Paying Companies To Hire The Unemployed

long-term unemployed subsidyBy Tami Luhby


NEW YORK -- Would you donate $6,000 to subsidize someone else's job?

The WorkPlace, a Connecticut non-profit agency, believes the best way to get the long-term unemployed back into the workforce is by paying companies to hire them. But instead of turning to the government for the money, the agency is trying something different: asking private companies and citizens to support subsidized jobs.

"In order to get long-term unemployed people a chance to demonstrate they can do the job as well as anybody else, you have to use unusual tools and that's one of them," said Joseph Carbone, the agency's chief executive.

More than three dozen companies, non-profits, foundations and individuals have donated more than $580,000 to fund The WorkPlace's initiative, called Platform to Employment. The AARP Foundation kicked in another $200,000 to assist the jobless over age 50.

The program is one of the latest efforts aimed at tackling the thorny problem of long-term unemployment. Millions of people have been jobless for months or years in the wake of the Great Recession, and it's much tougher for them to work their way back into the labor force, particularly if they are older.

Making The Transition
Some labor advocates say that subsidized jobs are a good way to smooth the transition for these longtime jobless Americans to return to the payroll. There's little risk for the company, and the workers get to demonstrate their value and pick up skills.

The WorkPlace's program focuses on those who have run out of unemployment benefits. Some 91 people went through it last fall and another 20 just finished the initial training.

The initiative is divided into two phases.

After going through a career evaluation, skills testing and mental health counseling, participants enter a five-week training program. There, they learn to craft their résumés, hunt for jobs and burnish their interview skills.

The second phase consists of an eight-week fully subsidized internship, which makes Platform to Employment different than most other job training programs. The WorkPlace doesn't put people in positions, though it collaborates with them to identify ones that might be suitable. It's up to the participants to seal the deal.

The WorkPlace hopes the subsidy gives its participants the edge. It markets itself as an unpaid headhunter, directing employers with open positions to people who meet the requirements.

"Our approach is to say to a business...we're going to find a candidate that matches that person's skills with your needs and then we'll offer a wage subsidy for a period of eight weeks," said Carbone, who is now looking to replicate the program nationwide. "That's like one of those offers that's hard to refuse."

The so-called internships are designed to turn into jobs, though not everyone from the first group of 91 has been placed and four were not hired.

So far, 59 people have landed full-time employment and another four are still in their tryouts. The positions range from supervising a warehouse to working in marketing for a large health care provider. The average salary is $36,000.

Minh Nguyen was out of work for two years before getting placed through the Platform to Employment program. The single mother of two is now employed as an office assistant at Action for Bridgeport Community Development, a non-profit agency.

"When I was doing my eight-week internship with them, they discovered that I'm not so bad," said Nguyen, who is making 35% less than her previous employment. "I'm employable and I have skills. Without that little boost from the agency, they probably wouldn't get to know me."

The WorkPlace is now gearing up to place its latest class, which finished training on Wednesday. This group, which had its training paid for by AARP, are all older than 50.

Subsidized employment allows older workers to dispel the myths many employers have about those over age 50, said Emily Allen, a vice president at AARP. Older workers have the highest long-term unemployment rates of any age group.

"This allows older workers...to show first-hand what skills they bring to the table after a lifetime of employment," she said.

Subsidized employment isn't a sure-fire solution, however. It remains unclear whether the payment really makes a difference or just serves as a windfall for companies that would have made the hire anyway, said Harry Holzer, professor at the Georgetown Public Policy Institute.

Also, many of the jobs available through subsidized employment may be lower paid or lower status, he said.

"When the subsidy ends, will the employer keep them on and will they be interested in sticking around?" Holzer said.

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Darlene

The jobs that are hirin are no good, pay nothin much and try to work people to death. There are no good jobs.

May 19 2012 at 5:05 PM Report abuse rate up rate down Reply
TRAVISSIGGLO

They did this in the 80's with high school kids, worked well, but the only took the hourly rate the job payed,
and each paid 50% of that rate. You have to find the jobs where the person is compatible with the work,
otherwise its a short term thing, Job has to produce permanent jobs,

May 19 2012 at 3:05 PM Report abuse rate up rate down Reply
acorvette96

Get the government out of business, and health care, and many other areas of our lives, and the economy will recover.

May 19 2012 at 12:48 PM Report abuse +1 rate up rate down Reply
peter

This is an age-old practice with skilled trades, union jobs, etc. You pay a kickback to the employer to get your foot in the door.

IMHO, however, this plan for groups and individuals to subsidize companies to hire the unemployed won't make much of a dent until there is considerable job growth. The simple fact is that the vast majority of companies are not hiring because they do not need to hire. We have 5 million fewer jobs than in 2007 and about an equal number of new workers entering the workforce as are leaving thru retirement.

May 19 2012 at 12:19 PM Report abuse +1 rate up rate down Reply
wapitibowhunters

Hire the unemployed???? Isn't that what a job does. Where will the money come from for this program and how many goverment employees will it take to oversee this program????

May 19 2012 at 10:40 AM Report abuse +1 rate up rate down Reply
1 reply to wapitibowhunters's comment
peter

Read the article - this does not involve the government at all.... it's an attempt to get non-profits and individuals to subsidize companies to hire the long-term unemployed. In other words, if a company will hire a person who has been out of work for a year or more, the NPO would ante up a portion of the person's wages for maybe 6 mos.

My intuition tells me that as soon as that worker hit 6 mos or whatever time period the subsidy lasted, he'd be gone.... and they'd hire a new subsidized employee.

BTW... have you heard that many companies and business actually list in their job openings that if you are currently unemployed you will not be considered for the position? Some states are in the process of passing legislation to prevent this sort of descrimination. However, that won't stop the problem.... they'll find other reasons. It's just much easier for a company to hire a currently employed person than one who has not worked for a few months.

May 19 2012 at 12:27 PM Report abuse +1 rate up rate down Reply
grundoboy

I guess solyndra is about to reopen...

May 19 2012 at 10:38 AM Report abuse +1 rate up rate down Reply
Iselin007

My ancestors help build this country before it was the United States now they let ganstas ruin the lives of the decsendants of the early settlers.

May 19 2012 at 10:32 AM Report abuse +1 rate up rate down Reply
Iselin007

The way these companies abuse older workers is a crime. The government ought to arm the EEOC the way it arms animal control officers then you'll see real change with these ghetto managers.

May 19 2012 at 10:25 AM Report abuse +2 rate up rate down Reply
1 reply to Iselin007's comment
kazz23

Your ignorance is astounding. "Ghetto" manager. I hate to break the news to you, but most hiring managers and employment decision makers are not minorities. You sound like a fool.

May 19 2012 at 2:04 PM Report abuse rate up rate down Reply
Pamela

"Paying Companies To HIre The Unemployed" Odd headline. Who are they going to hire, the ones already employed?

May 19 2012 at 9:21 AM Report abuse +1 rate up rate down Reply

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