Monday, March 15, 2010

Scary Realities and Practical Solutions

According to a recent report issued by the Heldrich Center for Workforce Development, the labor market, workforce and educational system are undergoing significant changes in the first decade of the 21st century. With widespread unemployment at all levels of education, longer than usual time spent now looking for a job, and declining heath care coverage, it is no surprise that the Heldrich report highlights how very dissatisfied people are with both their personal economic circumstances as well as the country’s.

At the same time, state budgets and state workforces are suffering as well -- teetering on the point of going broke or broken. To respond to taxpayers cries for less government, lower taxes and to keep states from going bankrupt, federal and state law makers are desperately looking for fresh solutions to cutting costs and getting Americans back to work. The jobs crisis and state budget crises demands immediate attention, but need solutions that are practical and evidence based, and that mutually help job seekers and employers.

Jobseekers (including those with disabilities) need solutions that provide them with a paycheck first and foremost, along with a work experience and the ability to acquire skills and education if that paycheck is not from a full time job. Employers need solutions that can get them access to qualified workers at wages and benefits they can afford. As seen in the recent increases in part time and temporary workers, employers continue to remain reluctant to make permanent hires because of doubts about the recovery’s durability, and still remain skittish about the escalating costs of health care and the uncertainty of health care reform.

As for public policy makers charged with creating and implementing solutions, they need strategies that are low cost and high volume; that are easy to implement with a minimum degree of complexity and that promise to yield a moderate degree of success (meaning jobs) for hundreds, if not thousands of people. What state policy makers cannot afford these days are boutique programs, untested initiatives or further policies that research demonstrates don’t yield big results for either the unemployed or employers. They also can’t afford programs that are high cost and low volume; that require lots of complex moving parts to implement, that require low paid front line workers to develop new, higher skills in order to make it work, and where employment is realized for only tens of people, not in the hundreds and thousands needed to make a dent in the unemployment rate.

The $15 billion jobs bill passed by the Senate and the House is sadly likely to be much ado about nothing. The bill, which includes tax breaks to businesses to hire, will have a negligible effect on employment rates – especially among people with disabilities. In fact, evidence from the Work Opportunity and Welfare-to-Work Tax Credits points out that these employer tax breaks for new hires have suffered from poor participation and have not had any meaningful effect on employment rates among the disadvantaged (Urban-Brookings Tax Policy Center, 2005), despite what is seen as large potential benefits to firms. And for people with disabilities who have been routinely shut out of a robust labor market, much less one in recession, hiring credits are unlikely to yield any benefits at all.

Economists and academics have suggested other solutions that would put ‘jobs’ back in a credible job creation strategy. These include expanding summer youth employment programs, and deploying time-limited employment programs for public purposes in public and nonprofit agencies. These also include transitional job programs such as on-the-job training or OJT in private firms and nonprofits, and paid work experience programs such as through internships and apprenticeships. Other promising strategies, some more complex and longer to implement, include stimulating small business development including seeding and supporting ‘real businesses’ through nonprofits.

Any successful national jobs strategy must provide mutual support to jobseekers need for work and income, and businesses need to stay in business. Only if these two needs are met can communities prosper and our nation thrive. The current job bill falls far short.

Kathy Krepcio
Director, NTAR Leadership Center

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