Employers Wanted: Federal Funds up for Grabs
January 31, 2010 | The San Francisco Chronicle | Link to article
President Obama says he's all about creating jobs, but that's easier said than done.
Nearly a year ago, the federal government gave states a big pot of money to pay employers in the public, private and nonprofit sectors to hire low-income parents. The program reimburses up to 100 percent of the employee's wages.
Yet only a few counties - including San Francisco and Los Angeles - have launched large-scale programs and even in those places, many employers are unaware of them or unwilling to participate.
"I think people are nuts" not to hire federally funded employees, says Robert Miller, director of books at Internet Archive. The nonprofit has hired 103 people earning $11 to $33.65 per hour under San Francisco's Jobs Now program, nearly doubling its workforce. "If every employer in San Francisco hired one person, we could make a dent in unemployment," Miller says.
Money for the program came from the American Recovery and Reinvestment Act passed in February. Congress gave state welfare agencies $5 billion in temporary emergency funds for needy families, some of which they can use for subsidized employment. The rest is supposed to cover increased welfare caseloads.
States could design their own programs, within limits. The funding will end Sept. 30, although some programs are lobbying for more time to spend the allotted funds.
The program got off to a slow start because many state legislatures recessed shortly after the recovery act was passed. Forms to apply for funds were not available until July, and a funding question was not answered until fall, according to Elizabeth Lower-Basch, senior policy analyst with Center for Law and Social Policy.
As of last week, only 21 states had applications approved for subsidized employment programs, and only $122 million had been awarded for wages and other program costs, according to the U.S. Department of Health and Human Services.
It's not known how many jobs have been created under the program nationwide. Even though it was one of the few parts of the stimulus act that specifically created jobs, for technical reasons it doesn't fall under the regular recovery act reporting requirements, Lower-Basch says.
She estimates that 20,000 jobs have been created nationwide, including nearly 15,000 in California.
Of the $5 billion pot, which is being divvied up based on each state's welfare load, California can draw up to $1.8 billion. But it expects to draw only about $850 million, including $200 million for subsidized employment, before time runs out on Sept. 30, says Lizelda Lopez, a spokeswoman for the California Department of Social Services. If the deadline is extended, it could spend more of that money.
1,500 jobs in S.F.
Fifty of the state's 58 counties "are offering or in the process of offering" a subsidized employment program, Lopez says. She says that Los Angeles wants to place up to 10,000 people by May.
San Francisco's Jobs Now program has placed just over 1,500 and seeks to place at least 2,100 total.
It has about 3,000 people on a waiting list and 400 to 500 jobs waiting to get filled, says Trent Rhorer, executive director of San Francisco's Human Services Agency.
Santa Clara County's program has placed about 760 in full- and part-time jobs.
Contra Costa's program has placed about 200 people, Alameda County's 50. San Mateo and Solano counties are just starting their programs.
Many counties wanted to get final guidance from the federal and state government before beginning their programs to make sure they would get reimbursed. That guidance didn't come until fall.
San Francisco was willing to take a risk and started in May.
To qualify for a job in San Francisco's program, you must live in the city, although the job could be elsewhere. You must have at least one child younger than 18 in your home and have a right to work in this country.
You also must be in CalWORKS (the state's welfare program) or your household income for the past month must be less than 200 percent of the federal poverty limit for your family size. A family of three could earn up to $3,052 per month. A family of five could earn up to $4,298.
A person on unemployment with no other sources of family income could often qualify. Once in the program, there is no limit on how much can be paid.
S.F.'s earnings range
In San Francisco's program, wages range from $9.79 to more than $50 an hour. "If the (annual) salary is over $75,000, we take a second internal look to make sure it reflects labor market standards," Rohrer says.
The average wage in the program is $20.83 per hour in private-sector jobs, $14.04 in nonprofit positions, and $12.21 in government jobs.
The program pays 100 percent of wages, but the employer must pay the usual payroll taxes such as Social Security and Medicare. The new workers cannot displace existing workers.
Other California counties have the same general rules, although some will work only with CalWORKS recipients and the reimbursement formula for employers might be slightly different.
Internet Archive, which is creating a digital library of books, hired the most people through the San Francisco program. "We are three years ahead in our business plan because we have these people," Miller says.
He's happy with the quality of workers, who range from scanners to engineers. "It's like hiring First World workers at Third World wages," he says.
The new workers "have energized our existing workforce," Miller adds. "These are motivated people who are hungry for a job."
San Francisco Soup Co. has hired 10 people through the program, including a restaurant and catering manager.
"The program gave us the confidence and flexibility to hire earlier than we had expected and to grow our business, especially in the catering area," says co-owner Steve Sarver. He plans to keep all of the employees on at his own expense if the funding dries up after September.
Other for-profit employers that have made significant hires through the program include Twice Verified, a marketing company that provides debt-settlement leads that has hired 13 people at wages up to $57.69 per hour; and Bayview Painting of Burlingame, which has hired 11 union painters and laborers at up to $52.74 per hour. Neither company returned calls.
Not everyone has had success hiring qualified workers. Gumas Advertising requested an interactive designer, but "I didn't get a whole lot of candidates. We had one interview, but the applicant's skill set was not suitable to the level we needed," agency President John Gumas says.
Good people go quickly
Kate Stewart, human resources manager at the American Conservatory Theater, found that "good people go fairly fast." ACT wants to hire an usher and receptionist, but "the difficulty has been us moving fast enough to get over there and grab people."
Why aren't more employers taking advantage of this?
Some are reluctant to hire people they might have to lay off after Sept. 30. Some mistakenly think they will have to take an applicant they don't want. They won't, says Denise Boland, a CalWORKS administrator in Santa Clara County.
Boland says her program is targeting employers who will be able to keep employees after Sept. 30. "Our goal is that 70 percent will transition to permanent jobs," she says.
Counties participating in program
Most Bay Area counties are just ramping up their federally funded subsidized employment programs. Here are program names, number of people hired to date, and contact information for selected counties:
-- Alameda: AC Hire. Number hired: about 50. (510) 670-5514.
-- Contra Costa: Subsidized Employment Training. Number hired: nearly 200. (925) 313-1640.
-- Marin: Marin Works Now. Number hired: about 40. www.marinemployment.org or (415) 473-3340.
-- San Francisco: Jobs Now. Number hired: about 1,500. www.jobsnowsf.org or (877) 562-1669.
-- San Mateo: SMC Works. Number hired: none, just starting. (650) 877-5627.
-- Santa Clara: SCC Works. Number hired: at least 760 in full- and part-time jobs. For private employers and prospective employees not on CalWORKS: (408) 979-6371. Nonprofit employers: (408) 793-1214.
-- Solano: Program begins early February. Taking calls from employers only at (707) 553-5173.
Source: Chronicle research