Intergovernmental Relations in Employment Policy: The United States Experience

Abstract

Policies to regulate and support labor markets in the United States have mainly been an initiative of the federal government. Historically, states and localities were reluctant to act independently to build up worker rights and protections for fear of competitively disadvantaging resident industries with added costs. Federal constitutional authority to raise revenue and control commerce among the states governed development of labor market policy in the United States. Labor market support initiatives usually have been forged in difficult economic times with contributions and compromise from the full political spectrum. This paper examines the development of employment policy in the twentieth century by viewing the interplay of federal, state, and local partners. The programs considered include unemployment insurance, training, youth programs, and the employment service. Some attention is also given to governmental policy that influences the geographic mobility of labor. Intergovernmental relations in labor market policy have resulted in a system that performs a wide variety of functions, varies greatly at the local and state levels, but maintains important federal standards nationwide.

Has the Great Recession Raised U.S. Structural Unemployment?

“…Other welcome measures also were taken as part of the American Recovery and Reinvestment Act (ARRA) enacted in February 2009 including doubling the amount of money available to train and retrain workers, mostly through programs under the Workforce Investment Act 30 and providing enhancements to the Trade Adjustment Assistance (TAA) program. 31,32 Evidence suggests that employment services and job search assistance can be cost-effective in helping the unemployed find a job and can raise earnings at least in the short run (Meyer, 1995;and O'Leary and Straits, 2004). The economic returns to further education and training are also high (Jacobson, LaLonde, and Sullivan, 2005), since they could generate more efficient matching between job vacancies and unemployed workers through adjustments in job-seekers' skills-a key aspect given the ongoing reallocation of production factors across sectors in the United States.…”

Labor Exchange Performance Measurement

“…Legislation authorizing employment and training initiatives nearly always include both a requirement for program evaluation and a sunset clause (O'Leary and Straits 2003). Employment policy makers at all levels of government have an interest in knowing "what works."…”

Lessons from the American federal‐state unemployment insurance system for a European unemployment benefits system

“…There are five main goals for the federal‐state UI system (O’Leary and Straits, ): To provide temporary partial wage replacement during involuntary unemployment. To prevent dispersal of employers’ workforces during temporary layoffs. To promote rapid return to work. To limit business downturns by maintaining aggregate purchasing power. To encourage stabilization of employment in enterprises through experience rating. …”