Program Would Get Americans Experiencing Long-Term Joblessness Back to Work by Providing Dollar-For-Dollar Federal Funding of State Jobs Programs When Unemployment Rate is Above 7 Percent
Washington, D.C. – Colorado U.S. Senator Michael Bennet and U.S. Senators Tammy Baldwin (D-Wis.), Ron Wyden (D-Ore.), Chris Van Hollen (D-Md.), and Cory Booker (D-N.J.) introduced legislation to jumpstart economic recovery by immediately financing six months of wages and supportive services for eligible jobless workers. The Jobs for Economic Recovery Act would provide immediate funding for states, tribes and local governments to create or expand employment programs through a new Social Security Act jobs program, which would finance six months of wages for public, private or nonprofit jobs. Funds could also be used for job training and services like child care to help workers succeed upon completion of their job placement.
“As our nation pulls out of the worst economic crisis in nearly a century, we need sustained, bold action to get people back to work and promote a broadly shared economic recovery,” said Bennet. “These types of job opportunities are a proven strategy for helping struggling workers get a foot in the door of the labor market, and tying them to economic conditions will benefit American workers, employers, and local economies in the long run. This smart, forward-looking legislation will help Colorado and the nation recover from this crisis.”
The Jobs for Economic Recovery Act would fund state programs at a matching rate determined by economic conditions and the state’s FMAP rate. When the unemployment rate is above 7%, there will be a dollar-for-dollar federal match, and the programs will be 100% federally funded until 2023 to jumpstart recovery.
Providing funding for subsidized employment programs would allow states to target individuals who have lost their jobs or hours as a result of the Coronavirus Disease 2019 (COVID-19) pandemic, and create essential jobs to respond to the ongoing public health crisis. To protect public health, these funds could not be used to fund a position that puts workers’ health at risk. The bill also authorizes grants to nonprofit organizations to support similar programs and provides funding for technical assistance and planning.
By 2023, the bill would require programs to meet new criteria and rely on evidence-based practices to continue receiving funding. Phasing-in these requirements would ensure states, tribes and localities have the flexibility to quickly respond to this crisis, while ensuring strong, evidence-based programs over the long-term.
By tying funding for employment programs to economic conditions on the ground, the Jobs for Economic Recovery Act would prevent these programs from disappearing like they did after the Great Recession, and allow them to provide critical employment support as the job market improves.
Lastly, the bill would create an employee retention tax credit based on the Work Opportunity Tax Credit (WOTC) for employers who retain workers hired through the program for 24 months.
“I applaud Senators Baldwin, Bennet, Wyden and Van Hollen for reintroducing this important bill. To ensure a swift and robust recovery, we must set programs and policies in place that emphasize helping people get back to work, as this bill does. It is particularly encouraging to see more proposals that ensure fiscal support is tied to the economic conditions on the ground, and urge Congress to strongly consider this legislation,” said Arnab Datta, Employ America, Senior Legislative Counsel.
“The Jobs for Economic Recovery Act is critical to creating long-term, inclusive prosperity. It builds on proven strategies to give people the income, training, and supports they need to regain their economic footing during the COVID crisis. Also, because the relief in the Jobs for Economic Recovery Act is tied to economic conditions and not arbitrary dates, it lays the groundwork to support workers through future economic downtowns,” said Alexandra Cawthorne Gaines, Vice President of Poverty to Prosperity Program, Center for American Progress.
“The pandemic-induced recession has left millions unemployed, disproportionately affecting workers of color, those in jobs paying low wages, and young adults. Many people who have lost their jobs, especially young adults, have not been able to access any stimulus relief. While the American Rescue Plan addressed many crucial needs, we still need a large investment in subsidized employment to support the long-term recovery and redress deep-seated inequities. We applaud Senators Wyden, Van Hollen, Baldwin, and Bennet for introducing this important legislation. We urge Congress to pass it swiftly and to otherwise prioritize the needs of individuals with historic barriers to employment, including young adults, people of color, and those impacted by the criminal legal system,” said Olivia Golden, Executive Director, the Center for Law and Social Policy (CLASP).
“Millions of Americans—disproportionately workers of color, women, and low-paid workers—are still struggling to stay afloat and provide for their families, despite significant relief efforts that are underway. To kickstart a lasting and equitable recovery, policymakers should turn their attention to direct job creation through subsidized employment. The Jobs for Economic Recovery Act offers a promising, evidence-based plan to create new job and training opportunities; stabilize the national economy long-term; reach workers most in need of support, including workers with significant barriers to employment; and help workers find jobs that lead to sustained employment,” said Kali Grant, Senior Policy Analyst, Georgetown Center on Poverty and Inequality.
“The Jobs for Economic Recovery Act is a bold and urgently needed response to our crippled economy. It is foundational because it allows people to get back to work. It addresses the unemployment that has resulted from the economic crisis caused by COVID-19. The bill also addresses long-term structural unemployment in urban and rural areas. It will especially help workers and communities suffering from racial and ethnic discrimination in training and hiring. We call on Senators and House members to pass this essential bill as part of your next steps in moving America's economy forward. The time is right to focus on getting us back to work,” said Julie Kerksick, Senior Policy Advocate, Community Advocates Public Policy Institute.
“As an intermediary that invests in and advises employment social enterprises, we believe that individuals who have faced great adversity deserve the opportunity to work and contribute their skills and talents to our country and economy. The Jobs for Economic Recovery Act will ensure that individuals who are overcoming structural barriers to employment are included in subsidized employment programs and shows how an employment social enterprise could be the first step in an individual’s career pathway. This legislation will help to build a more equitable and inclusive workforce and restore the dignity of work for over 30 million people who are on the sidelines of the economy due to circumstances including previous incarceration, youth disenfranchisement, periods of homelessness, addiction, or mental health disorders – many of whose economic exclusion has only worsened amid COVID-19,” said Manie Grewal, Head of Policy, Roberts Enterprise Development Fund (REDF).
“The economic impacts of the recession have laid bare the inequities that have long existed in our labor market. Building back better requires solutions rooted in a clear vision for realizing economic justice. The Jobs for Economic Recovery Act reflects a necessary piece of this vision,” said Melissa Young, Senior Director, Heartland Alliance.