Retraining Workers for Productive
By: Rita Phetmixay
What are the salient
workers losing jobs in
Pillowtex Worker Demographics
•40-50 percent of unemployed workers had not completed high school
•Mean age of those unemployed:46 years old
•Average tenure at Pillowtex: 17 years
•93 percent could not afford health insurance
• 59% female, 41 % male
• Approximately 500 non English speaking; predominately Hispanic
• Weekly wages ranged from $220 to $1140, averaging $458
• Unemployment benefits range from $73 to$408, averaging $275 weekly
• Difference of UI benefits and prior wages $178 weekly
• 42% have a relative who also worked at Pillowtex
• 73% interested in Community College offerings
• 30% willingness to consider relocation: 70% unwillingness
• Average indebtedness, excluding mortgages, ranged by age groups from $1,900 to $ 9,070
• By the first week of August, 43% reported being behind in rent or mortgage payments with over
10% receiving eviction/foreclosure notices
• 93% indicated they couldn’t afford/get health insurance
• 73% were concerned about getting prescriptions: average cost $209
At a more qualitative and psychological level,
the Centralina Workforce Development Board
observed that many Pillowtex workers:
• Had a reluctance/inability to confront reality and consider life options.
• Were intimidated by the idea of returning to the classroom and did not take
initiative to seek training.
• Were not eager to attend school.
• Had little or no computer skills, rendering them ineffective in a job search
In recent years the textile industry as a whole had faced:
•changes in automation and technology
•new supply chain issues and vigorous price competition.
Management mistakes, including:
•excessive debt leverage
•mismanaged systems and poor inventory control
~made the finances of many firms problematic.
Trade policy, which liberalized commerce in textiles, facilitated vigorous price
competition from global producers with lower costs of production.
All of this combined to characterize an industry in trouble.
In some cases…
Many workers who have lost their jobs are older and
had spent their lives working in one industry. In need
of a job right away, many pick relatively short training
programs, which often have marginal benefits.
Workers trying to pick a new field cannot predict the future of
the labor market, especially in a time of economic mayhem.
Technology is what drives the American factory today.
Advanced manufacturing becomes more widely used
-extensive use of computers,
high-precision and information technologies—and pushing the need for a
While community and technical college programs can produce the kind of
graduates industry needs to fill these positions, they currently face challenges.
Those challenges include:
•Tight operating budgets;
•Little public knowledge about careers in manufacturing or the careers
are considered undesirable;
•Inadequate math and science backgrounds of students enrolled in community colleges.
Differences Between Older and Younger
Displaced Workers’ Characteristics
Older displaced workers are:
•More skilled (thus, have different incentives to
invest in new skills)
•More labor market experience This evidence on skill is consistent
•Better educated with the differences in older and
younger displaced workers' pre-
•Have accumulated more tenure displacement earnings. The higher
with their prior employers skill levels of the older displaced
workers suggests that they may
be more effective learners than our
~than younger displaced workers sample of younger displaced workers.
What are the government
programs in place to assist
these workers in their
transition to new jobs?
2 different kinds of programs to assist
in their transitions to their new jobs:
1. Workforce Investment Act (WIA)
2. The Trade Adjustment Assistance
Reform Act (TAA)
Workforce Investment Act
The WIA offers three levels of services:
Their basic services stem from their outreach and
include assistance searching for and being placed in a
job, as well as information about the labor market.
Their more intensive services include a comprehensive
assessment, the creation of individual employment
plans with and for an individual, counseling, and career
They also offer training services that help people find
job opportunities in their community. The training can
be for occupational and skills training.
The Trade Adjustment Assistance
Reform Act (TAA)
• Offers two years of training programs including English as a second language
• Assistance with the Job search as well as a job search allowance
• A relocation benefit if it is necessary for an individual to relocating for a new job.
• Up to 104 weeks of weekly income Trade Readjustment Assistance during
training. It offers the same amount as Unemployment Insurance.
• Health Coverage Tax Credit subsidizes 65% of health insurance premiums in
qualified health plans.
• Alternative Trade Adjustment Assistance benefits workers over 50 years old, who
otherwise qualify for TAA benefits, and who obtain new employment within 26
weeks, with a wage subsidy to bridge the salary gap between their old and new
How effective is community-college
training in preparing these workers
for new employment? Is there a
difference in re-employment rates
between those who attend
community college and those who
do not? (If so, why might this be? If
not, why not?)
Rowan-Cabarrus Community College
Rowan-Cabarrus Community College invited 3350 workers
that showed interest in the worker retraining services.
Most were much older than the normal student body and
they participated in ESL and obtained GEDs, some even
completed nurses’ aid training.
Around 1600 were former Pillowtex workers who were
interested in retraining. Only 604 were enrolled in
curriculum courses and between 400-600 mainly enrolled
in short term courses.
Continuing Education for Displaced Workers
Younger workers looked for retraining in greater numbers,
while older workers tended to have more experience and
skills from on the job training.
The results of the study yielded that there would be
significant payoffs if students received a degree.
However, a small number of courses may only increase
earnings by a small amount if any increase is made at all.
Many graduates experienced a 7-10 percent or 4-5
percent increase in earnings based on the courses taken.
Younger and older workers typically receive the same
increase in pay from their class work.
Problems for the College Retraining System
The college training system that fuels manufacturing has run into many
problems in recent times as people have not been able to adequately fill the
number of positions available.
•The problems include-
•A shortening of the college budget to fund these types of technological
•Little public knowledge about the courses and the positions available, and
the poor science and math background of Community College students.
Job Retraining or Job Creation
Many critics cite the problem that job retraining is useless unless there is
some type of job creation.
The fact is many workers that have lost jobs have worked in one industry
their whole lives and their work has been shipped off to places where it can
be done cheaper.
This creates two problems
Jobs are lost not just moved.
The workers have little chance to be rehired given their skills as most of
the other industry jobs are moved soon thereafter.
It has not been determined yet which path would be the best to employ
workers, but both sides to the argument have legitimate arguments.
The Unpredictable Nature
Many workers have been confused by what the best field
would be to enter in. Some have been retrained to find their
jobs that they thought would be available to be full of other
formerly unemployed people or that the market was smaller
In Michigan of the retrained workers 60 percent had not found
a job or had found one in an unrelated field. Some workers
may have gone in for technological repair and found
themselves driving a school bus or taxi.
Many skilled workers end up being forced to accept unskilled
labor as a result of rapid changes in the market since their
entry into school.
There is little correlation between the workers that have been retrained and not
retrained. Some have slight increases in pay while others still are unable to find
new jobs in their field.
The benefits vary from the courses taken and the age and experience of the
Many unemployed workers are as successful finding new jobs but at a lower