Thursday, September 17, 2009


"Under my proposed national version of MEED[Minnesota Employment and Economic Development], the federal government would provide wage subsidies of up to $8 an hour for employers who hire unemployed workers referred by local workforce agencies for newly created positions."

Timothy J. Bartik, "Adding Labor Demand Incentives to Encourage Employment for the Disadvantaged," Employment Research, July 2009.

A jobless recovery plus a lack of job targeting for low-income,low skilled workers in ARRA means that many disadvantaged workers will remain disconnected from the labor market unless other policies are developed.

"The subsidies would go to newly created positions to minimize displacement. This program is intended to increase total employment rather than to substitute disadvantaged workers for other workers.

In other words, it's the job-creating stimulus path not taken so far. Evidence shows that jobs are created and that job experience translates into longer-term labor force attachment.

"A program run on a similar level nationally in the United States might cost about $8 billion a year.

Yet current DOL ARRA policy discourages this kind of approach: "Stipends, work experience wages, training subsidies, wage subsidies are not an allowable use of grant funds. Here is some guidance for on-the-job training activities: Grant funds awarded through this SGA may not be used to subsidize the wages of program participants," DOL/ETA, September 4 2009.

So, looks like it's time for some advocacy.

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