A Rocky Road to Shuttering of Americas Job Bank

By Ed Frauenheim

Jun. 4, 2007

To some critics, the Labor Department made a smooth shift away from America’s Job Bank all but impossible in its initial decision to shutter the free government job site.

    According to this view, given such factors as high job insecurity and an already weak economic safety net for workers as well as business concern about finding the right talent efficiently and effectively, closing America’s Job Bank amounts to a misguided move.

    AJB has not been a particularly expensive program, considering the scale of federal budgets. The cost of operating AJB has been as high as $27 million per year, the Labor Department said in a memo last year, “with a current operating budget for maintenance-only of $12 million per year.” The Labor Department’s discretionary funding for 2006 totaled $11.3 billion.

    Robert Reich, the former U.S. Labor Department secretary who helped establish AJB, is among those disturbed at the site’s demise. “Private-sector job banks are doing a good job and meeting an important need, but they can’t replace a free service on such a very large scale, which is available to all employers and job seekers free of charge,” Reich said in an e-mail interview. “It seems to me that the social benefits of efficiently and quickly matching employers and job seekers far exceed the government costs of providing this service.”

    Not so, says the Labor Department.

    “There is no evidence that AJB created an economic efficiency and quickly matched employers and job seekers. The private sector provides this service more efficiently, more effectively and in a more customer friendly manner,” the Department said in a statement. “Low-income workers who access electronic labor exchange services in One-Stop Career Centers are being directed to either state or private job sites in large measure, so even the publicly funded system recognizes the limited utility of AJB.”

    How well states, employers and job seekers manage in the days and months after the AJB’s June 30 closure will go a long way to determining whether people think retiring the job bank was the right thing to do.

    Bonnie Elsey, director of workforce services in Minnesota’s Department of Employment and Economic Development, is reserving judgment. She can imagine the private sector picking up AJB’s slack just fine, with market competition forcing would-be successors to keep their technology current. Echoing a Labor Department point, Elsey also says job seekers already must go to other sites besides AJB to get a comprehensive picture of the available job listings.

    But when asked if it is wise, therefore, to close America’s Job Bank, she hesitates.

    “I won’t be able to tell you a true answer to that until we see if the new partnership with the private sector works.”

Ed Frauenheim is a former Associate Editorial Director at Human Capital Media and currently works as Senior Director of Content at Great Place to Work. He is a co-author of A Great Place to Work For All.

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