In Focus: Transitional Jobs

Jul 31, 2014  |  PERMALINK »

House Subcommittee Looks at Subsidized Jobs for TANF Recipients

By Randi Hall and Elizabeth Lower-Basch

On July 30, 2014, the House Subcommittee on Human Resources of the Committee on Ways and Means held a hearing on subsidized employment programs and their effectiveness reducing poverty. Specifically, the hearing focused on state subsidized employment programs aimed at Temporary Assistance for Needy Families (TANF) recipients.

While states have always been allowed to use TANF funds for subsidized job programs, that application became much more prevalent in 2009 when the TANF Emergency Contingency Fund was created as part of the American Recovery and Reinvestment Act. Witnesses at the hearing discussed two of the longest-running subsidized jobs programs: Washington State’s WorkFirst Community Jobs program and Erie County (Buffalo), NY’s PIVOT program.  During the hearing, Sandra Collins, a former TANF recipient who found employment through the Community Jobs Program, announced that she had just received a promotion to store manager.  Dan Bloom of MDRC provided testimony summarizing past research findings and describing two evaluation efforts currently underway.

Chairman Dave Reichert (R-WA) and other subcommittee members showed interest in subsidized employment programs as a way to connect TANF recipients to work, although several members had concerns about how to ensure employers don’t use these programs as a source of free labor. Amy Dvorak of the Eric County Department of Social Services explained that her agency was very clear with employers that these placements were expected to lead to permanent full-time jobs.  She also told the subcommittee that if an employer terminated a program participant immediately after the subsidy period ended, the Department would not place further recipients with that business.

Members also raised questions about how to target programs to participants who were unlikely to be hired otherwise. Bloom explained that many programs are targeted to individuals with significant barriers to employment, such as criminal records or long-term unemployment.  He also noted that many programs provide job search assistance to recipients to try to connect them to unsubsidized jobs prior to considering them for subsidized placements. 

Subsidized employment is a valuable way to help disadvantaged adult and youth workers develop work skills and experience while earning money to support themselves and their families. It can be an important component of a TANF work program. President Obama’s FY 2015 budget proposal had several provisions to support subsidized employment, including a recommendation to shift $600 million from the TANF Contingency Fund to a new Pathways to Jobs program, which would support state-subsidized employment programs for low-income individuals. The positive atmosphere at this hearing suggests potential for future bipartisan efforts to support subsidized jobs programs.  When debating further investment into these programs, Congress should listen to Sandra Collins: “They make a difference and I am living proof of it!”


Apr 1, 2014  |  PERMALINK »

Senate Prepares to Renew Jobless Benefits

By Neil Ridley

Update: The Senate passed a temporary extension of federal unemployment benefits on Monday, April 7.

This week, the Senate is expected to pass a five-month extension of federal unemployment benefits, which lapsed at the end of 2013 when Congress failed to renew the program. Since December 2013, more than 2 million jobless workers have been cut off from benefits—deprived of a critical lifeline while they search for work in what is still a tough job market.

Even though the national unemployment rate has dropped below 7 percent, long-term unemployment remains persistently high—a disturbing aftereffect of the Great Recession.  In February 2014, 37 percent of jobless workers—3.8 million people—had been out of work for 6 months or more. Studies show that the longer workers are unemployed, the more difficult it is for them to find work. One recent study finds that long-term unemployment remains at historically high levels and employment transitions remain challenging, even in states with low unemployment rates. 

Unemployment benefits are not only one of the first lines of defense in a weak economy, but also a proven anti-poverty strategy. Census data show that unemployment benefits kept 1.7 million people above the poverty line in 2012, even as workers faced a reduction in the number of weeks of federal benefits.

The Senate bill includes two notable policy changes. First, it eliminates unemployment insurance benefit payments for individuals whose adjusted gross income in the preceding year reached $1 million or more. Second, it authorizes intensive assessments and reemployment services for long-term jobless workers.

When the Senate approves the extension later this week, the scene of action will turn to the House of Representatives.  It will be up to House members to restore and maintain current unemployment benefits for workers who need additional assistance while they look for jobs in a slowly recovering economy. 

Mar 7, 2014  |  PERMALINK »

Subsidized Employment a Key Strategy in President’s Budget

By Elizabeth Lower-Basch

President Obama’s FY 2015 budget proposal includes several provisions to expand the availability of subsidized employment for unemployed and disadvantaged workers.  This is critical, because unemployment remains high, with 3.8 million workers unemployed for 27 weeks or more.  Youth face particularly high unemployment rates, 21.4 percent in February 2014.  Subsidized employment was shown to be an effective and well-received strategy when funding was available under the TANF Emergency Fund.

The proposals in the President’s budget include:

  • A proposed $2.5 billion for Summer Jobs Plus, of which $1.5 billion would be distributed by formula funding to local communities to support summer and year-round jobs for an estimated 600,000 youth.  The remaining $1 billion would support innovation grants aimed at improving skills and career options for disadvantaged youth.
  • A recommendation to shift $602 million from the TANF Contingency Fund to a new Pathways to Jobs program, which would support state-subsidized employment programs for low-income individuals.  Participants could either be eligible for TANF cash benefits or have incomes below 200 percent of the federal poverty level and facing other barriers to employment. The program could cover 100 percent of wages, benefits and training costs for up to the first 90 days of employment.  Because the Contingency Fund is included in the budget baseline, this proposal would not require new funding.
  • Allowing funding under the Health Professions Opportunity Grants, which supports job training and supportive services for TANF recipients and other low-income individuals, to be used for subsidized employment to help workers transition from training to unsubsidized jobs in the health field.
  • Supporting training and work opportunities for youth and veterans to improve and maintain parks as part of the National Park Service’s Centennial.
  • Extending and revising the Work Opportunity Tax Credit (WOTC), which provides tax incentives to businesses that hire members of certain targeted groups, including welfare and SNAP recipients, veterans, and individuals with disabilities.  The reforms would focus the credit on businesses that expanded their hiring from these groups compared to previous years.

This budget builds on steps the Administration has already taken, such as prioritizing funding for subsidized employment and other work-based learning for long-term unemployed workers under the competitive Ready to Work grants supported by revenues under the H-1B visa program.

CLASP believes that subsidized employment is a valuable way to enable disadvantaged adult and youth workers to develop real work skills and experience while earning money to support themselves and their families.  

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