Provision in Jobs Proposal Akin to Successful TANF EF Subsidized Jobs Program

Sep 09, 2011

By Elizabeth Lower-Basch

President Obama's American Jobs Act would create a $5 billion Pathways Back to Work Fund, a program patterned on the successful TANF Emergency Fund that subsidized jobs for disadvantaged parents and youth. The Emergency Fund created 260,000 jobs in 39 states between 2009 and 2010. The experience was so successful for disadvantaged workers and employers that a number of states and localities continued their programs or started new ones on a smaller scale even though federal funding for the program ended almost a year ago.

  • North Carolina built on the experience of its subsidized employment program to develop a new program called Job Boost NC that targets counties with the highest rates of poverty and unemployment. The program is funded with a combination of TANF dollars and contributions from the Open Society Foundation. It provides a 75 percent subsidy of wages up to $10 an hour, for up to 20 weeks.
  • Last month, Mississippi Gov. Haley Barbour announced his state is bringing back Mississippi STEPS: Subsidized Transitional Employment Program and Services for a second round this fall, using State Fiscal Stabilization Funds remaining from the American Recovery and Reinvestment Act. This program provides a decreasing level of subsidy to employers over time, reducing the cost of the program and ensuring that participating employers are truly invested in their workers. State unemployment insurance data show that 55 percent of those working at the end of the first round of the program were still working six months later. Employer interest in the program was so high that Mississippi obligated more than $1.7 million and created 458 jobs within eight days of starting the new round of the program.
  • Illinois continued Back to Work Illinois with state funds through Feb. 15, 2011, but the state ultimately discontinued the program due to lack of funding. San Francisco, Los Angeles and Oklahoma are among the places that are continuing subsidized jobs programs at much smaller scales. Wisconsin is continuing its transitional jobs program for non-custodial fathers. Oregon is continuing Jobs Plus, which existed prior to the Recovery Act.
  • The WorkPlace, Inc, a workforce investment board in southwest Connecticut, is modifying the idea of subsidized employment to focus on long-term unemployed individuals who have exhausted their unemployment benefits. Platform 2 Employment uses private funds to fully subsidize wages for four weeks and partially subsidize wages for the next four weeks. Workforce funds are used to provide participants with wrap around supports including coaching, employee assistance services and family supports. Participants are carefully matched to employers who have vacant career track positions.

In addition to subsidized jobs for adults and youth, the proposed Pathways Back to Work Fund would also provide funding for innovative local employment and training programs, including sectoral strategies and integrated basic and vocational skills training.  This represents an important recognition that our most disadvantaged populations will need targeted assistance to have a fair opportunity to share in the recovery and economic growth when they finally occur.  Congress should move quickly to pass a jobs package that includes these provisions.

Read CLASP's full analysis, American Jobs Act: New Work and Learning Opportunities for Low-Income, Unemployed Adults and Youth >>

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