“Green Jobs” Stimulus Program Falls Short of Expectations

June 1, 2012
By

MIXED RESULTS: In the case of one stimulus funded program, "Of the 14 people placed in unsubsidized training-related employment...1 person remains employed."

DENVER – A Department of Labor (DOL) green jobs program that gave $3.6 million to a local community organization in Denver to provide training for disadvantaged individuals produced approximately 200 jobs over the course of the two year program.

Mi Casa Resource Center, located in Northeast Denver, landed the DOL grant as part of the American Recovery and Reinvestment Act of 2009. Part of the “Pathways out of Poverty” training grants, the DOL program included other training outlays totaling $435.4 million. The Pathways recipients were awarded $147.7 million. The overall green jobs portion of the stimulus package came in at approximately $500 million.

Mi Casa’s efforts, dubbed the “Denver Green Jobs Initiative” (DGJI)  proposed serving at least 500 individuals, with 400 of those participants completing training in the green jobs and renewable energy sector. DGJI calculated an employment entry threshold of 270 placements, with at least 50 of those jobs training-related.

Emily Templin Lesh of the Colorado Department of Labor and Employment described in a 2010 compilation of green jobs training grants awarded in Colorado the intended “target population” of the technical apprenticeship and training program: “Focus on Denver’s 5 Points Neighborhood: Unemployed individuals, high school dropouts, individuals with a criminal record, women, and minorities.”

Mi Casa paired with the Environmental Defense Fund to produce an award-winning video touting their program. It includes comments from Colorado Governor John Hickenlooper praising the program’s goals and the need to engage the populations targeted by the outreach:

“Green jobs training programs, like the one offered through Mi Casa, they’re win-win. These programs improve the environment by encouraging efficiency. At the same time they’re strengthening our economy and taking deserving people who have lost their jobs one way or another, been disadvantaged, and allowing them to get back to work. It’s a win-win,” said Hickenlooper in the video.

“Mi Casa’s mission is to advance the economic success of Latino families, and of course Mi Casa works with more than just Latino families. We work with other disadvantaged populations as well,” Christine Marquez-Hudson explained.

The program, which officially ended in January but had already begun to wrap up in the third quarter of 2011 trained a total of 513 individuals and placed 206 in full-time employment, or 40.1 percent, according to the Mi Casa blog in February 2012.

“DGJI trained 513 workers, and of these, 206 were placed in full-time jobs. The project was recognized by the U.S. Department of Labor as one of the most successful in 2010-11 for job-placement. As a result, DGJI program strategies were included in DOL’s ‘Promising Practices’ resource guide for workforce development.

‘There is a gap between the skills employers need and the skills most workers have,’ says DGJI Project Manager Rick Lawton. ‘Denver Green Jobs Initiative was able to bridge that divide for individuals who face barriers to employment.’”

DGJI expended $17,637 per participant as calculated by participants placed (206) out of the total $3,633,195 grant, including expenditures incurred on upgrading the facilities, training materials and resources, and jobs training and support staff. In the eight reporting periods examined, Mi Casa reported a maximum of 27 jobs created as part of the initiative, outside of the training placement figures.

“Though the green industry has not yet produced the volume of jobs once hoped for, DGJI was a huge success!” Mi Casa’s blog post declared.

The overall green jobs program authorized by the Labor Department and funded through the stimulus, however, was not.

In a scathing September 2011 audit issued by DOL’s Office of Inspector General (OIG), the report concludes with the recommendation that the remaining funds allocated for the program be “recouped as soon as practicable.”

Due to a combination of a slow pace of green job-related placement and the clear inability of the program to reach any of its training related goals including the number of individuals served—the largest and most easily attainable benchmark—as well as the final measure, employment retention, the OIG declared that the green jobs training efforts had attained only “limited performance targets.”

Proposed vs Reported 2Q 2011

Through the second quarter of 2011, the time covered by the OIG report, grantees reported that only 52,762 individuals had been served, just 42 percent. Moreover, a mere 8,035 of participants trained had entered employment, or just 10 percent of the goal of 79,854.

The most dismal performance was observed in the category of employment retention, with just 1,336 participants who had entered employment through the green jobs initiative reporting a six-month retention rate. That figure represented just two percent of the stated goal of 69,717. (see Figure 1)

For the Pathways program, just 360 of 10,442 employees had reached a two-quarter retention threshold, or just three percent, over the same time period.

Training Grants 2Q 2011

Mi Casa and DGJI had encountered similar difficulties, as expressed in their report from Q4 of 2010. After placing 14 participants into training-related in the third quarter of 2010 (and a total of 23 through the first three quarters), only one person remained employed by the next quarter ending December 31, 2010:

“Of the 14 people placed in unsubsidized training-related employment in the 3rd quarter, 1 person remains employed in the first quarter following initial placement.” [emphasis added]

By the middle of 2011, Mi Casa reported:

TOTAL JOB PLACEMENTS THROUGH JUNE 30, 2011: 133 individuals placed; 121 of 133 placements were training-related placements; 48 individuals met 1st quarter retention; 15 individuals met 2nd quarter retention.

Nearly 64 percent of participants failed to make it through at least one quarter of retention, and a staggering 89 percent had not remained in employment after just six months. The OIG report, which lists Mi Casa, shows a slightly different employee retention figure of 20, or just 14 percent of the 139 participants it counted.
Mi Casa 2Q 2011

“That is not satisfactory for us,” said Kate Brenton, spokeswoman for Mi Casa. “We consistently meet a placement rate closer to 75 percent.”

“There is no doubt the Denver Green Jobs Initiative brought a benefit to those 700 individuals,” Brenton said, but lamented, “clearly there are aspects of it that were disappointing to us.”

“I think the focus on green jobs was, indeed, limiting,” said Brenton. The green industry failed to produce the number of green job opportunities that many, including DGJI, were expecting, according to Brenton. On the supply side, Brenton noted a lack of public policy support for renewable energy and efficiency programs as well as green construction projects. On the demand side, inadequate incentives for homeowners to consider switching to renewable energy and a lack of capital for small businesses to expand and provide jobs also stymied DGJI placement efforts.

“We felt that challenge acutely without the strong cooperation of employer partners” in the green jobs sector, said Brenton.

Moreover, many of the individuals served by Mi Casa through DGJI faced “significant barriers to employment” that included poverty and felony convictions for more than 70 percent of trainees. Given a competitive job market and a glut of capable workers displaced by the economic downturn, participants with a criminal record had a much more difficult time finding jobs once they completed their courses, Brenton said.

“It was something we struggled with.”

In contrast to other Pathways programs that failed to reach critical grant benchmarks, Brenton pointed to the organization’s long history–since 1976–and a history of providing workforce development to launch disadvantaged community members into a meaningful career path as reason for the relative success of the green jobs project.

“It’s our bread and butter.”

One final critical element—retention—plagued many of the Pathways recipients, including those who met training and placement benchmarks.

Brenton admitted that quantifying retention rates for a program like DGJI is inherently “tricky.”

Tracking training graduates once they’ve been placed with an employer can be difficult, according to Brenton. In some cases, Mi Casa is simply unable to contact individuals at the benchmark periods measured: three, six, and 12 months. For DGJI, the limited time frame of less than two years—once the training program began running in the second half of 2010—only exacerbated the difficulty of keeping tabs on those placed through the federal grant. Staff members funded by the grant were unable to check in with participants in the post-program period, Brenton said.

Mi Casa’s retention rate for non-DGJI programs is approximately 70 percent after three months, roughly 60 percent at six months, and 45 percent after 12 months, Brenton estimated.

Brenton remained skeptical of some of the figures found on Recovery.gov, suggesting that some of the reported numbers might be “inaccurate.” Brenton, however, confirmed the number of those trained and placed found on Mi Casa’s blog.

Some of the job placement retention confusion, she added, could also be attributed to successful, but temporary, employment that could vary from week to week and quarter to quarter.

In its final analysis, the OIG concluded its report with the acknowledgement that the $500 million green jobs training effort had clearly not lived up to the promises made by the grantees in many instances.

“With no evidence to support grantees were on target to meet outcomes, grantees may not assist those most impacted by the recession and achieve performance outcomes such as placements within the time limits set by grant agreements,” the report said.

The report’s announcement drew heat at the time from House Republicans, including Rep. Darrell Issa (R-CA), chair of the House Oversight Committee, who criticized the jobs training program.

The Labor Department’s Employment and Training Administration disagreed with the OIG findings, stating that it had initiated “appropriate measures to monitor progress and provide technical assistance to help ensure ultimate grant success for those grantees that may be at-risk of not delivering all of their outcomes.” Those funds, according to the ETA had already been “obligated” and would be “expended by September 30, 2013.”

The full OIG report:

greenjobs_gw_03

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