Subsidized Employment Must Be a Part of the Recovery

Parker Gilkesson & Elizabeth Lower-Basch

In the wake of the COVID-19 crisis, the official unemployment rate has already spiked to over 14 percent for March 2020, with most observers predicting a historic high of 20 percent. Even before the pandemic, some communities experienced persistently higher rates of unemployment. Studies show that racial discrimination, low proximity to jobs, overcriminalization, and barriers to transportation all play a role in attaining jobs with livable wages—resulting in higher unemployment rates in communities of color. History teaches us that without targeted job creation efforts in communities experiencing the highest rates of unemployment, today's economic crisis will have a lasting negative impact on workers of color and those facing other structural barriers to obtaining employment.

One key way to fight the long-term harmful effects of unemployment is subsidized and transitional employment programs that use public funds to create temporary job opportunities for people looking for work. These programs provide workers with immediate economic support through work, while also improving their long-term employability by increasing their skills, work experience and networks. The programs have existed in varying forms for decades. Under the TANF Emergency Fund, 39 states created over 260,000 jobs between 2009 and 2010.

CLASP has called for a large scale transitional jobs program as part of the response to the COVID-19 crisis. Senators Tammy Baldwin, Ron Wyden, Chris Van Hollen, Michael Bennet and Cory Booker wrote to Senate leadership last month expressing support for such a program. The Pandemic TANF Assistance Act, introduced last week by Senators Ron Wyden, Sherrod Brown, Brian Schatz and Bob Casey, would create a new $10 billion Coronavirus Emergency Assistance Grant program that states could use to support emergency assistance to families and subsidized jobs. (Until the health emergency is lifted, this would be restricted to essential work and work that can be done remotely.)

Even without Congressional action, the administration can immediately allow states to incorporate subsidized employment for recipients of Supplemental Nutrition Assistance Program (SNAP) benefits into their SNAP Employment and Training (E&T) programs. That would then allow the states to receive 50 percent reimbursement of non-federal expenditures. Subsidized employment was added to the list of allowable components for SNAP E&T by the 2018 Farm Bill, but the Food and Nutrition Service (FNS) has said that states cannot implement this statutory provision until it has completed the rulemaking process. This rulemaking process is now under way and the proposed rule open for comment until June 17. 

Given the current COVID-19 pandemic and the sharp increase in unemployment, CLASP urges the Food and Nutrition Service (FNS) to allow states to begin incorporating subsidized employment into their SNAP E&T programs as soon as the public health situation allows people to return to work. We urge others to use this template comment or your own language to submit comments recommending that FNS allow states to provide subsidized employment as part of SNAP E&T as soon as the health emergency allows.