Archive for Saturday, February 20, 2010

$3.8B in stimulus funds for welfare jobs untouched

February 20, 2010


— Desperate though they are to fill gaps in their budgets, more than half the states in the country haven’t touched a $5 billion pot of federal stimulus funds meant to find work for welfare recipients.

Leaders in most states have hesitated to pony up the matching funds the program requires to create jobs that might not last after the federal subsidy’s Sept. 30 sunset date.

The Department of Health and Human Services has handed out $1.2 billion of the emergency cash for general welfare programs. That includes $124 million that went to 21 states and the District of Colombia to help them ease caseloads by paying employers to hire low-skilled, low-income workers.

States such as California, Tennessee and Georgia — where officials have seen unemployment rates spike among recipients of Temporary Assistance for Needy Families — are eagerly tapping the fund to subsidize the creation of thousands of jobs they say keep these workers from sinking further into poverty.

The short-term appeal is plain, at least for those on welfare rolls: In Georgia, for instance, an unemployed mother of two earning $270 a month in TANF support could earn three times as much in a subsidized, minimum-wage job.

Still, critics contend states could suffer in the long run, as employers are encouraged to focus on creating cheap, disposable positions rather than long-term job growth.

States should “offer incentives to businesses to hire more qualified people, since there is a better chance these people will be retained once the incentives are removed,” said Don Sabbarese, director of the Econometric Center at Kennesaw State University in Georgia.

The federal infusion does little to get people permanently off welfare, while draining money that could be used to make long term economic repairs, he said.

“If these jobs are not in areas of sustainable demand and growth, they will not lead to sufficient, marketable skills,” Sabbarese said. “And the money spent on these programs will be wasted.”

The emergency fund created by the American Recovery and Reinvestment Act of 2009 is designed to help states that have seen a rise in TANF costs as more families turn to the federally funded, state-operated aid program. States can use the cash to provide basic financial assistance to families, as well as to pay employers to create or fill low-level jobs with unemployed TANF recipients or low-skilled workers who might otherwise turn to the welfare program.


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