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.

When Oliver Borchers-Williams was wrapping up his undergrad during the pandemic, he had offers on the table that would have taken him to New York, Washington, D.C., or Los Angeles. 

Instead, the North Dakota-born, Minnesota-bred graduate moved to Nebraska for a public service fellowship that put him to work on broadband access across 16 counties, some of which have fewer than 5,000 residents. Over the next two years that he served as an AmeriCorps-funded fellow in the American Connection Corps program, Borchers-Williams aided in turning a $4 million American Rescue Plan Act allocation into an $11 million investment and ultimately brought broadband to thousands of homes. Today, he’s still in Nebraska with the Southeast Nebraska Development District—now, as its director of broadband development. 

For Borchers-Williams, it’s simple: If he hadn’t done AmeriCorps, he would’ve taken his talent elsewhere—likely, to a city already rich with it. “I would’ve been off doing something else … definitely not in Nebraska,” he told me.

Before the Trump administration slashed AmeriCorps in April, terminating more than 1,000 grants, laying off over 30,000 current workers, and placing 85 percent of its federal staff on administrative leave, members worked across communities both urban and rural in all 50 states. These members represented a vital talent pool, especially in rural and post-industrial regions, overlooked towns, and smaller cities—locales that have experienced generations of skilled youth leaving for more “dynamic states” and major metro areas. In notices to terminated programs, the only reason provided was that their awards “no longer effectuated agency priorities.” 

According to the nonprofit America’s Service Commissions (ASC), thousands working rurally were affected. And in non-metropolitan communities, with less deep pockets, shorter philanthropic benches, and fewer places to turn for interim funding—where AmeriCorps is often the only support system—their absence will hit especially hard. “When you look at rural communities, it is not uncommon that if that AmeriCorps member wasn’t there, the service that they are taking on wouldn’t be happening at all,” said Kristen Bennett, chief executive officer with the nonprofit Service Year Alliance. 

AmeriCorps members serve with nonprofit and community-based organizations, public agencies, or schools. Those in rural communities worked as tutors, in food pantries, and in disaster response, to name just a few categories of services lost. In North Carolina, for example, 52 AmeriCorps workers were rebuilding homes damaged by Hurricane Helene. When the cuts hit, they were all recalled. 

In rural places, however, the losses won’t only be felt in terms of funding or social services, but in terms of people: the members themselves, and the possibility they stay. Time and again, Donald Trump has promised to expand apprenticeship and job training as part of his pledge to the “forgotten men and women” of rural America. But his cuts to AmeriCorps have eliminated thousands of positions that provided just that: on-the-job training and career pathways in industries crucial to rural prosperity. (In addition to gutting AmeriCorps—which, as Paul Glastris has shown, acts as a de facto apprenticeship program for nonprofits—Trump and the GOP are also cutting funding for traditional apprenticeships and other vocational programs, as Bill Scher recently reported.)

Haley Desilet, assistant director of the Rural Health Service Corps in upstate New York, told me that if her AmeriCorps members laid off in April can’t secure (limited) work in their rural placement communities, they’re off to cities. “We’re going to lose them,” she said.

By most measures, rural America is struggling. Rural communities are losing bank branches, hospitals, local news outlets, and grocery stores. Children growing up rurally are more likely to experience economic hardship, witness violence, or live with substance abuse or mental illness in the household. Since the beginning of Trump’s first term, the difference in average household income between metro and nonmetro areas has increased by nearly 30 percent. 

But rural communities also have a more insidious challenge, one underlying—and crucial to addressing—all the rest: They’re losing residents. Between 1910 and 2010, the population living rurally in the United States declined from 54 percent to 19 percent, and half of rural counties today have fewer residents than they did in 2000. Rural counties also skew older, with 5 percent more residents 65 and up than cities. 

This isn’t a simple story of youth flocking to metropolitan centers because they strive to join the ranks of coastal elites. In many cases, there just aren’t clear pathways for returning to or staying in smaller communities. “Coming out of college, even with an Ivy League degree, I would’ve struggled to find a job in Marquette,” said Evan Bonsall, who returned to his hometown of Marquette, Michigan with Lead For America—the nonprofit that operates the American Connection Corps today—in 2019. 

Following decades of deregulation that dismantled the policy levers designed to localize business and check the tendency of a select set of cities to dominate, it’s no wonder that opportunity and upward mobility are sparse in rural America. Service programs are by no means an antidote to geographic inequality, outmigration, or brain drain, but they represent a promising start—one that should be expanded.

“AmeriCorps brings people into towns more used to watching them leave,” Shannon Stober, an AmeriCorps alum, wrote on Instagram in the days following the cuts. “Sometimes, they stay.” When Stober first came to Bozeman, Montana with AmeriCorps in 2002, it was not the billionaire playground shown in Kevin Costner’s Yellowstone. Despite the rest of the country pouring in (Bozeman more than doubled in size between 1990 and 2022), she never left Montana, and has worked in and around service programs in the state for over two decades. 

Unlike the moneyed classes that Stober sees as coming to “extract” Montana’s culture or natural resources, she told me service corps members show up to contribute. They lead with questions rather than answers and often live in frontier communities outside the hubs of wealth, where housing is sparse and drives to groceries long. “Montana is a small town with a long road,” Stober said, adding that there’s almost no community along that road that doesn’t have at least one AmeriCorps alum. 

Nationwide, 43 percent of AmeriCorps alumni stay in their communities of service, with 27 percent hired on to the organization they served with. In some programs, the numbers are stronger: A survey of American Connection Corps alums this fall found that over 50 percent stayed put, and 36 percent were currently employed by their host organization, according to Taylor Stuckert, Lead for America’s chief executive officer. 

When members decide to stay rural, they can fill critical gaps. In her 12 years with the Rural Health Service Corps, Desilet said she has seen alums go on to programs that specialize in rural medicine, with some ultimately becoming the only primary care provider in their area. “Not all of them stay [rural], obviously, but hundreds have,” she said. 

Reasons for settling in vary, but several alums I spoke with described the lasting pull of affecting responsibilities. In rural communities, with less funding and limited human capital, service often means shouldering consequential work. For many, seeing the difference they’ve made encourages them to stay put. Arriving back in Marquette, a 22-year-old Bonsall was told, “Evan, you’re a planner,” and went on to rewrite his county’s overdue master plan. Just weeks after his 23rd birthday, he was elected to the city council, becoming the youngest representative in Marquette history.

Meaningful service “amplifies the connection that you feel to places,” said Borchers-Williams. “It gives you a sense of ownership of some of the progress that’s been made. And, at least for me, it really energized me to keep doing that sort of work.”

Members’ successes can also lead to new jobs in communities. Desilet said that host organizations are often able to persuade funders to pay for newly created positions for recent alumni by touting the impact of their service—saying, essentially, “‘Imagine what we could do if they were full-time, if they could stay.’” A 2018 survey of AmeriCorps alumni across five states found that 37 percent of full-time jobs that host sites offered to alums were newly created.

What’s more, those who stay can bring others to their communities. Mark Peiffer, an alum who served in West Virginia, now heads a food security nonprofit there that has hosted six AmeriCorps members since its founding in 2021. (The nonprofit, called Community Markets Inc., was hosting four members when their service was terminated in the administration’s April cuts.)

Meanwhile, as they help to revitalize forgotten corners of America, alums also contribute their own backgrounds and stories. As Tony Pipa, a senior fellow at the Brookings Institution, pointed out to me, the U.S. today is notably short on institutions that build relationships across geographic difference, especially from metropolitan to rural areas. Pipa, who hosts the podcast Reimagine Rural and sits on the Lead For America’s board, sees “renewing our vows around public service” as a critical step in combating political polarization.

AmeriCorps’s numbers—over 1 million volunteers since 1994—don’t add up to an all-encompassing solution for regions that have experienced generations of outmigration. But service programs are cost-effective investments, which, if expanded, would go a long way toward reversing the trend. By the most conservative estimate, AmeriCorps generates a $17 return on investment for every federal dollar invested. (ASC puts the figure at $34.)

Service opportunities connect people to places, whether familiar to them, or entirely new, building foundations for lasting love of those places to grow. In my case, the place was familiar. In 2019, I returned to my hometown of Arcata, California—tucked away on the state’s far North Coast, known historically for our bustling logging and marijuana industries—as a member of Lead For America’s first cohort of fellows. Stationed in the city manager’s office, I wrote city plans and grants, hosted community events, and was hired at the end of my two-year term. Service was my path back, when I knew home was where I wanted to be but didn’t see a way to get there. These days, the organization that made it happen for me seems to be in the clear funding-wise; They escaped the agency’s April grant terminations. Hundreds of others weren’t so lucky. 

There was no “rhyme or reason” to DOGE’s decimation of AmeriCorps, Rachel Bruns, ASC’s chief engagement officer, told me, but state programs—which more often serve rural areas—were harder-hit than national ones. Some lost every state-run program they had.

The slashings prompted 24 states and the District of Columbia to sue and, on June 5, a judge ruled in their favor, ordering the restoration of funds to the plaintiff states (and only to the plaintiffs). Because the suit ran roughly down partisan lines, with far more blue states signing on than red, some that lost their entire state portfolios—including Wyoming, Alabama, and Kansas—also lost their opportunity to change that fate. In Wyoming’s case, its congressional delegation has largely backed DOGE funding cuts. 

“President Trump campaigned on draining the swamp—and that’s exactly what DOGE is doing,” Wyoming Senator John Barrasso told Cowboy State Daily. Through AmeriCorps cuts alone, DOGE drained roughly $2.4 million in grants and scholarships from his state, according to ServeWyoming, a nonprofit that administers AmeriCorps grants in the state.

Even where funding has been ordered to be restored, programs will have to be restarted, members reinstated, and grants run through a federal agency that’s operating at only 15 percent staff capacity. 

For the Rural Health Service Corps, the funding pause has been “catastrophic,” according to Desilet, who said that some members have already left. Understandably, they couldn’t wait around for months without pay. On June 26, weeks after the decision, plaintiff states received guidance on how to reinstate members. 

It’s the same story we’ve seen over and over in Trump’s second term: It’s quicker and easier to break things than to put them back together. In rural communities, where it’s harder to get service programs up and running, much less sustain them, picking up the pieces will be particularly tough.

If Republicans intend to address generations of flight from rural America by creating “massive numbers of jobs” and “rebuilding” communities, as Trump recently promised to do, they should be fighting for and expanding AmeriCorps, not cutting it. 

The post How AmeriCorps Kept Young Talent in Rural Communities appeared first on Washington Monthly.

Walk down the eastern steps of the U.S. Capitol and follow Pennsylvania Avenue for several miles, and you’ll find yourself in District Heights, Maryland. Even without knowing much about the majority-Black suburb, you will quickly get the sense that District Heights is poor. Instead of shopping centers with Panera and Starbucks, you see names like Ace Cash Express, the nation’s largest check-cashing chain, and dd’s DISCOUNTS, a bargain clothing outlet. Alongside them is another class of business you might not notice, less obviously low-rent but still very much dependent on poverty. There’s Liberty Tax, a nationwide franchise operation that helps residents file for low-income tax credits; Pine Dentistry (formerly “Kool Smiles”), which serves patients on Medicaid; and Woodland Springs, an apartment complex that welcomes tenants with housing vouchers. These are private businesses, but they deliver public services using taxpayer dollars. And as the journalist Anne Kim argues in Poverty for Profit, these storefronts are more than just a signal of race and wealth. They are signposts of exploitation.

Kim, a Washington Monthly contributing editor, opens her book with a drive through District Heights, taking us inside each of these establishments to reveal how, here and across America, they serve as middlemen between government benefits and the poor. Over the past few decades, she reveals, a vast corporate ecosystem has grown to monopolize and extract enormous profits from various “markets” for social services: dentistry, dialysis, tax credits, job training, housing, and more. 

In theory, a private company could provide these services just as well as a government agency could—perhaps even better. But time and again Kim shows how these businesses cut corners, deliver poor results, and systematically abuse their clients, all in the name of profit. Both sides of the political divide have failed to police or even to comprehend this growing industry, and as a result are failing to address the issue. Liberals focus on increasing funding, not recognizing that these companies will eagerly siphon it away. Conservatives want more accountability for beneficiaries, even though such demands make the programs more complex, thereby giving private corporations opportunities to step in and drain away more taxpayer money. To truly fix the problem, Kim argues, you need to understand the poverty-for-profit industry.

Kim’s first chapter takes us to Rogers, Arkansas, where at Rogers Car-Mart you can get your taxes done and buy a used car at the same time. Businesses like this one have sprung up all over the country to take advantage of the Earned Income Tax Credit, a broadly popular policy that lifted 7 million above the poverty line in 2022. The EITC is the primary tax benefit for low-income workers, and serves as a critical chunk of annual income for many households. But the complexity of claiming it—multiple formulas, dozens of pages of reading—is a lure for predatory practices. 

When Kim visited Rogers Car-Mart in spring 2022 and asked for an estimate for herself, the business quoted her $198 to file a federal and state return. The preparer would tack on a $93 charge if Kim received a refund, along with a $27 “check printing fee” for an advance on the money. These costs add up to about 15 percent of the average federal refund in 2022. She could then use the rest of her refund as part of a down payment on a used car. Kim could have walked into Rogers Car-Mart expecting a $2,000 refund—the average amount that EITC-claiming families receive annually—and walked out of there with every penny going to this hybrid tax preparer/car dealer. “That, of course, is the idea,” Kim writes. Tax-time retailers will sell you discount shoes, pawned jewelry, and a rent-to-own TV along with your fee-laden return—all in order to capture as much of your refund as possible.

What lures the working poor into these exploitative businesses is that they need help filing their taxes to get the EITC benefit. When policy makers devised the program in the 1970s, they were adamant that it should benefit working families who have income to report, rather than nonworking people. Over the years, lawmakers have demanded more and more layers of reporting to police that distinction, resulting in an ever more complex process for filers. The IRS instructions for the EITC are three times longer than instructions for the alternative minimum tax, a similar tax break that almost exclusively benefits the wealthy, and use eight different formulas to calculate eligibility for filers and their dependents.  

As strange as it may sound, Kim’s $318 quote at Rogers Car-Mart was a relative bargain. An investigation by a Washington, D.C., antipoverty nonprofit revealed that tax prep for EITC filers can run from $400 to as high as $1,200. To make matters worse, low-income workers often get subpar service from these largely unregulated preparers. An investigation by the Government Accountability Office in 2014 found that only two of 19 companies did a tax return correctly, and the Treasury Department found that in 2017 one-quarter of EITC dollars were issued improperly. Some outright fraudulent companies falsely inflate clients’ refunds and then pocket the difference. The IRS audits low-income filers five times as often as everyone else. When that happens, it’s the families, not the preparers they paid, who are on the hook. 

Meanwhile, the IRS is well aware that this needless complexity leads to waste and fraud and that the agency could easily solve this problem. The IRS already has all the wage and income information it needs to determine a filer’s EITC eligibility; it could automatically fill out and mail them their tax returns. (It could do the same for most middle- and lower-income Americans, who don’t have lots of complicated investments and deductions.) Democrats have long urged such reforms. Yet tax prep companies have spent millions on lobbying—up to $5 million in 2016 alone, according to a report by ProPublica—to stop the IRS from implementing this “return-free” filing, and they’ve found ready allies among Republicans in Congress. 

Next, Kim moves us to East Los Angeles, California, where 96 percent of residents are Hispanic and more than a quarter of children live in poverty. With only 11 percent of the population holding a bachelor’s degree (compared to 36 percent statewide), International College, a local job training program, would seem to offer a way up. But the for-profit school has only five courses, including a cake decoration class that promises to teach students “how to properly bake and ice a cake.” The course is online, and costs $5,100. Less than half of students who enrolled at International College in 2020 finished their classes—that is, except for cake decoration, which three students took and completed that year. 

There’s no evidence that anyone who graduated landed a job, because the school didn’t bother to fill in the job placement data required by the state, which covers the tuition for many of the students through the federally funded, state-administered Workforce Innovation and Opportunity Act (WIOA). Yet despite the school’s refusal to even try to justify its government subsidies, it remains on California’s approved list of workforce training providers. That list includes some high-performing institutions, but job seekers have no way to distinguish them from the reams of low-performing and sometimes shady options. The situation is hardly better in other states. Nationally, WIOA participants earn less per year than the typical worker who lacks a high school degree. 

A similar lack of oversight plagues Job Corps, the government’s largest education and training program for low-income people, with an annual budget of $1.7 billion. The program is mostly run by a duopoly of for-profit government contractors, with perennially poor results. A report by the inspector general in 2018 found that the program did not place students in “meaningful jobs appropriate to their training” and the majority of graduates made less than the median income for workers without high school diplomas. 

Yet money continues to flow to these programs, thanks to a combination of aggressive lobbying by the companies that profit, and good old-fashioned pork barrel politics. Job Corps participants are required to live in residences that require staff. These centers can provide quite a few jobs for some communities that desperately need employment, which makes closing the centers politically unpalatable. Job Corps contractors are not shy about reminding politicians how unpopular it would be to cut jobs in their own districts. This prevents government funding from going to better-performing programs, such as Year Up, a nonprofit that since 2000 has trained more than 29,000 people for jobs in IT, software development, and more. 

Kim credits much of the shift toward the corporate takeover of social services to Emanuel Savas, an academic and public administrator who is widely acknowledged as the father of “privatization.” His work fueled the conservative campaign in the 1980s to take government services away from unaccountable bureaucracies and entrust them to efficient, competitive entrepreneurs. Ronald Reagan embraced Savas’s ideas and appointed him as an assistant secretary at the Department of Housing and Urban Development. There, Savas championed the policy of moving public housing recipients out of government-run high-rises into private apartments by providing them with what were then called “Section 8” housing vouchers. Future presidents, including Bill Clinton, accelerated that policy. 

Kim acknowledges that many public housing projects were hellish places to live. But she also makes clear that housing vouchers haven’t lived up to their promise either. Advocates envisioned that vouchers would help the poor escape high-poverty neighborhoods. Yet the dearth of affordable housing generally, combined with the fact that landlords in most states aren’t required to rent to voucher recipients, means there is a great undersupply of apartments recipients can rent, and the vast majority that are available are in poor neighborhoods, with their attendant high crime and substandard schools. This gap between supply and demand also allows unscrupulous landlords to profit off the voucher holder’s limited options by providing substandard homes at inflated prices. An investigation by The Washington Post found that the city of D.C. was paying $2,467 per month for an apartment for an elderly resident when the market rate for a similar apartment was $1,613 per month.

In the criminal justice realm, the most infamous example of privatization is the for-profit prison industry. So tempting are the potential returns that some private companies have been known to build “speculative” prisons in rural areas with high unemployment, and then encourage local leaders to secure a contract. This works. 

But profiteering isn’t limited to for-profit incarceration. It’s rife in state-run institutions, too, which contract with outside vendors that charge inmates exorbitant fees for food, toiletries, health care, and other services. Some prison telecom vendors demand nearly $25 for a 15-minute in-state call, and companies like Western Union will charge up to $12 to transfer $25 into an inmate’s phone account. The disproportionately Black prison population performs forced labor for pennies an hour, a practice that civil rights advocates often compare to slavery. State prisons even bill inmates for their incarceration. One man in Florida was charged $50 per day for his nearly three-year stay in state prison (about $55,000 total). In Connecticut, the daily rate is $249. 

These and other exploitative arrangements continue in large part because state prison systems, at the behest of governors and legislatures, receive a cut of the profit. Essentially, state policy makers have decided to soak the families of inmates (because that’s who mostly pays these fees) to relieve themselves of having to ask taxpayers to shoulder more of the financial burden of administering public prisons.

Incentive structures are also to blame in other policy realms, like health care. Kim shows how many Medicaid programs use fee-for-service models that reward companies for performing more procedures rather than for providing better care. The average Medicaid reimbursement for child dental services is just 61 percent of the fees paid by private insurance. Most dentists refuse to take Medicaid patients for this reason. For those that do take Medicaid patients, many of them corporate-owned practices, this payment model encourages providers to cram as many bodies into a room as possible. Children get dental work with their heads barely a few feet apart. 

These providers also pressure parents to allow costly and unnecessary dental work on their children, for which reimbursements are much higher than for routine procedures like dental cleanings. Kim recounts instances of young children getting as many as 17 root canals and caps. An article published in 2022 by the Journal of the American Dental Association found that children on Medicaid were more likely to have multiple root canals than children with private insurance.

To perform these procedures on small children, many clinics have resorted to cruel tactics that are frowned upon elsewhere in commercial dentistry. A Kool Smiles clinic in Connecticut wrapped children in cocoon-like structures called “papoose boards” to keep them from squirming during long and painful procedures, according to a whistle-blower. The same whistleblower reported that the clinic kept a hair dryer for children who wet themselves from fear and pain. In Maryland, a Kool Smiles dentist propped open a patient’s mouth so painfully wide for a “baby root canal” that she vomited halfway through the procedure. The dentist turned the patient on her side and suctioned her mouth and throat so she would not choke. The Justice Department reached a $23.9 million settlement in 2018 with Benevis and its affiliated Kool Smiles dental clinics for submitting false claims and performing medically unnecessary procedures for children on Medicaid. Investigations of other Medicaid providers have revealed similarly horrifying dental practices and overtreatment. 

Kim also shows that things are no better in the private dialysis market, which is largely controlled by two companies—DaVita and Fresenius Medical Care. To maximize profits on Medicaid’s low reimbursement rates for blood transfusions, these firms rush patients through dialysis in their factory-line centers, where people are regularly carted away with extreme exhaustion and sometimes heart failure after having the blood pumped through their bodies at dizzying speeds. Simply raising reimbursement rates is not the answer, Kim notes. Only months after Connecticut raised fees for Medicaid dentists in 2008, it saw a spike in expensive dental work as profiteers capitalized on the higher rates. 

As the Connecticut experience shows, these can be thorny issues to solve, but Kim outlines several steps that the government can take. To start off, she calls for the federal government to conduct a comprehensive “census” of privatized social services, which operate largely in the dark. With more information, policy makers can craft wiser solutions and conduct more effective oversight, which is badly needed, given the billions wasted and defrauded across the industry each year. Governments should follow up by exercising their policing powers—for instance, by kicking poorly performing colleges off their list of approved workforce training providers. 

Changing the incentive structure could also help. Kim laments how fee-for-service medical care leads to abuse, but she does not mention by name the leading alternative, value-based care, which rewards providers for delivering better health outcomes. Medicare, a handful of states, and countries like Germany, France, and the United Kingdom have adopted variants of this model, also known as “pay for performance,” with moderate success. The government could also leverage its huge buying power to improve what’s available to low-income families, similar to how big public health programs like the VA negotiate lower prices for prescriptions and medical care. 

More fundamentally, state and federal authorities should consider clawing back some of the responsibilities they have handed to private corporations. In many cases, government bureaucracies are better at delivering public services—for example, the most successful Job Corps programs, Kim notes, are run by the U.S. Forest Service. If the IRS can eliminate the need for EITC recipients and other Americans to rely on a predatory tax prep industry, why not empower it to do so? The Biden administration took a big step forward this year with a pilot project that allowed taxpayers in 12 states to file electronically for free with the IRS. In late May, the IRS announced that it would make the program permanent and expand it to all 50 states and the District of Columbia. State governments, too, can be more assertive—for instance, by narrowing their contracts with the managed care companies that handle Medicaid plans, taking decisions about granting care out of their hands. In all, Kim argues that America needs more governance, not less.

Kim concludes that the privatization experiment of the past 40 years has failed. For decades the federal government’s antipoverty programs have enabled corporations to profit off the backs of the poor and the taxpayers who support them. Yet politics on both sides prevents improvement because it misses the real problem. Politicians, especially conservatives, focus their accountability on the recipients of the services (by ensuring that welfare recipients are working, for example) rather than on the people doling out those services. Liberals and progressives tend to throw more money into these programs rather than evaluating them, out of fear that such evaluations might result in budget cuts or more privatization. And so the process continues, with government programs benefiting the people who need government help the least. Transparency is the first big step, and in exposing the inner workings of these private industries profiting from public money, Kim’s book is an important move toward reform.

The post Poverty, Inc. appeared first on Washington Monthly.

Elaine Santiago lost her job in July 2020 after 23 years at one of the nation’s largest accounting firms. “It was a mass layoff,” she said. “ It was a shock.” Eight months later, Santiago hasn’t found a full-time position. She’s pulled together a collection of consulting gigs in marketing (what she had done for so many years) as well as publicity. She’s also substitute teaching at a public school near her home in New Jersey. “It’s been very difficult,” said Santiago, a single mom in her 50s.

Workers like Santiago will welcome the short-term help included in the $1.9 trillion pandemic relief bill that is all but certain to be signed this week by President Joe Biden. In addition to $1,400 stimulus checks for most Americans, the American Rescue Plan extends enhanced unemployment benefits, due to expire on March 14, and provides more than $40 billion for assistance with food, rent and mortgage payments. This vital package is an admirable first win for the Biden presidency.

But there’s an important omission in the plan: the lack of new investment in job training and career help for workers like Santiago. For millions of Americans whose jobs may never return, the Covid package is a balm, not a cure.

Earlier pandemic relief packages have included just $345 million on job training and other assistance for displaced workers, according to the House Committee on Education and Labor, compared to nearly $6 billion appropriated during the Great Recession. The American Rescue Plan provides no new money for job training and career services for unemployed Americans, despite the efforts of a group of Democrats led by House Education and Labor Committee Chairman Rep. Bobby Scott (D-Va.).

“So far the focus has only been on relief and not how to reconnect people to jobs,” said Annelies Goger, David M. Rubinstein Fellow at the Brookings Institution. “It’s very worrying.”

While the U.S. unemployment rate is seemingly in decline -from a peak of 14.8 percent in April to 6.2 percent in February – bad news lurks beneath these hopeful numbers. That’s because the official unemployment rate counts only those who are actively looking for work – not those who’ve dropped out of the labor force. The share of Americans participating in the workforce – 61.4 percent – is at its lowest since the mid-1970s, and among women, it’s at crisis^⁠ levels. Among the 10.0 million Americans who are officially unemployed – 4.1 million people have been out of work for longer than six months. Another 6.9 million people not actively looking for work say they want a job, while an additional 522,000 Americans are what the government calls “discouraged workers” who believe jobs aren’t available. Just 15 percent of unemployed Americans are “very optimistic” about finding a job soon, according to the Pew Research Center.

This exodus from the labor force is why the Federal Reserve says the “real” unemployment rate is closer to 10 percent. “We are still very far from a strong labor market whose benefits are broadly shared,” as Federal Reserve Chairman Jerome Powell said in February remarks to the Economic Club of New York.

Some might argue that jobs lost in sectors like hospitality, food service, and travel will rebound post-pandemic, but government estimates say otherwise. Job losses for as many as 3.5 million Americans are permanent^⁠, according to Bureau of Labor Statistics (BLS) data. Covid has also accelerated the trend toward automation, which means even more job loss, especially among lower-skilled positions that are particularly susceptible to mechanization. A recent World Economic Forum survey found that 43 percent of employers worldwide expect to reduce their workforce as they automate. By 2025, the study found, “85 million jobs may be displaced by a shift in the division of labour between humans and machines.”

Forward-thinking and resilient as Americans typically are, workers have already sensed these fundamental shifts in the job market. As many as 66 percent of unemployed Americans have “seriously considered” changing their careers, according to Pew, while a February 2020 survey by the SkillUp Coalition and the Charles Koch Foundation finds that more than half of workers under 40 believe they’ll need new skills. Ultimately, many Americans may find they have no choice. Even before the pandemic, Americans were switching jobs and careers at an accelerating pace. In 1983, nearly two-thirds of men in their 50s had worked for the same employer for 10 years; in 2018, that share was less than half. For all workers today, according to BLS, median job tenure is just 4.1 years.

Unfortunately, the federal government hasn’t kept up. The current federal workforce system dates to a time when many workers made their careers at a single employer and globalization had not yet caused mass disruption.

As a result, the government provides Americans with few resources for reinventing themselves effectively.

For one thing, federal training programs need streamlining and modernization. Anyone looking to take advantage of what’s available must navigate a welter of 43 separate programs run through a confusing patchwork of federal, state and local agencies. Federal “one-stop” job centers nominally bring these efforts together under one roof, but many programs, like Trade Adjustment Assistance (TAA), are narrowly targeted to specific sets of workers, limiting their reach and creating red tape. “There’s a lot of resources wasted trying to figure out who’s eligible for what,” said Brookings’ Goger. “When I talk to folks at job centers, people tell me they spend half their time on compliance.” In fiscal 2018, the Department of Labor reported that while 76,902 workers were eligible for TAA help, fewer than half actually received program benefits and services.

Workers also don’t have ready access to information about the kinds of jobs or educational opportunities they should pursue. “The data are out there, but it’s not very actionable,” says Marni Baker Stein, Provost and Chief Academic Officer at the online nonprofit Western Governors University, which caters largely to working adults. “What are the skills in demand? What credentials are in demand? What are the pathways to the skills and credentials to build a career, where are they located, and how do I find them?”

Affording training and education is another obstacle. While the federal government subsidizes job training for low-income adults and the limited numbers who qualify for programs like TAA, mid-career adults get no help. Elaine Santiago said that’s why she opted out of pursuing an online certificate program in nonprofit fundraising at Boston University. “I think it was about $1900 … it cost too much money,” she said.

Pell Grants for higher education are only available for students enrolled at least part-time and can’t be used for short-term training programs. Workers can also lose unemployment benefits if they enroll in school or training programs that don’t fit strict limitations. Virginia, for example, allows the receipt of benefits only if schooling “takes place during evening hours, only on weekends, or is self-directed.” While the purpose of requirements like these is to ensure that people make themselves available to work, it also means workers can’t afford to get skills that could lead to better jobs. The lack of options could be one reason that for-profit colleges are once again seeing surging enrollments, raising concerns of spiraling student debt.

If Biden wants a durable recovery, he’s going to have to get Americans displaced by the pandemic back to work. In the meantime, people like Elaine Santiago are hoping for a lucky break. “It gets pretty hard, and some days are really bad,” said Santiago, who says she’s applied to about 230 jobs so far. “But I’ve gotten these gigs so I consider myself one of the fortunate ones. There’s a lot of tough stories out there.”

The post What’s Missing from the American Rescue Plan appeared first on Washington Monthly.

The unemployment figures were released last Friday and the conversation about them focused on all the great news they contained. The economy added 223,000 jobs in May while unemployment dropped to 3.8 percent. There was even modestly good news on wages.

Since all Trump can talk about when it comes to the economy is jobs, jobs, jobs, both he and his enablers saw only good news.

223,000 jobs added in May, even the NYT runs out of words to describe how good the numbers are! pic.twitter.com/K1GB8G0zsf

— FOX & friends (@foxandfriends) June 2, 2018

Neil Irwin at the New York Times literally went to the thesaurus to look up new words for “good” to describe the economy.

So in an era of geopolitical risks and potential trade wars, the thing to take away from the May numbers is that the United States economy just keeps humming along at a steady pace, putting more people to work and at gradually higher wages.

It isn’t perfect — wage growth remains unexceptional despite its growth spurt in May, and the ratio of prime-age adults working remains below its historical levels.

But it has been a strikingly durable and steady expansion, which is what the nation needed after the scars of the 2008 recession. And that’s just plain “good.”

But whether it is Trump trying to take credit for low unemployment or pundits trying to come up with words for how great the economy is doing, they are all missing the crisis that is already hitting some areas of the country and could be coming soon to a state near you. Here is how they’re talking about things out here in the so-called “heartland” of Minnesota:

There is a critical shortage of skilled workers in the Twin Cities region, according to Achieve Mpls…By 2020, the region will see a shortfall of more than 60,000 workers, according to Achieve Mpls, and over the next decade there will be about 500,000 jobs waiting to be filled.

Think for a moment about what a shortage of 500,000 workers will do in a state whose population is only 5.3 million. On the plus side, that should lead to higher wages. But if the supply of workers dries up, that will definitely put the economy in crisis.

At this point, there are a host of policies that a forward-looking government would be exploring to deal with this impending crisis, almost none of which is on the table with Republicans in charge of congress and Trump in the White House. First and foremost, we should be looking at ways to expand immigration and provide a pathway to citizenship for undocumented immigrants. Raising the minimum wage would further boost paychecks, bringing any so-called “discouraged” workers back into the labor pool. Matching education and training to the jobs that are available should also be a priority, as well as ensuring that discrimination based on race, gender and age is not an impediment to education or a job. Finally, ensuring a healthy workforce via access to affordable health care is a must.

Following the Great Recession, there was a need for an emphasis on jobs. If we haven’t already reached the end of that road, we’re coming close. Our economy could be in trouble very soon if we don’t start paying attention to wages and workers. As baby boomers continue to retire, demographics alone are going to be a problem. But the policies of our current government are only making things worse.

The post To Avoid the Next Economic Crisis, It’s Time to Pay Attention to Workers appeared first on Washington Monthly.