Employer power and employee skills: understanding workforce training programs in the context of labor market power

As the [Coronavirus Disease 2019] COVID-19 recession continues and the pandemic worsens, millions of people have lost their jobs and are at risk of long-term unemployment. Policymakers and practitioners looking for strategies to address long-term unemployment are turning to workforce training and development programs to help workers rebuild their skills. Yet training programs that focus on skills learning without addressing underlying labor market power dynamics between employers and workers can perpetuate existing inequalities. This report examines the idea that a 'skills gap' drives inequality and that, by extension, training can narrow economic inequality. The conclusion is that inequality is better explained by increasing labor market monopsony. To be effective at narrowing inequality, training programs must address concentrated corporate power. The authors suggest that sectoral training programs that are co-governed by unions, and include worker voice in program design, demonstrate greater long-term success than more traditional training programs. By investing in programs such as these, we can begin to grow worker power while helping workers develop new skills.

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