America Needs a Big Investment in Subsidized Employment

By Indivar Dutta-Gupta & Kali Grant, Georgetown Center on Poverty and Inequality

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The job market continues to bounce back from the economic downturn, but Americans’ feelings about job opportunities remain the same. Despite months or even years searching for jobs, two million Americans—more than a quarter of all unemployed workers—are long-term unemployed, meaning they’ve been searching for work for six months or longer. Unemployment is in no uncertain terms a waste of economic and human potential in our communities, demanding attention from philanthropists, advocates, service providers, and policymakers alike. Subsidized employment is a proven, promising, and underutilized approach to solving this problem.

Subsidized job programs support private, public, and non-profit employers by providing a subsidy to offset the costs of employing workers who often otherwise would not be hired. In turn, the programs connect individuals who are willing to work but may be facing barriers to employment such as health problems, unaffordable or unreliable child care, or previous interactions with the criminal justice system with work, training, and other supportive services and opportunities.

At the Georgetown Center on Poverty and Inequality, we’ve just released a report profiling more than 40 subsidized employment programs over 40 years, in which we examine the evidence, promise, and many benefits of the programs for helping disadvantaged workers connect to work and training opportunities. The report describes a number of different models and offers a framework for designing programs, along with recommendations for policymakers and practitioners alike.

Particularly successful subsidized job programs like the AFDC Homemaker Health Aide program and New Hope for Families and Children in Milwaukee, both profiled in the report, offer important insights for how to best utilize the potential benefits of the programs for employers and program participants alike. For example, workers in subsidized job programs are able to earn income and often have a chance to access needed services, resources, and networks. Employers’ costs are lowered enough to encourage them to take a chance on potential employees they might otherwise ignore. And communities can experience an overall increase in benefits for its members, including improved health, strengthened families, and a reduced demand for public benefits and services.

Even as perceptions about employment prospects continue to improve, we must continue to ensure that all Americans, regardless of the barriers they may face, have access to jobs. Subsidized employment programs have been tried and tested. Sure, we need a lot more experimentation and innovation to develop new models that work for a wider range of disadvantaged workers, but that won’t happen without considerable investment, including by securing a dedicated funding source for these types of programs.

Subsidized employment provides immediate income for disadvantaged workers, incentivizes employers to hire more workers, and tackles the problem of long-term unemployment nationwide. The many proven and potential benefits of subsidized employment are available for discussion and action. Workers who need jobs are waiting.

Now it is time for a response from philanthropists, advocates, service providers, and policymakers. It’s up to us. It’s up to you.

Like what you read?
Explore the report, Lessons Learned from 40 Years of Subsidized Employment Programs.
See why The Atlantic says the report makes The Case for a New WPA.
Learn how the National Transitional Jobs Network supports subsidized employment programs.

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About National Initiatives on Poverty & Economic Opportunity

Heartland Alliance’s National Initiatives on Poverty & Economic Opportunity is dedicated to ending chronic unemployment and poverty. We believe that every person deserves the opportunity to succeed in work and support themselves and their families. Through our field building, we provide support and guidance that fosters more effective and sustainable employment efforts. Our policy and advocacy work advances solutions to the systemic issues that drive chronic unemployment.

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