In Focus
Mar 07, 2013 | Permalink »
In Face of Budget Constraints, State and Local Governments Find Creative Ways to Fund Subsidized and Transitional Jobs Programs
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. A variety of non-profit, social enterprise, and city and state public entities have operated transitional jobs and subsidized employment programs for almost 30 years. Funding from the TANF Emergency Fund in 2009-2010, part of the American Recovery and Reinvestment Act (ARRA), enabled the operation of such programs at a larger scale, and in more places, than had previously occurred. More than 260,000 individuals were placed in subsidized positions in 39 states and the District of Columbia.
No dedicated federal funding is currently available to support subsidized employment programs. Any entity seeking to operate such a program must therefore creatively leverage and blend multiple sources of funding. A number of cities and states have successfully done so, and a new paper from the National Transitional Jobs Network and CLASP illustrates those strategies and makes recommendations based on their success. This paper was supported by the Annie E. Casey Foundation and the University of California at Berkeley as part of their Big Ideas for Jobs series. In addition to highlighting the opportunities to use block grant funding, from both TANF and Community Services Block Grant (CSBG), the paper identifies efforts to fund these jobs by averting future expenses associated with prisons and other corrections measures and by leveraging public contracting and bidding opportunities.
One example highlighted in the paper is the Chicago transitional jobs program for formerly incarcerated individuals. This began as a pilot project in 2004, as part of a package of Ex-Offender Reentry Initiatives. Based on its success, it was expanded in 2006, and received funding through the city of Chicago's Corporate Fund, which originates from corporate taxes as well as income from leasing public assets such as toll roads and parking meters. The city later chose to expand the program with CSBG funds that became available through ARRA to support neighborhood cleanup using transitional jobs (TJ) work crews. When ARRA funding expired, the city decided to continue funding the project through its regular (non-ARRA) CSBG block grant.
CLASP still believes that the federal government should provide dedicated funds to support subsidized employment and transitional jobs programs, such as the Pathways Back to Work Fund. However, even if such funding does not materialize, state and local governments should not abandon the possibility of operating subsidized employment and transitional jobs programs. Such programs can be funded through a range of mechanisms and have both short- and long-term benefits to participants and society.
Nov 20, 2012 | Permalink »
When it Comes to Job Creation, “Do No Harm” Isn’t Enough
By Elizabeth Lower-Basch, Neil Ridley, and Kisha Bird
The economy in general, and job creation in particular, was the top priority for voters in this month’s general election. But Congress could put the country back into recession if it fails to act during the post-election session to avoid sequestration (automatic, across-the-board, spending cuts), allows federal extended unemployment insurance benefits to run out, and fails to extend middle-class tax cuts.
But just avoiding making matters worse isn’t good enough. According to the most recent employment statistics, released just before the election, more than 12 million people in the US were unemployed in October, with 5 million of them out of work for more than 26 weeks. The unemployment rate for blacks was 14.3 percent, for Hispanics 10.0 percent, and for single mothers 11.5 percent. And for young people ages 16 to 24 the unemployment rate was 15.5 percent- nearly twice the national average; for Latino youth it jumps to 17 percent and skyrockets to 27.6 percent for African Americans.
The budget agreement that President Obama and Congress will develop over the next month must include specific actions to create jobs and build the economy. This should include investments in infrastructure, including rebuilding the areas devastated by the recent storm. But it should also include dedicated spending aimed at ensuring that disadvantaged workers, in particular low-income youth and adults of color who were already struggling before the recession, are not left behind as the economy expands.
Specifically, the agreement should include the $12.5 billion for Pathways Back to Work that President Obama proposed in his February budget, which included $2.5 billion designated for summer and year-round jobs for youth, and $10 billion for subsidized employment and training for adults. The President’s American Jobs Act also called for $5 billion for subsidized employment and training, estimated to create more than half a million jobs. This proposal was also introduced as a free-standing bill, the Pathways Back to Work Act, sponsored by Rep. Miller (H.R. 3425) and Sen. Blumenthal (S. 1861).
This builds on the successful subsidized employment programs that were operated in 2009 and 2010 with funding from the American Recovery and Reinvestment Act, where in a relatively short period of time, over 600,000 jobs were created for low-income youth and adults supported by the existing state and local workforce infrastructure. Governors would have the option of administering subsidized employment for adults through TANF agencies or local workforce boards under the Workforce Investment Act or a combination of the two. Local workforce boards could use the funds to create employment opportunities for youth in emerging or in-demand occupations and to provide year-round youth participants with education and training leading to industry-recognized credentials.
Too many workers are still looking for jobs. If the economy creates jobs at the rate of the best year of the 2000s —208,000 jobs per month — it will take until 2020 before we return to pre-recession employment rates. Our country’s unemployed – and underemployed – workers can’t wait that long. The voters have spoken. It is time for Congress and the Administration to listen and act.
Apr 04, 2012 | Permalink »
New Law Gives Major Employment Strategy a Boost
By Neil Ridley
Following the enactment of recent federal legislation, work sharing - a strategy to reduce unemployment and help businesses and workers weather economic downturns - is getting a major boost to help more states buffer their economies and communities. This is the focus of a new report, A Breakthrough for Work Sharing: A Summary of the Layoff Prevention Act of 2012, released this week by CLASP and the National Employment Law Project (NELP).
New Jersey, which passed a state law in January 2012, became the most recent addition to the ranks of states with work sharing programs - bringing the total number to 24 states and the District of Columbia. Now the Ohio state legislature is considering a work sharing bill.
Work sharing, also known as short-time compensation (STC), is an option within the federal-state Unemployment Insurance system that provides employers with an alternative to layoffs during a business slowdown. For example, a business facing a slump in demand can reduce employees' hours by 20 percent instead of laying off one-fifth of its workforce. In a state with a work sharing program, workers can apply for and receive prorated unemployment benefits to help compensate for reduced work hours. It's a win-win strategy for employers, workers, communities and local economies.
The Middle Class Tax Relief and Job Creation Act (H.R. 3630), which President Obama signed in February 2012, marks a major breakthrough for work sharing. The final legislation updates and clarifies short-time compensation provisions in federal law for the first time in 20 years. In a significant boost to implementation, the Act provides nearly $500 million in temporary funding to states in three ways:
- Full federal reimbursement for STC benefits paid to workers for up to three years in states with existing work sharing programs;
- Partial reimbursement of benefits paid to workers in states without existing programs that enter agreements with the U.S. Department of Labor; and
- Grants to states to increase business participation and upgrade state programs that are in line with new STC provisions.
The impetus for the work sharing changes came from Sen. Jack Reed (D-RI) and Rep. Rosa DeLauro (D-CT), who introduced the Layoff Prevention Act in the 111th and 112th Congresses.
Ramping up work sharing programs, as the new law does, will have several critical benefits. It will help prevent layoffs in what is still a fragile economy with an 8.3 percent unemployment rate. It will also help states establish an important economic security program for workers, businesses and communities and have it in place when the next recession hits.
To learn more about the new federal law, read CLASP and NELP's new publication.