The Ryan Budget Will Impact Worker Skills and Job Growth

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By Neil Bomberg, Program Director

Last week, the House of Representatives passed Chairman Ryan’s budget resolution.  Though it has no chance of passing by the Senate, it will have an impact on the way in which the House allocates funds to various line items in the appropriations process.  My view is, and this is a view shared by many who are much smarter than I, that if the Ryan budget became law that the doors to our nation’s federal job training system would be shut, and a significant amount of Pell Grant funding would be eliminated.   Millions of Americans would be denied access to the skills and credentials training and job placement assistance they need to succeed in today’s labor market.  In addition, it would stifle the ability of U.S. businesses to find the skilled workers they need to take advantage of new markets and emerging economic opportunities, putting our nation at a competitive disadvantage at a time when other countries are increasing their investments in developing their human capital.

But that is not all.  The Economic Policy Institute (EPI) argues that Paul Ryan’s latest budget would not only cut funding for important domestic programs like the Workforce Investment Act (WIA) and Pell, would not only aggressively slow job growth, but actually would eliminate jobs – millions of them.

According to EPI, the magnitude of the Ryan budget cuts would suck demand out of the economy when it most needs it, just as it is returning from the single greatest financial meltdown since the Great Depression.  Moreover, EPI concludes that by simply using a “standard macroeconomic model that is consistent with that used by private- and public-sector forecasters, the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs over two years.”

While the National League of Cities (NLC) recognizes the challenging fiscal environment faced by lawmakers, NLC also believes that the United States simply cannot afford to make additional cuts to these important education and training programs.  Without access to these programs, millions of Americans will go without the skills training and credentials they need to enter the world of work.  They will be unable to compete in the current labor market.  Worst, they will remain unemployed or work in low wage jobs that will further contribute to their economic isolation.

To avoid this, NLC is calling on Congress to take several proactive steps.  The first is, within the constraints established by the Budget Control Act of 2011, continue to invest in programs that provide job training and educational assistance.  The second is to reform and modernize the Workforce Investment Act and the nation’s education laws so that they reflect the education and training outcomes that will be demanded over the next decade.  Without this level of support, the United States will not be able to continue to compete internationally and grow economically, and it will find itself falling behind.