Structural Unemployment and Job Training

Today’s Wall Street Journal contained a page one article about the uses to which ex-auto workers are putting their buyout money from the Big Three auto makers.  Workers cite the exciting atmostphere of healthcare and the earning potential as reasons to move into healthcare.  Says the article “[Detroit automakers GM, Chrysler, and Ford] are holding up [worker buyouts of $100k or more and education grants] as an example of socially responsible cost-cutting…”

This is an intereseting phenomenon, and if it really works, I hope it motivates other corporations and the federal government to take similar approaches to sources of structural unemployment.  For every surplus of labor in one sector in America, there is always a shortage in some other sector.  Healthcare in general and nursing in particular are examples of the latter; other areas include IT, CIS, biotechnology, etc. etc. etc., and the shortages are not necessarily the result of lack of interest – people, I think, are genuinely aware of the possibilities of employment, but they are unable to take advantage of the opportunities because they can not afford the requisite education. 

I would like to see the government take a similar approach to farming.  The recent (bad) decision by Congress to spend millions on subsidies for developing the ethanol industry rather than importing it from (for instance) Brazil is a perfect example of money that would be better spent offering individual farmers the option of placing themselves or their children in an education program of their choice, instead.  Higher prices on everything from corn to cucumbers at the grocery store evidences that that massive ethanol subsidies could have a profound, negative effect on consumer spending, and such a shift would ripple throughout the economy.  Instead of keeping farmers artificially afloat, why not offer up education grants to farming households?  Though farming may be an honorable trade, that does not mean that farmers should not be offered the opportunity to exit the industry.  This would reduce supply, increasing prices, while reducing the need for government subsidies.  It is certaily political suicide for any midwest farmer to suggest removing these subsidies without any sort of fallback; it remains to be seen if a billion dollars shifted away from farming subsidies to technical and higher education grants would attract the ire or admiration of voting farmers.  Certainly the ex-auto workers seem happier.   


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