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Report: Idaho Workforce Development Fund shows 40 percent ‘effectiveness’ results

Report: Idaho Workforce Development Fund shows 40 percent ‘effectiveness’ results

Idaho Freedom Foundation staff
October 31, 2012

After 16 years and more than $62 million in dollars spent, the Idaho Department of Labor is reporting a 40 percent “effectiveness” rate for a statewide job training program.

Created by the Legislature in 1996, the Idaho Workforce Development Fund is overseen by the Department of Labor and was re-authorized in 2010. The fund is financed with a 3 percent offset paid by Idaho businesses to the state unemployment insurance fund, according to the department.

The training fund is overseen by a 32-member council, a statewide task force comprised of individuals from both the public and private sector who are appointed by the governor.

One of council members is Rian Van Leuven of the Idaho AFL-CIO. “The construction industry is not a shining star in the report; however, it would not be when you look at the timing of the recession and the timing of the investments.” Van Leuven added that “we need to continue to insist on the accountability of the program and ensure that every dollar spent is done wisely.”

Dr. Linda Clark, superintendent of the Meridian School District and member of the council, told Idaho Reporter.com that “the report will be reviewed at the next council meeting in November” and declined further comment.

Council member Gerald Beck, president of the College of Southern Idaho in Twin Falls, said “the report does not read well, and is very disappointing. It certainly does not reflect the success that we’ve had with the training program here in our region.” Beck says that the training program is directly responsible for job creation at Magic Valley employers Chobani Yogurt, C3 Management and Dot Foods.

Companies that market their goods or services outside their respective regions of Idaho are eligible to apply for the funds, and then are reimbursed for the expense of training new employees as long as the positions for which they are hiring pay a minimum of $12 per hour and provide employer-subsidized health benefits.

Analyzing the program between the years 2000 and 2009, and applying the labor department’s own “performance index,” a report on the program indicates that “the effectiveness of the fund was mixed over the decade analyzed.”

The program had 160 contracts with employers in effect during the decade analyzed. The report shows that 63 of those contracts—or 40 percent of the total—were deemed “effective,” while 52 of the contracts—or 33 percent of the total—were deemed “ineffective.”

According to the labor department findings, call centers, which employed almost half of the 17,700 trained workers analyzed, showed mixed results. Training provided in financial and information services, which employed about 1,900 of the workers trained, proved effective, according to the report, while training in construction and agriculture —which accounted for about 200 workers—did not.

Scores for the remaining 45 contracts were inconclusive regarding the effectiveness of the program.

In a press release announcing the results of assessment, Roger Madsen labor department director, praised the training program. “It’s been one of Idaho’s most valuable economic development incentives for more than a decade,” he said. Madsen also noted the assessment’s findings that employees who had received the taxpayer-funded job training saw their wages increase more quickly than workers who did not receive the training.

Idaho Reporter.com contacted the department of labor for further comment about the report. When asked if a 40 percent effectiveness rate was to be regarded as a success, given the program’s multi-million dollar price tag, department spokesperson Bob Fick stated that “We have nothing to say about that. The report is what it is, and Director Madsen’s comments are what they are. There’s nothing more to discuss.”

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