Fiddling with education while labor burns

If you’ve found yourself mistaking U.S. Secretary of Labor Thomas Perez for Education Secretary Arne Duncan recently, you’re not alone.

Perez is spending more and more time these days helping the Obama Administration secure its shaky education legacy. That’s not likely to go well for education or for labor.

Earlier this month, Perez teamed up with Duncan to announce the formation of the Registered Apprenticeship — College Consortium, a program aimed at creating apprenticeship programs that allow blue-collar trainees to attain college degrees at the same time.

On the same day, the two agencies announced that 24 districts won $107 million in funding from Youth CareerConnect, a competitive grant program similar to the administration’s Race to the Top initiative, funded from Labor Department coffers.

A day later, Perez was chatting about education at a confab held by National Journal on the impact of education on the nation’s labor markets. Perez declared that schools and workforce training is critical to getting the nation out of the economic doldrums. “We can’t train and pray anymore. Everything we do must be industry-driven,” Perez proclaimed.

Certainly, America’s woeful public schools are a long-term drain on the nation’s economy. Eleven percent of high school dropouts aged 25 and older were unemployed on a seasonally-adjusted basis last year, according to the U.S. Bureau of Labor Statistics. That’s nearly double the unemployment rate for high school graduates with some form of college education.

Twenty-six percent of dropouts age 16-to-24 are out of work on a not seasonally adjusted basis – and unable to qualify for high-paying blue-collar jobs in auto factories (which require employees to have at least 60 hours of college credit), or high-paying blue-collar jobs, which require high-level math skills such as trigonometry.

One can question whether the federal government should play any role in education. But neither Democrats nor Republicans on Capitol Hill are willing to eliminate the $74 billion doled out annually by the federal government to public schools. At the very least, the federal government should hold states accountable for how they use the money to improve student achievement, encourage various commonsense improvements, and overhaul failing districts.

For President Barack Obama, this is more about securing its mixed legacy on education policy, one of the few areas in which the administration has won occasional bipartisan accolades. Perez, with the Department of Labor’s pot of money, has become an important player in that effort.

Immediately after taking office in 2009, the Obama Administration embraced the education reform mantle of predecessors such as Ronald Reagan and George W. Bush. Thanks to $4.3 billion in cash from the American Recovery and Reinvestment Act, Obama launched Race to the Top, a competitive grant program that rewarded states for passing laws a series of reform laws, including allowing for the growth of charter schools.

The early success of Race to the Top – including the addition of 1,091 new charter schools between 2010 and 2013 – gave the administration a rare political victory during its first term.

But by last year, the Obama Administration’s education agenda was on the ropes. The administration’s decision to grant waivers allowing 42 states and the District of Columbia to ignore the No Child Left Behind Act has quagmired. The administration granted waivers to states such as Washington State, which then failed to implement their half-baked reform measures because of opposition from the teachers unions.

Meanwhile the administration’s competitive grant approach to education funding faced a backlash from both Obama’s fellow Democrats and Republicans. They would rather have federal subsidies doled out the old fashioned way to the school districts they represent back at home.

House Education and the Workforce Committee Chairman John Kline (R) has been particularly critical of the administration for its unwillingness to increase funding for special education programs, which benefit the school systems in his Minnesota district.

With almost no support for funding additional rounds of Race to the Top, and having squandered its early successes, the Obama Administration is now desperate to cement its legacy on education policy.

This is where Perez comes in. The administration can use job creation as a justification for spending some of the Labor Department’s budget on funding its education priorities. Because Perez, unlike Duncan, is relatively unknown to teachers unions and the rest of the public, he can serve as the administration’s new, fresh, public face.

The first move came last November when Perez and Duncan came together to announce Youth CareerConnect, focused on revamping high schools. This was modeled after a proposed round of Race to the Top that had been rejected by congressional Democrats and Republicans. While Perez technically operates the program and funds it out of Labor’s budget, it is, for all intents and purposes, Duncan’s program.

A month later, Perez and Duncan toured a community college in Michigan where they talked about the importance of education and workforce training programs.

Perez then took a starring role in February when Obama announced during his State of the Union Address that the administration was forming a task force on fixing workforce training programs and expanding the nation’s community colleges. The committee is chaired by Vice President Joe Biden, but Perez and his agency effectively run the show.

As Perez helps shore up Obama’s legacy, he is ignoring what ought to be his real job: making organized labor address the consequences being borne by workers of the union bosses’ financial fecklessness.

Retirees and workers in union-dominated fields find themselves struggling with health insurance coverage thanks to woefully-underfunded Voluntary Employee Benefit Associations (or VEBAs) managed by unions such as the United Auto Workers and the NEA that provide health and disability insurance coverage to workers in old-school industries and in school districts.

Thanks to financial mismanagement by both unions and companies, along with Obamacare, many VEBAs are busted in all but name. The UAW-run insurance trust for current and future GM retirees is underfunded to the tune of $15 billion according to its latest Labor Department filing.

Unions and their VEBAS are not required to obey the kind of financial disclosure rules that publicly-held companies are required to follow. Teachers and school districts in Indiana learned this the hard way four years ago when the NEA had to take control of the Indiana State Teachers Association after the union’s VEBA mismanagement made it insolvent.

Perez could be addressing such problems as shaky VEBAs and the slow-rolling union pension crisis. Instead, he’s doing the circuit to shore up Obama’s legacy as an education reformer. It won’t end well.