By Shirley Iverson
Just when federal and state legislators are passing economic stimulus packages to get people working, House Bill 2204 in the Oregon State Legislature would end innovative programs that provide exactly the kind of stimulus that spurs people to continue working. Pieces of legislation are pending at both the state and the federal level for the addition of multiple public projects as part of economic stimulus packages. In contrast to the old “chicken in every pot” approach to poverty, there is another route one can go: the “job in every home” goal. America needs to work. It is the ultimate economic stimulus.
Oregon led the way in innovations in this area with its JOBS program in the 1990s, of which the unique JOBS Plus program was a component. Instead of focusing solely on public works projects, the JOBS Plus program partnered with private projects. Private businesses and local employers were contacted to develop subsidized placements for unemployed and underemployed clients. The program was built on the concept of reimbursing businesses for the wages of Oregon workers using a portion of welfare, food stamps or Unemployment Insurance (UI) dollars for the funding. Instead of being a welfare check, the benefits were paid to employers to partially reimburse wages. This program’s focus was to move UI, food stamp and welfare recipients into stable on-the-job training positions, and then to unsubsidized jobs. It was successful in the following ways:
“¢ It allowed small companies to grow their businesses with additional employees whose wages were augmented by the government.
“¢ It built a resume, on-the-job training and recommendations for current work experience for welfare clients, many just recently reentering work without the training needed to compete in the job market.
“¢ It stimulated small community economies with the wages.
“¢ Each participant had an Individual Education Account for themselves or their families to use to fund their future education.
“¢ The program developed a firm relationship between government benefit offices and local employers; it diminished the belief that UI and welfare clients were not employable; it allowed clients to receive their benefits through on-the-job training instead of a check in the mail.
“¢ Unemployed Oregon workers could work and earn wages instead of receiving UI benefits, continue to keep their work skills fresh, learn new skills for more stable employment, and develop a current reference for work search.
The Coalition for Evidence-Based Policy, a non-profit organization that promotes government policymaking based on rigorous evidence of program effectiveness, found that the JOBS program, with JOBS Plus as a component, had a positive effect on poverty reduction. It increased the employment rate and the annual earnings per person by 25 percent. It also saved government money by lowering welfare payments per person by 21 percent. This program distinguished itself from other Welfare to Work programs because of its personalized approach and close partnership with local organizations and employers.
The 2007-2009 Oregon state budget for welfare included an expansion of the JOBS Plus component for TANF (Temporary Assistance for Needy Families) recipients. Given the importance of job skill development for TANF families, the 2009-2011 budget should continue to assist this critical activity. Successful employment is a proven way out of poverty; but unfortunately, not every agency has responded positively to JOBS Plus and subsidized work.
HB 2204 proposes to remove all Unemployment Insurance language from the statutes involving the JOBS Plus program. The 2007 legislature discontinued funding for the Unemployment Insurance portion of JOBS Plus. This bill ends the participation of all Unemployment Insurance recipients just in time for a struggling economy and an even greater need for on-the-job training. A program that expects recipients to conduct an active work search, receive jobs skills training, and participate in on-the-job training should continue, not end.
In the current economic climate, when Oregon’s unemployment rate is increasing, the Oregon Supplemental Nutrition Assistance Program (food stamp) caseload is at a record high, and the welfare caseload has rebounded from record lows and is climbing, it is important to maintain and not cancel a program such as JOBS Plus. What is called for is a program that funds the very positions clients need to stay in or to reenter the work force. Work, and the economic support it provides, is the heart of the nation’s success. Providing government entitlement benefits for not working does not stimulate the economy. Subsidizing work is an economic stimulus package that stands a better chance of success.
Shirley Iverson is a consultant for the Government Transparency Project at Cascade Policy Institute. From 1988 to 2005, Ms. Iverson held several high-level leadership positions within the Oregon Department of Human Services.