive director of Kentucky’s workforce development program and served as assistant secretary for employment and training at the Department of Labor. “We have to give the customer better information—real-time information—so that they can make informed decisions.”

Department of Labor regulations require states to collect information from approved providers, including the number of WIOA participants enrolled in a particular course, the cost of the course, and outcomes such as the percentage of enrollees who receive a credential and whether they’re working. This data is supposed to be available on a state’s ETPL and on trainingproviderresults.gov, a project initiated by the Labor Department in 2019 that was intended to be for training programs what the College Scorecard is for colleges. 

But click on provider listings on a state’s ETPL or the website, and lots of information is missing. Clicking on the “Course Performance” tab for half a dozen approved courses on West Virginia’s ETPL yielded straight zeroes for such measures as “wages at placement,” “number employed after six months,” and “number receiving degree or certificate.” 

Trainingproviderresults.gov frequently shows only asterisks for employment rate, completion rate, and earnings with the note “Data Suppressed.” In fairness, the site is relatively new, and states have not finished submitting their data. But the problems are still profound. “The data in there is junk because that’s the data that the states are giving us,” says Pallasch, under whose watch the site was launched. 

One problem is that training providers aren’t handing over data, a challenge that dates back to the 1998 Workforce Investment Act. In a 2003 audit, the Department of Labor’s Office of the Inspector General found that many ETPL providers considered reporting requirements to be “burdensome,” especially if they didn’t have many WIOA-funded students. “The cost of collecting the data often exceeded the benefit when few WIA participants were in a class,” the office reported. Some programs also worried that disclosing personal information about students, such as Social Security numbers and wage data, would violate students’ privacy rights and subject them to liability.

Although new regulations have since resolved the privacy concerns, a November 2020 report from the research organization Mathematica found that in many states, local officials still said training providers “could not, or would not, provide the required performance data.” 

It’s not clear, however, that training providers would be forthcoming with their data, even if barriers disappeared. I emailed 10 providers on the Virginia and Maryland ETPLs, asking about the number of WIOA-funded participants they’ve served in the past year and their outcomes. Eight out of 10 did not respond, and two failed to follow up after an initial response. 

Some training providers might be reluctant to disclose their outcomes because they don’t have good news to report. Pallasch suggests that states might not want to dig too deep, for fear of failing to meet federally mandated performance targets. “I know firsthand that in Kentucky, we cleaned the data well enough to get the performance measures and then we moved on,” he says. “We didn’t clean it pristinely, and there’s not a state out there that does, because there’s no incentive to do that at the state level.” 

The consequence of this missing data is that WIOA participants don’t have the information they need. It also means that poor-performing programs slide under the radar. 

“If we’re being honest about our eligible training provider lists right now, we know that they are bloated. We know that there are programs on there that are not performing,” Pallasch says. “States will tell you that they have a process to go through and check performance and purge their lists, but I would love to see an audit trail. I would love for any state to say, ‘Here are the 2,200 programs we had on the list last year. Here’s the data we looked at, we kicked these 400 off, and we brought these 200 on.’ I assure you there’s not a state out there doing that.”

On the other hand, ironically, some of the nation’s best providers aren’t even on state ETPLs, because of onerous reporting requirements.

Particularly problematic is a requirement that approved providers report performance on all students, not just those funded by the WIOA (though this requirement was frequently waived during the pandemic). Many community colleges opt out of applying for a state’s ETPL because they don’t “have the capacity to collect and report on these data for their thousands of students, even if they did decide that being on the ETP list was important,” according to Mathematica.

National or multistate providers have to meet the requirements of multiple ETPLs. “If you’re LinkedIn Learning or a Cisco certifications class, would you want to submit to all 50 states the data on everybody who took your class and whether or not they got a job and how much they made if they got a job?” Kris Stadelman says. “No. So you just never get on the ETPL.” 

“Many small organizations that run good programs opt out [because] it’s too bureaucratic,” the former director of a nationally recognized training program based in Maryland says. (They declined to use their name or the name of their institution to preserve relationships with state officials.) “We started to pursue [an ETPL application] but stopped because the process … was lengthy, and it was clear they were going to mess with a program we felt good about. We didn’t want to change it for dribs and drabs of money.”

Among the cutting-edge institutions you won’t find on state ETPLs are well-regarded ones like Western Governors University, an online institution that offers skills-based credentials, and Southern New Hampshire University. (The Washington Monthly has written about Western Governors University in the past, and SNHU has ranked in our top 20 best colleges for adult learners.) Amazingly, SNHU is not on New Hampshire’s ETPL. Ultimately, it is WIOA participants who lose out. The result is not protection for the consumer but limits on choice and limits on marketable skills workers can acquire,” Stadelman says.

A third and final problem with ETPLs is philosophical: their reliance on “consumer choice,” without sufficient consideration of that training’s ultimate value. Only about one in three people who enroll in WIOA training ends up in a job related to that training, according to Labor Department data. The problem, Pallasch says, is the lack of employer input into the kinds of programs the WIOA offers and that participants enroll in. “We ask people, ‘Hey, what do you want to be when you grow up? Okay, great, go into training.’ And then they finish their training and come back to the job center asking for job search assistance,” he says. 

It doesn’t have to be this way. One obvious solution for fixing the ETPL is for the federal government to insist on better data and provider quality. 

“As much as I don’t like … the big bad Department of Labor saying, ‘States, you must do this,’ ” John Pallasch says, “in some instances the department can signal, ‘Hey, we’re serious about performance. We’re serious about accountability. We’re serious about outcomes.’ ” 

To overcome states’ worries about failing to meet federal performance targets if outcomes aren’t up to snuff, states could get temporary “amnesty” for coming clean and a grace period from penalties while they purge their lists of poor performers. At the same time, Congress should modify the requirement that ETPL providers report on all participants, opening the door to more community colleges and national providers, as some advocates have urged. 

Another step is to prohibit states from including on ETPLs institutions that would fail the “gainful employment” rules proposed by the Biden administration to regulate the quality of two- and four-year institutions—and particularly for-profits—that rely on federal student loans. (For an idea of which schools might be removed from the ETPLs, see “The Best and Worst Colleges for Vocational Certificates”.) This change would not get at the many training providers that only rely on WIOA dollars and not on federal student loans to finance students’ education, but it would be a good start.

California’s South Bay Workforce Investment Board, one of the nation’s better workforce development agencies, is a rare example of how an ETPL works when good data is a priority. 

Operating just south of Los Angeles, the organization created its own approved provider list that the executive director, Jan Vogel, says benefits from a rigorous screening process for training providers. “We kick people off the list all the time,” he says. 

Vogel asks private-sector industry experts to evaluate an applicant’s curriculum before the program is added to the ETPL—something most state agencies don’t typically do. “We might go to a school that’s nice and clean with a shiny sign and give them an ‘A,’ but our expert would say, ‘Your curriculum is not up to industry standards, the teachers are using a curriculum that’s archaic, and we wouldn’t hire them coming out of that course,’ ” Vogel says. “We wouldn’t have known that, so having an industry expert give us that information is very helpful.” 

Vogel’s team also checks the books of for-profit providers applying to the ETPL—another unusual step. It scrutinizes performance, too. “We don’t go simply by what they tell us,” he says. “We actually verify placements to see whether or not it is accurate.” 

Congress should use carrots and sticks to encourage more workforce development agencies to be like South Bay. It should also make the system employer driven, rather than solely reliant on “customer choice,” so training providers and their programs impart the skills and credentials employers want. This approach might not require an ETPL at all. 

The best models for this are state workforce development efforts, such as Virginia’s Fast Forward program (formerly the New Economy Workforce Credential Grant), offered through the commonwealth’s community colleges. 

Fast Forward offers short training programs (six to 12 weeks) where enrollees earn industry-approved credentials for a specific list of 40 in-demand careers in health care, IT, business, manufacturing, logistics, and skilled trades. Local businesses work with a community college to design curricula. Some programs even have “guaranteed interview agreements with local businesses,” the initiative’s website says. Since its launch in 2016, the program has boasted a 90 percent completion rate and has awarded more than 32,700 credentials. Students have seen dramatic annual wage increases ($11,626 on average, or 55 percent). 

By contrast, just 3,121 people enrolled in Virginia’s WIOA adult and dislocated worker programs between April 2020 and March 2021. Of those who finished their training, median quarterly earnings were $6,156 six months after exit ($24,624 on an annualized basis). 

According to the National Association for Business Economics, a trade association for professional economists, more than half of businesses in January 2022—57 percent—said they couldn’t find enough skilled workers to hire. This skills crunch will continue in the long run. By 2030, the placement giant Korn Ferry reports, the U.S. will need 6.5 million more “highly skilled” workers (that is, with some postsecondary credential) than it is on track to produce, particularly in fields like IT and advanced manufacturing. 

The nation’s public workforce system should ensure that U.S. workers don’t miss out on these opportunities. Americans deserve quality training that’s worthy of their potential.

The post Train in Vain  appeared first on Washington Monthly.

If you have a job making political advertising for Democrats, you may want to save the video clip of this one for later use.

Labor Secretary Alex Acosta resigned Friday amid intense scrutiny of his role as a U.S. attorney a decade ago in a deal with Jeffrey Epstein that allowed the financier to plead guilty to lesser offenses in a sex-crimes case involving underage girls.

President Trump told reporters Friday morning that Acosta had decided to step aside. He called Acosta a “great labor secretary, not a good one” and a “tremendous talent.”

“This was him, not me,” Trump said of the resignation decision, as Acosta stood by his side. “I said to Alex, you don’t have to do this.”

It’s customary whenever possible for a president to say kind things about a cabinet member who is stepping down. Even if everyone knows that the president is actually furious with the person, you can expect them to say that they did a good job and they’re grateful for their service. It’s also completely normal for the president to claim that the decision wasn’t theirs and they accepted the resignation with some reluctance, even though this is only rarely true.

But this isn’t an ordinary case. This isn’t about taking unauthorized flights or buying fancy office furniture or even run-of-the mill-cronyism and corruption. This is about an extensive international underage sex slavery ring. Secretary Acosta, who announced that his resignation will become official next week, has been rebuked by a federal judge for wrongly keeping the victims in the dark about a non-prosecution agreement he struck with Jeffrey Epstein’s lawyers. This is a grotesque and unprecedented scandal involving a former close personal friend of the president.

Trump did not have to say that Acosta was “a tremendous talent” or that he’s been “great labor secretary, not a good one.” He didn’t even have to show Acosta the usual courtesies given that he’s been exposed as an unconscionable public official.

Acosta is leaving Trump’s cabinet because the public outcry has been too much to withstand, and Trump decided to create as little distance from his as possible. That’s political malpractice, but hardly unprecedented. He should have showed anger and a sense of betrayal toward Michael Flynn and Paul Manafort but instead praised and dangled pardons in front of them. Even when he has a decent case to make that he’s been ill-served and did not know what his underlings were doing or had done, he chooses to embrace and protect them.

At some point in the general election, Trump will be asked about why he has the habit of employing people who get arrested, resign in disgrace, or both. No doubt, he’ll be dishonest about his record in these cases, which is why you want the video footage of him praising these people.

If you can’t separate yourself from a guy like Acosta, you have to pay a hefty political price for it. I’m sure the Democratic ad-makers understand this.

The post Alex Acosta Resigns As Trump Praises His “Tremendous Talent” appeared first on Washington Monthly.

As detailed in the 1991 book The Jeffrey Dahmer Story: An American Nightmare by Don Davis, the crime scene in Dahmer’s Milwaukee apartment was a horror show:

A more detailed search of the apartment, conducted by the Criminal Investigation Bureau, revealed a total of four severed heads in Dahmer’s kitchen. A total of seven skulls—some painted, some bleached—were found in Dahmer’s bedroom and inside a closet. In addition, investigators discovered collected blood drippings upon a tray at the bottom of Dahmer’s refrigerator, plus two human hearts and a portion of arm muscle, each wrapped inside plastic bags upon the shelves. In Dahmer’s freezer, investigators discovered an entire torso, plus a bag of human organs and flesh stuck to the ice at the bottom. Elsewhere in Apartment 213, investigators discovered two entire skeletons, a pair of severed hands, two severed and preserved penises, a mummified scalp and, in the 57-gallon drum, three further dismembered torsos dissolving in the acid solution. A total of 74 Polaroid pictures detailing the dismemberment of Dahmer’s victims were found. In reference to the recovery of body parts and artifacts at 924 North 25th Street, the chief medical examiner later stated: “It was more like dismantling someone’s museum than an actual crime scene.”

Many of Dahmer’s victims were minors who he had lured off the streets with one enticement or another. The evidence against him obviously could not have been more overwhelming and he also helpfully confessed and pleaded guilty, which meant that the only disputes at trial were over his mental competence and the sentence he should receive. Fortunately, no powerful people worked behind the scenes on Dahmer’s behalf. Not so, apparently, in the case of Jeffrey Epstein:

Epstein’s name, I was told, had been raised by the Trump transition team when Alexander Acosta, the former U.S. attorney in Miami who’d infamously cut Epstein a non-prosecution plea deal back in 2007, was being interviewed for the job of labor secretary. The plea deal put a hard stop to a separate federal investigation of alleged sex crimes with minors and trafficking.

“Is the Epstein case going to cause a problem [for confirmation hearings]?” Acosta had been asked. Acosta had explained, breezily, apparently, that back in the day he’d had just one meeting on the Epstein case. He’d cut the non-prosecution deal with one of Epstein’s attorneys because he had “been told” to back off, that Epstein was above his pay grade. “I was told Epstein ‘belonged to intelligence’ and to leave it alone,” he told his interviewers in the Trump transition, who evidently thought that was a sufficient answer and went ahead and hired Acosta.

Jeffrey Dahmer was prosecuted by the state of Wisconsin and Jeffrey Epstein was ultimately prosecuted by the state of Florida, but that was only because of a secret non-prosecution agreement that Epstein made with our current Labor Secretary Alex Acosta who was then the U.S. Attorney for Southern Florida. Acosta claims he backed off prosecuting Epstein after he was told that Epstein “belonged to intelligence,” presumably meaning that he was a contract agent of the Central Intelligence Agency or perhaps another outfit like Naval Intelligence.

This was apparently all Acosta needed to hear. Epstein had been running a multi-state, in fact an international, underage sex-slavery ring involving an entire army of recruiters, schedulers, drivers, pilots, and paymasters that preyed on young girls and rented them out to rich and connected clients. But that was all non-prosecutable because someone alleged that Epstein had some ill-defined relationship with the intelligence community.

As a result, this is what happened:

Florida [federal] prosecutors had prepared a 53-page indictment accusing Mr. Epstein of being a sexual predator. But those charges were shelved in 2008 after an 11th-hour deal was reached between the United States attorney’s office in Miami and Mr. Epstein’s lawyers.

The agreement granted Mr. Epstein immunity from federal prosecution and let him plead guilty to two prostitution charges in state court. Federal prosecutors arranged for the plea deal to be kept secret from Mr. Epstein’s accusers until it was finalized in court.

The deal let Mr. Epstein avoid a possible life sentence in federal prison. Instead, he spent 13 months at a Palm Beach jail and was permitted to leave the facility six days a week for work. He was also required to register as a sex offender.

While Dahmer’s crimes were more gruesome and involved murder, he had a much smaller list of victims. I bring him up to serve as a more extreme example of Epstein, but no one should minimize the horror or pain that Epstein has caused. That he had friends in high places doesn’t make him any less dangerous than Dahmer. In fact, this arguably has made him more dangerous.

If Dahmer’s case had been investigated by the Feds and passed off to Wisconsin with a non-prosecution agreement that was kept hidden from the families of the victims, I don’t think people would be debating whether the person responsible should still be serving in Trump’s cabinet. I don’t think any possible “intelligence” connections would have made a difference.

Is the Epstein case really so different?

The post What if Jeffrey Dahmer Had Been Treated Like Jeffrey Epstein? appeared first on Washington Monthly.

Sounds like somebody is ripping off the poor. Somebody is. Only this time it isn’t the banks, the slumlords, or the faceless multinationals. It’s the AFL-CIO, with the consent and assistance of the federal government. In our land of unlimited possibilities, even the defender of the working man has devised a respectable way to steal from the poor.

One rehab is costing more than the other because the construction workers fixing it up are being paid significantly more. In the $23,000 building, a carpenter makes $13.34 an hour— not too shabby. In the $39,000 building, a carpenter makes $19 an hour. Both are doing the same work. In the cheaper building, a plumber makes $15.55 an hour and an electrician $16.27; in the more expensive one, a plumber makes $21.16 and an electrician $20.18. When you add up all the extra wages for workers in the more expensive building you get a surcharge of $16,000, which you pass along to the poor.

This enlightened arrangement is imposed by federal law. The $39,000 apartments are being renovated under a grant from the Department of Housing and Urban Development—which means they are a federal construction project, which means wages must comply with something called the Davis-Bacon Act, which means inflated prices.

Under Davis-Bacon, all construction workers in projects involving federal funds must be paid the “prevailing wage.” That sounds so self-evident you may wonder why anybody bothered writing it down, let alone enacting it into law. But the construction-trades unions know why. Using bureaucratic flash powder and presto-chango, the Department of Labor sees to it that the “prevailing wage” often means the highest possible union wage. In Montgomery County, Maryland, just outside Washington, you can hire a bulldozer operator for about $9 per hour. Yet when construction of Metro, Washington’s subway, pushed into the county, Labor officials ordered that bulldozer operators be paid $13.72 per hour. They ordered similarly inflated wages for other Metro workers. The net result, according to the General Accounting Office, is that Metro will cost at least $149 million more than it should. Pay more, get less is the government’s motto when it comes to construction—less housing for the poor, or less subway. Construction of Metro lines to Washington’s comfy white suburbs continues apace. But construction of the line to Anacostia, the city’s poorest and hardest-to-reach area, has been postponed indefinitely. Reason: “fiscal constraints.”

What’s that you say? You don’t care about the poor? How fashionable of you! Then maybe you care about the environment. Davis-Bacon has so inflated the cost of pollution-control projects that the EPA’s plan to finance a nationwide series of water-treatment plants has largely been stymied. A treatment plant in Houston, for instance, was held up and nearly canceled because Davis-Bacon inflated the price of its filter houses and dryers by 55 percent.

What? You don’t care about the environment either? You devil you, you must have known about tree pollution long before the rest of us. Surely, though, you must care about national security. Davis-Bacon is slowing construction of the Strategic Petroleum Reserve to a crawl, and slowing renovation of military bases. It will add many billions of dollars to the proposed MX missile system, which is essentially a construction project, thus delaying its completion for years.

The Davis-Bacon Act sets taxpayers back at least $2 billion a year in federal construction wages. It also indirectly inflates the cost of private construction, by “importing” high union wages into non-union areas, and driving small, cost-conscious contractors out of business. The total inflationary impact of Davis-Bacon is estimated to be as high as $20 billion a year.

In Washington, a city seemingly bent on creating automatic all-weather inflation guarantees, Davis-Bacon is a triumph of the art. It is artistically pure and uncompromised, serving no purpose whatsoever other than to raise prices. The act not only means higher wages for union workers on federal construction jobs, but nonunion workers as well, helping enhance Big Labor’s image ,and expand its scope. It’s one reason building unions have expanded with such success, organizing more than 40 percent of the country’s construction workers. “Davis-Bacon is the greatest treasure in Big Labor’s chest,” notes a unionized contractor.

Labor proponents paint Davis-Bacon not as a goodie, but as the last faint hope of a shoeless proletariat. Senator Harrison Williams, who until the Republican Senate takeover was chairman of the Labor Committee, says the law keeps “the living standards of construction workers” from being “sacrificed in the battle against inflation.” Construction workers suffer from a peculiar form of exploitation—they are among the highest-paid workers in the country. In 1978, the average construction worker made more than $8 an hour, while the average for manufacturing workers was about $5.50 an hour, and the average for all workers was much lower than that. In the battle against inflation, not only have construction workers not been sacrificed, they have yet to be conscripted—while the consumer price index rose 63 percent between 1969 and 1979, construction wages rose 130 percent. Davis-Bacon insures that average taxpaying stiffs shell out to subsidize this cream of the working crop, and it’s an especially white cream. Only about ten percent of journeymen in the building trades are black or Hispanic, far less than the share of minority group members in the population; union work rules are carefully calculated to keep it that way. (In construction, a journeyman is not a pitcher whose fastball can be clocked with a sundial, but an experienced worker with seniority.)

So Davis-Bacon seems like exactly the kind of boondoggle Ronald Reagan is looking for. It wastes taxes and increases the deficit without accomplishing anything. It subsidizes those who don’t need it. And best of all, it’s not fogged up by complex interrelationships with due-process rights and land-use planning in the Yucatan. Davis-Bacon can be dealt with swiftly and decisively, simply by repealing the law. Repeal would lower taxes, speed up important federal projects, stimulate the construction business, and increase opportunities for blacks and Hispanics. Bing, bang, boom. All it requires is a president with the courage of his convictions, a sincere belief in free-market economics, and a willingness to stand up to Big Labor, which should be good practice for standing up to the Russians.

Symptoms of Depression

As soon as Reagan wakes up from his nap, we’ll ask him if he is that president. Meanwhile, let’s see how Davis-Bacon works.

The law was passed in 1931, intended to combat the desperation of the Depression. At that time, the federal government was about the only builder anywhere. Jobs were so scarce and times were so hard that workers—especially Southern blacks—were fighting just for subsistence wages. Southern contractors formed “roving gangs” of starving blacks and traveled around the country, bidding on federal construction. They underbid whatever the already depressed local “prevailing wage” happened to be. By ordering that federal construction pay the “prevailing wage,” Congress not only took away the “roving gangs” advantage, but heated up the economy in keeping with the spend-your-wayout theory of ending the Depression. States began passing “little Davis-Bacons” that ordered prevailing wages for state and local construction; 40 states have them now.

The plumber making $21.16 is not a homeless dustbowl waif; however, the anti-Depression mechanisms of the act, whose purpose has long since expired, continue to jack up his wages.

Suppose, for example, you are a painting contractor in Carson City, Nevada. King Soopers is finishing a new supermarket, and wants it painted. It calls for bids. You figure out your cost of paints and materials, how many people you need and what to pay them, figure in the highest profit you dare, and submit a bid. If you’re lower than everybody else, you get the job. King Soopers does not ask to see your books, or negotiate individual items, like whether you pay painters or truck drivers more. It just asks how much you want, and when you can finish.

Now suppose the government is finishing a courthouse and wants it painted. You still have to bid on materials and timing, but you can’t bid on labor. Washington will set the labor rates, and every contractor wanting the job must bid the same rates. To set the rates, the Department of Labor will dispatch surveyors, whose purpose, even liberal economist Charles Schultze has said, is to pump wages up to “the construction union scale in the nearest large city.”

Here’s where the fun begins. The simplest way surveyors can express their pro-union bias is by not reporting evidence of non-union wages. The GAO found that when one Labor surveyor was setting wages for a residential housing project in California, he “systematically excluded” mention of 113 local carpenters making $2.50 to $4.50 an hour, recording only higher wages. If he had included the low-end wages in his survey, GAO said, he would have found the prevailing wage for carpenters to be $4.85. Instead he found it to be $6.54 an hour, and that’s what the government paid.

A Labor surveyor can be somewhat more subtle, and base wages on projects that have nothing to do with the business at hand, but pay better. When a U.S. Postal Service office air conditioner in Cumberland, North Carolina, needed overhaul, instead of examining other nearby air-conditioning jobs the Labor surveyor looked at a range of 53 projects, including installation of a sprinkler system in a men’s formal wear shop.

Roller Disco

But sometimes these little expediencies aren’t enough. Maybe it turns out all nearby construction workers are making pretty much the same thing–in other words, the surveyor has accidentally found the actual “prevailing wage.” That will never do. So he declares that nothing in the area is similar to the project under consideration, forcing him to “import” wages from somewhere else. That somewhere else is a large city, which will probably be unionized, and thus have higher rates. “Importing wage determinations has one and only one purpose,” said a member of the Carter White House’s Domestic Policy Staff. “It puts union wages into non-union areas. It doesn’t matter if there’s no union in Dubuque. They just bring in union rates from Chicago.”

The Department of Labor has become particularly adept at this procedure. Twenty-five to 38 percent of its wage determinations in building construction come from “noncontiguous counties,” as Labor calls them, the GAO found. In highway construction and similar work, GAO says, as much as 73 percent of the wages are airlifted in. A study by the University of Chicago further demonstrates the pro-union bias. In setting Davis-Bacon wages for projects in counties of more than 500,000 people—that is, large cities—Labor considered “noncontiguous” wage rates less than 15 percent of the time. In setting wages for counties of fewer than 5,000 people— that is, non-union towns—Labor brought in “noncontiguous” rates 95 percent of the time. Most often surveyors at least attempt to present some reason for wage importing, citing “specialized skills” or “unique circumstances.” At other times, they drop all pretense. Consider Cape May, New Jersey, a small town in the state’s sparsely populated, low-cost-of-living coastal area.

Cape May needed road repairs, and asked local contractors for bids. One, McCarthy Paving Co., bid the job based on local wages, like $5 an hour for a roller operator. Then New Jersey’s Department of Labor ruled that the state’s “little” Davis-Bacon law applied. It imposed a roller-operator wage of $16.

Running a roller—those big black cylinders with a seat on top—is little more than unskilled labor. “I can teach you to be a roller operator in half an hour,” said Jerald Barrett of McCarthy Paving. “When you want to go forward, push the stick forward. When you want to go back, pull it back. There. Now you’re a roller operator.”

McCarthy Paving still could have taken the contract, and not suffered immediately from the inflated wage structure. After all the government was paying for the job, so McCarthy Paving could just pass the costs along. But the company withdrew from the bidding, as do most nonunion contractors faced with Davis-Bacon rates. “Once I’ve paid a man $16 to run the roller, how am I going to keep him happy at $5?” Barrett asked. “Wages like that tear a company up. How do I keep the rest of my people who don’t get on this sweetheart job happy? I have tar-distributors [a skilled position that requires knowledge of math and drafting] who’ve been with me for ten years and are making $9 an hour. Nine dollars is a decent wage. What happens when they hear I took some guy in off the street and paid him $16 to sit on the roller?”

McCarthy Paving and other local contractors sued the state over its wage determinations. During the trial, they asked where the $16 figure came from. “Newark,” was the reply. Newark, 250 miles from Cape May, is the most populous and heavily unionized city in the state.

Road paving, of course, involves no “specialized skills” or “unique circumstances.” It is among the most common and simple construction activities. It’s so simple, in fact, that Cape May’s surrounding Cape May County government decided to go into the business itself. The county commissioners found they could buy their own paving equipment and hire permanent civil-service workers to run it for less than the cost of contracting out under Davis-Bacon. At present more than a dozen southern New Jersey towns have established road-paving departments, and more are planning to. What, then, has been the effect of Davis-Bacon in southern New Jersey? You guessed it—local contractors are out of work.

The 30% Solution

And if you liked that, you’ll love something called the “30 percent rule.” Like wage-importing and other survey techniques, it isn’t part of the original Davis-Bacon statute. It’s just a “rule,” something the Department of Labor dreamed up on a rainy Saturday afternoon. To a bulldozer operator, it’s the most golden rule of all.

Here’s how it works. Unions negotiate wages by “classification.” In other words, every unionized sheetmetal worker in Duluth gets the same hourly wage, say $10 an hour, regardless of what company he works for. But non-union companies do their negotiating separately. So a sheetmetal worker at one non-union Duluth company might get $11 an hour, while one at a different company gets $9 and so on.

When Labor surveyors go to Duluth to set wages for a government project, they’re supposed to examine all workers in the same classification. So if, for example, Duluth were a 100 percent union town, the Davis-Bacon wage would have to be $10, since that’s what every sheetmetal worker in Duluth would be making. (Unless the surveyors cooked up an excuse to throw Newark wages into the survey.)

Many towns, however, have both union and non-union workers, so surveyors must determine what the majority are paid. If, say, 60 percent of Duluth’s sheetmetal workers are getting $10, then that’s the majority, and that’s the federal wage.

You’ve been waiting for the Big But, and here it is: BUT what if there isn’t a clear majority? What if 31 percent are making $10 and 30 percent are making $9 and 30 percent are making $8 and the rest are making less? Then the wage selected is the highest wage for the greatest number of workers over 30 percent. Get it? Even though in Duluth as a whole (greater metropolitan Duluth, one might say) only 31 percent of sheetmetal workers are making $10, on the federal job everybody makes $10.

With rare exceptions, collectively bargained union wages are the highest in any given area. So this means that by organizing only 31 percent of an area’s workers, unions can effectively set rates for all an area’s workers, at least as far as government construction is concerned.

Have you ever asked yourself, “How come if unions represent so few people, they have so much power?” Now answer yourself.

Remember the painting contractor in Nevada? The Department of Labor actually sent surveyors to Carson City three years ago. The dauntless team of streetwise investigators found exactly eight painters. Three of them were making $12.40 an hour—damn good painters, one presumes, probably impressionists. The other five were making from $6.25 to $9 an hour. But since three out of eight is 38 percent, the 30 percent rule kicked in and the wage for government painters in Carson City was set at $12.40 an hour.

Wait, wait, there’s more. The Department of Labor can inflate construction wages using a variety of other methods, too. One involves the type of rate contractors charge. Most builders have a series of rates; low “residential” rates for housing, which is relatively easy to construct; higher “heavy” rates for highways, dams and similar projects; and steep “building” rates for high-rises and skyscrapers, which is the most difficult and dangerous type of work. On that water-treatment plant in Houston, for example, the Department of Labor decided a “heavy” wage for a cement mason would be $7.17 an hour, while a “building” wage for the same worker would be $11. So part of Davis-Bacon is a determination of whether residential, heavy or building rates apply to a project. The Houston plant was ruled to be “building” construction.

Washington’s Metro subway will be so expensive in part because the entire system was classified a “building” project, even though most of its trackage is above ground, and aboveground rail construction more closely resembles heavy-rate highway work than anything else. The Department of Labor has gone so far as to admit in congressional testimony that its practice of imposing building rates on federally financed housing for the poor costs $50 million a year.

To experience for yourself the actual procedure by which the Department of Labor chooses among these three rates, write the words RESIDENTIAL, HEAVY, and BUILDING on a dartboard. Close your eyes, and grasp a dart. Then throw the dart out of the window and choose BUILDING.

Another favor Labor does for federal projects is to determine what work rules apply, specifically whether union rules must be observed. Unions have lots of rules regarding hours and specialization and who is authorized to throw a line to a steeplejack if he’s about to fall off a building, but the key rule is the ratio of journeymen to apprentices. As mentioned before, journeymen have experience and seniority; apprentices are new on the job. Some construction skills, like being an electrician, take years to learn, and in them journeymen do notably superior work. But in many “classifications,” like sitting on a roller and pushing a stick, journeymen and apprentices are interchangeable.

The important differences between journeymen and apprentices, however, involve not performance, but money and race. Apprentices make a lot less than journeymen. In the case of the housing rehabs in Boston’s Fenway, where the Davis-Bacon carpenter was making $19 an hour, his apprentice was making $15.89. His counterpart, the private-project carpenter making $13.34 an hour, was assisted by an apprentice making $6.62. So a contractor would be able to charge a lot less if he could use more apprentices, but union (and hence Davis-Bacon) rules usually dictate at least five journeymen for every apprentice. Contractors would also be able to hire a lot more minority men and women, since most union journeymen are white and male, while apprentices may be -some combination less desirable from the union’s standpoint. “Davis-Bacon rules are white craft guild rules that make it very difficult to get minority people into a project,” said Phillip Mayfield of O.K. M. Associates, an adviser to the Boston rehab project.

Apprentices not only threaten the union’s status as a white enclave, but also its monopoly position. Limiting the number of apprentices limits the number of people who are available for promotion to journeyman, which means unions can demand higher wages for the few who make it. Of course, this means fewer workers can be employed, especially blacks and Hispanics. We might all be better off if there were lots of carpenters earning $13.34 an hour, instead of a handful earning $19. But making us all better off is not the Department of Labor’s job. That’s up to Congress.

Washington rulings about apprentice ratios not only inflate construction costs, but sabotage other government programs. Senator Jake Garn discovered last year, for instance, that at a HUD-sponsored self-help project in New York, where federal funds were going ostensibly to teach minority workers housing rehabilitation and building trades, the Department of Labor had imposed a ratio of 14 journeymen (teachers) to every one apprentice (student). The situation was so ridiculous, even Senator Williams pressured Labor for a change. Now the ratio is one journeyman (teacher) for every seven apprentices (students), which is a good ratio for instruction, and also Labor’s way of saying its original ruling was only off by a factor of 98.

No Appeal

Sometimes, even the best-laid inflationary plans go awry. Labor survey teams occasionally dream up rates that are lower than the true prevailing wage, thus insuring that the few workers who don’t enjoy windfall are zapped with an undeserved penalty. The Labor wage-setting apparatus is so scrambled that GAO has audited it seven times in the last ten years, and each time has come away with progressively more negative findings. In 1979 the normally reticent GAO said Labor had become so disorganized it couldn’t administer Davis-Bacon fairly even if it wanted to, and called for the act’s repeal.

It’s a mistake to think, however, that workers are the only ones who benefit from Davis-Bacon. When the act inflates the cost of a government job, contractors don’t just pass that cost along to the taxpayer—first they add their overhead and profit markups. So the higher the inflated wage, the greater the contractor’s profit. This means contractors doing all or most of their work on federal jobs (usually union contractors) are quite content with the law. Since the government is by far the largest construction buyer—some $45 billion of last year’s $200 billion construction industry was government work—this makes for a lot of fat, happy contractors to lobby for Davis-Bacon’s preservation.

“Under this act the government basically says, `We, as customer, insist on paying the highest possible price,'” notes Armand Thieblot, an economics professor at the University of Maryland. “How many businessmen do you suppose will say, ‘We refuse to charge the highest price’?” The contractors who don’t want the highest price generally are the small, non-union shops who fear a few months of inflated work will destroy their wage structures. Davis-Bacon rates for one federal housing project in Stoughton, Wisconsin, were set so much higher than local rates that all the contractors who bid on the contract dropped out, fearing disruption of the rest of their businesses. The housing developer then had no choice but to find an out-of-town contractor to take the job—an interesting inversion of the “roving gangs” protection Davis-Bacon was supposed to provide.

It is possible to appeal a Davis-Bacon wage determination, but such appeals are rare, since they are costly and time-consuming, and offer no assurance that the contractor doing the appealing (that is, demanding the right to charge less) will end up with the job after a new ruling. When MARTA, the Atlanta subway authority, got its Davis-Bacon wage structure in 1975, it appealed. MARTA economists figured the inflated wages would drive the cost of their subway up by at least $100 million. MARTA eventually prevailed and had its wage structure re-written, but construction start-up was delayed while the appeal dragged its way through hearing boards. In the process interest and carrying costs for the non-work ran at $200,000 a day, a bill that was forwarded to guess who?

Can’t Hire Taipei Paving

The Davis-Bacon statute itself, as it was written in the Depression, applies only to construction undertaken directly by Washington, like post offices. It has expanded in influence both through the “little” Davis-Bacons and by being written into other federal statutes. Some 77 federal laws, involving loan-guarantees and other indirect federal financing, now say all sponsored projects must abide by Davis-Bacon rules. The laws include the Commercial Fisheries Research and Development Act, the Indian Self-Determination and Educational Assistance Act, the National Technical Institutes for the Deaf Act, and the Domestic Volunteer Service Act. Davis-Bacon insures that money committed to the programs under these acts is channeled away from those it is intended to help to those who need it least.

How do the construction unions continue to get away with it? One reason is that they are one of the few segments of the economy that does not compete with overseas labor. Those teeming hordes of cheap, obedient workers in faraway lands serve as a kind of relief valve for wages. If a manufacturing union pushes its wages too high, management might react by moving operations elsewhere. In construction, there is no such alternative. You cannot have your subway tunnel dug in Hong Kong and shipped here.

Another reason is the protective shield the Department of Labor lowers over Big Labor, its primary constituent. When asked why government should not try to get the best deal on construction wages, just as it should get the best deal on roofing pitch and vanilla extract, Nik Edes, a deputy undersecretary of Labor, expressed revulsion for the very notion. “Wages should not be the mechanism for the competitive edge in government contracting,” Edes said. “Labor is not a commodity suitable for competition.” Edes suggested that businessmen should compete for government contracts by offering efficient management and cutting costs on materials.

Excluding labor from competition no doubt helps keep $19-an-hour carpenters from becoming alienated over exploitation of their surplus value, but it’s difficult to see how businessmen can magically compete on materials without indirect labor competition. Competing on materials means getting them cheaply, and that often means finding suppliers who pay their workers as little as possible. This tends to put suppliers who pay their workers high wages out of business. But far more important, labor is treated like a commodity when it is poured down the drain, which is exactly what Davis-Bacon does with it. If the government could pay individual construction workers less—not little, mind you, just less—it would be able to employ more of them. Government could build more housing for the poor, more water-treatment plants and subway stations, enhancing the general good as well as increasing employment.

Those good things—more government construction and more jobs—could happen only with true competition, and “competition” is a dirty word in Washington. (One HUD report defending the Davis-Bacon Act refers to price-undercutting on contracts as “an unscrupulous practice.”) The prevailing attitude in Washington—and state and local offices across the nation—is that running up the public’s bill is what government is all about. From defense contractors to insurance carriers to doctors and hospitals billing for Medicare, everyone saves his highest price for government. It’s just assumed The People pay the limit. The attitude starts at the top and works its way down; government is headed by congressmen who say they cannot live on $60,000—more than four times the median family income of the people they govern—and fly into righteous fury when someone proposes that they pay for their parking.

Edes was asked what might happen if Davis-Bacon were repealed. His voice dropped a dark octave and he warned, “Why, that would lead to a lot of unfair competition in which people would try to cut costs….”

‘Tis Better to Give Than Repeal

Hold on—what’s that I hear? It’s the clatter of horse hooves in the East Wing. That must mean Reagan has awakened from his nap, his waving hand refreshed and rejuvenated. He must be ready to do battle with the unions. What can we expect of the conservative Republican with the landslide legislative mandate?

During the early campaign, Reagan called Davis-Bacon “a needless burden on local taxpayers” and “a gift of tax funds to the affluent.” But that was before he endorsed the Chrysler bail-out, before he said forget about a national right-to-work law, before he, started sipping tea with those upstanding community leaders, the Teamsters, and before he said, in an October speech in Youngstown, Ohio, that he wouldn’t try to repeal Davis-Bacon. Reagan did say Davis-Bacon administration should be “tightened up.” Possibly he means to eliminate that “waste and fraud” he’s ever on the watch for, establishing once again that he will not sell out to any interest group that openly advocates fraud (it’s going to be a rough four years for the Pennsylvania congressional delegation).

Meanwhile, hard-line conservative Senator Orrin Hatch, who made loud noises about Davis-Bacon repeal when he rose to chairmanship of the Labor Committee after the election, has fallen silent. So have Garn and other long-time Davis-Bacon foes, who you might think would be trumpeting their moment of triumph. Republican Capitol Hill staffers say word has been passed to take it easy on Davis-Bacon. “There’s no point in going after it,” said one knowledgeable staffer. “It would be so much work politically. Besides, if we got it [repeal] out of the Senate, the House would just bottle it up, so why bother?” Meanwhile the “Stockman Manifesto” of new Office of Management and Budget Director David Stockman suggests leaving Davis-Bacon intact so as not to antagonize Big Labor, and thus win its cooperation on progressive social goals like relaxing pollution controls.

It may seem hard to believe that conservative, business-oriented Republicans could learn to love Davis-Bacon. But actually, it fits in smoothly with their philosophy of life. Liberals favor government handouts to the needy; conservatives favor handouts to the well-to-do. Davis-Bacon certainly passes that test.

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