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Jim Stergios

Create work with on-the-job training

The value of work cannot be overstated. If you love what you’re doing — great. If you don’t, studies demonstrate that even mundane jobs carry broad psychic and material benefits.

Work begets self-reliance and dignity. It provides resources to live, engage with society, and establish an identity. It stabilizes families. It makes social and economic mobility possible.

Yet public policy often ignores the value of work, and discounts the harmful physical and mental impacts of the lack of work. Massachusetts’ just-passed increase in the earned income tax credit is a welcome exception: It will help people stay in the workplace, acquiring experience and skills, and, unlike a minimum wage hike, it won’t decrease the number of jobs available.


But the debate over unemployment insurance — a lifeline for the jobless — brings us back to the same predictable patterns. Attempts at reform get lost in the seesaw of partisan morality tales. The left focuses on the immediate risks to those impacted by lost income, and calls for higher benefits.

The right argues that overly generous benefits discourage returning to work. Massachusetts benefits are too easy to get (eligibility starts after holding a job for 15 weeks versus 20 weeks in most states) and last for 30 weeks (most states end benefits after 26 weeks).

Both sides make good points, but the debate has the feel of a Nietzschean torture chamber of eternal returns. Little ever changes. Meanwhile, thousands of available jobs remain vacant, even in high unemployment areas.

While recipients appreciate financial help, unemployment insurance falls short in addressing their isolation during transition. And despite efforts to make benefits contingent on ongoing job searches, unemployment insurance is hardly an efficient way to redirect people to jobs.

Michael Munday, a Newburyport-based CEO, has puzzled over this issue. His line of business is precision metal machining, and when an order comes in, he needs to ramp up production quickly. Often he can’t find trained people, so he turns down business and eschews capital purchases.


Current workforce development programs don’t train for all of the skills his jobs require. If he directs a job candidate to a training program, the person may not complete the class. But the largest barrier to matching a job with a candidate is timing. Speed to market is crucial; an employer like Munday can’t wait three to nine months, the length of a traditional training program, to fill openings.

So instead of having career centers and workforce investment boards steer the unemployed to training programs, Munday suggests that they steer people directly to work — through on-the-job training.

With on-the-job training, employers could fill open positions in close to real time. They would train candidates for the range of skills needed for specific jobs. And Munday suggests that these programs would not require new funding, just a change in how current funds are spent. Unemployment insurance beneficiaries would be given the option to receive, in lieu of traditional benefits, a voucher worth 50 percent of their unemployment insurance payments to use for on-the-job training.

A voucher-accepting employer would have to hire the candidate immediately, taking the individual off the unemployment rolls. When the employee finished training, the employer would pay full wage and benefits, with no more voucher support. And the employer would have an incentive to keep a new worker on the payroll: Unemployment insurance premiums would rise if employees were let go.


On-the-job training might not fit every industry, but it would begin to address the yawning mismatch between the skills of the unemployed and the needs of regional employers. State policy makers should be looking for ways to keep people at work — and turning to employers for fresh ideas.

Jim Stergios is executive director of Pioneer Institute, a Boston-based think tank.


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