It's not a recovery without jobs

By: Christine L. Owens and George Wentworth

September 28, 2010 04:27 AM EDT

Today’s jobs crisis is a national emergency. Companies still aren’t hiring, despite
rebounding profits and a record $1.8 trillion in corporate assets. Private-sector employers
have added only about 750,000 jobs this year — less than 9 percent of the 8.5 million lost
during 2008 and 2009.

The unemployment rate has now topped 9 percent for 15 consecutive months. Roughly 15
million Americans are officially unemployed, and almost 9 million want full-time work but
can only get part time.

The only time in the past 60 years that unemployment was so severe was during the
1981-82 recession. But even when unemployment was at its highest then, only about one
in four unemployed workers was “long-term unemployed” — jobless for more than six
months. Today, 42 percent are. More alarming, 23 percent have been jobless more than a
year.

The “jobless recovery,” in other words, remains a crisis for millions of unemployed workers.

But because companies are holding onto cash instead of creating jobs, government must
do more to foster employment opportunities. Shockingly, however, Congress is on the
verge of doing just the opposite.

On Thursday, one of the most successful job-generating provisions of the recovery act, the
Temporary Assistance for Needy Families Emergency Fund, is scheduled to expire. If it
does, state programs that created nearly 250,000 jobs across the nation will likely
disappear — almost overnight. The Senate needs to reauthorize this program,
immediately.

Support for the program is widespread and crosses political lines. Mayors of big cities like
Philadelphia, Providence, R.I., and San Francisco, as well as governors in large and small
states agree that this is a stimulus program that succeeds in creating jobs.

The TANF Emergency Fund helps states encourage private hiring by reimbursing 80
percent of the costs of subsidizing new employment. The program targets low-income
workers with children but is not limited to those receiving temporary assistance benefits.
Thirty-five states have drawn more than a billion dollars from the fund, opening
employment doors for a quarter-million Americans — including adults and some young
people hired through summer youth programs.

The program has bipartisan support in the states. Mississippi’s Gov. Haley Barbour, for
example, hailed his state’s program, STEPS, for “spur[ring] job creation in the private
sector by assisting business owners with the upfront costs of hiring new workers.” In just
nine months, the STEPS program of gradually decreasing wage subsidies has placed
more than 3,200 workers in private-sector jobs. Early results show that nearly all program
completers have become permanent employees.
Meanwhile, the Put Illinois to Work program has found jobs paying $10 per hour for more
than 27,000 unemployed individuals.

One key to the program’s success is the flexibility it offers. Some states favor subsidies for
jobs most likely to become full-time unsubsidized employment, while others focus on
getting large numbers of the unemployed back to work as quickly as possible — even if
the jobs may not become permanent. Many states have effectively become job-creation
laboratories and customize solutions to fit local labor markets.

Despite this promising success, states are being forced to wind these programs down
because the emergency fund expires on Sept. 30. Congress can reverse this, clearing the
way to put hundreds of thousands of low-income workers back to work by renewing the
fund.

In fact, the state jobs programs nurtured through the emergency fund could easily form
the foundation for a more expansive and aggressive response to the national jobs crisis —
one that helps all categories of unemployed workers.

In today’s job market, competition for any job squeezes out the undereducated, the
overqualified and, quite often, applicants with long bouts of unemployment. That reality
requires us to open as many doors into the labor market as possible — and as soon as
possible.

Whether providing opportunity for a teenaged cashier lacking other marketable skills or a
downsized corporate worker with 30 years of experience, successful programs that
encourage employers to reinvest in human capital must be supported.

As described in our recent report, “Where the Jobs Are ,” building a sustainable recovery
ultimately requires good jobs that support families and communities. But to get there from
here, we must extend a hand to the long-term unemployed through real opportunities.

Renewing the TANF Emergency Fund would be an important step in that direction.
Allowing it to expire means killing jobs when we should be saving them, throwing
hundreds of thousands back into joblessness at the very moment we need to put America
back to work.

Christine L. Owens is the executive director of the National Employment Law Project, a
nonprofit organization that engages in research, policy analysis and advocacy on behalf of
low-income and unemployed workers. George Wentworth is a senior staff attorney at NELP.

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