President's Budget Calls for Pathways Back to Work Fund

Apr 12, 2013

By Neil Ridley

The President’s budget blueprint released on Wednesday calls for Congress to support employment and job training opportunities for the long-term unemployed and low-income adults and youth through the Pathways Back to Work Fund. Even as the economy recovers, too many unemployed workers and individuals with low education and skill levels face a difficult job market. This legislative proposal, which was introduced as part of the American Jobs Act, builds on the successful, two-year program funded by the American Recovery and Reinvestment Act that provided jobs for about 260,000 people in 39 states and the District of Columbia.

The proposed Pathways Back to Work Fund in the budget includes three components:

  • $8 billion for employment opportunities and support services for unemployed, low-income adults;
  • $2.5 billion for summer and year-round employment opportunities for low-income youth, ages 16-24; and
  • $2 billion for work-based employment strategies with demonstrated effectiveness, such as on-the-job training, sector-based training and programs that integrate basic skills instruction and occupational skills training.

This key employment strategy is still needed to reach those who are left behind as the economy recovers from the Great Recession. Nearly two out of five unemployed workers have been jobless for six months or more. Individuals with low education and skill levels continue to experience unemployment rates that are significantly higher than those of more educated workers. The Congressional Budget Office projects that the sequestration’s automatic budget cuts that have gone into effect are expected to further dampen economic growth and reduce employment by 750,000 jobs by the end of the year.

Subsidized and transitional jobs are a proven way to give unemployed workers the opportunity to earn wages, build skills, and connect to the labor market, while also giving businesses an incentive to hire new employees when they might not have been able to do so otherwise. Researchers who have examined the implementation of American Recovery and Reinvestment Act workforce programs have found that paid work opportunities have been effectively used even for experienced unemployed workers who need to rebuild their confidence and prepare for reemployment.

A mix of non-profit, workforce agencies, and city and state public entities have operated transitional jobs and subsidized employment programs for almost 30 years as discussed in a new paper by the National Transitional Jobs Network and CLASP. If Congress authorizes the Pathways Back to Work Fund, this short-term federal investment would expand those strategies that prepare adults and youth for employment in a very difficult job environment. It’s the right investment at the right time for those who need it most.

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