Was This Program Necessary? Part 1

Today's post is based on an AP report from earlier today concerning an Administration's program to find jobs for teenagers this past summer. Now, I do not go out of my way finding programs that waste taxpayer money, most of the time they just show up and this program is no exception. First, some descriptions of the program:

• "The summer program was basically half-disaster. It was too little, too late and too poorly constructed to have any lasting effect on our youngest workers." - Andrew Sum, director of the Center For Labor Market Studies At Northeastern University.
• "Things are still totally chaotic with this program. In many communities they will tell you that they are still struggling to understand where the money is and where it is coming from." - Rachel Gragg, federal policy director for the Workforce Alliance.
• "There are so many passthroughs before this program actually turns into money that helps the population its intended to help that it's almost criminal." - Laura Chick, California Inspector General to oversee stimulus funds.
• AP reporting: in Pennsylvania and Connecticut some kids did not get into the program's training classes until July, reducing their chance to get a summer job.
• AP reporting: some youths who got jobs had trouble collecting their paychecks.
• AP reporting: California auditors found irregularities that included over payments to it's director and $1.27 million in questionable costs that have not been accounted for.

So let's review: we have a government program that is either late in being delivered or is delivered in a "half disaster" manner. Money is lost or misappropriated or delivered inefficiently. Have we heard this story before? This is how the government wasted away a lot of the $1.2 billion that funded the program. It gets even better if you do the math of the program:

• The article states that 25% of the 279,169 kids in the program did not get a position, meaning that about 209,377 did get a job.
• Let's assume that each of the kids that found employment got paid at $8.00 per hour and worked forty hours a week for the ten weeks of summer (probably a generous assumption since we know from above that in some places the program did not get underway until July).
• Thus, the youths who found work got ($8.00 per hour times 10 weeks times 40 hours a week times 209,377 kids) = $670,006,400 in wages.
• In conclusion, the Federal government spent $1.2 billion to generate about $670 million in wages. Not a very efficient program. Each kid would have had to get a job paying $14 an hour (not going to happen for a summer job) to even break even for the program.

According to the article, the Labor department acknowledged it is still working out the kinks, and says even if not all participants got jobs, the program helped youth build valuable professional skills that will serve them and the national economy. However, there is no firm measurement or definition for even this soft metric.

Just like the Cash For Clunkers program, the Federal government and the political class cannot even execute a simple job training program that is at least revenue/expense neutral. Bad procedures, bad accounting, bad scheduling, bad results, how can we expect them to execute major programs like health care reform, Social Security reform, education reform, etc? As we point out extensively in "Love My Country, Loathe My Government", the Federal government has to be downsized significantly in order to focus on a very small number of programs and return the wasted tax dollars back to the American citizen. If Americans could keep far more of their wealth that the government wastes on program such as this, they would likely spend it and expand the economy much more efficiently, resulting in more jobs for youths than any government program could do.

Tommorrow: Part Two of let's do the math.