Tuesday, March 8, 2011

Violating Conventional Wisdom: Cutting Education, Training and Financial Stability Programs is Wrong

The February Bureau of Labor Statistics employment report contained some very good news. Over 200,000 private sector jobs were added and over the last 12 months, 1.5 million private sector jobs were created.

But, we must temper our positive reaction. The 1.5 million translates into a monthly average of 127,000, still below the 150,000 that’s needed to increase high school graduate, youth, and minority employment.

The report showed the consequences of the sustained, but modest growth. The college graduate unemployment rate fell because they obtained jobs. The high school graduate jobless rate fell too, but due to labor force exit. Further, earnings barely kept pace with inflation.

With these bifurcated outcomes, now is not the time to cut funds for education and training programs. Now is not the time to cut funds for Volunteer Income Tax Assistance Programs (VITA). VITA programs:

• Ensure financial stability. They maximize the use of tax code benefits and incentives, such as the Earned Income Tax Credit and Child Tax Credit.

• Help people create bank accounts and save a portion of their refund to pay for necessities.

• Provide an alternative to predatory tax preparers. Clients receive 100% of their tax refunds.

Yes, the federal budget needs trimming, but cutting education, training, and VITA programs violates a basic rule of thumb. You don’t cut funding that helps Americans achieve financial stability, especially so soon after the “Great Recession”, and when uncertainty remains that the economy can sustain itself without stimulus.