Subcommittee Hearing on Subsidized Job Programs

July 31, 2014

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!”

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