How Long Should Subsidized Employment Last? As Long as Necessary.

By Melissa Young, Director, National Initiatives on Poverty & Economic Opportunity & Chris Warland, Associate Director for Field Building, National Initiatives on Poverty & Economic Opportunity

Time

Transitional jobs and subsidized employment interventions do a great job of helping people who would not otherwise be working to earn income and gain work experience. However, these interventions have not been shown to affect long-term workforce attachment. This is likely because participants typically face structural barriers and systemic exclusion from labor markets and economic opportunity that can’t be adequately remedied by a time-limited programmatic response. In order to leverage what subsidized employment does well (get people working) and achieve what it does not (boost long-term labor force participation), we need to consider extending the scope and duration of available subsidized employment, including indefinite and permanent subsidized work opportunities. As we work toward our goal of a nationwide, federally-funded subsidized employment initiative, it is time to reconsider our assumptions about the goals and outcomes of subsidized employment, and offer jobseekers opportunities to work as long as it takes to achieve success.

 

A typical transitional job or subsidized work experience might last three to six months; perhaps nine to twelve months at most. During this time, a worker often is expected to develop the necessary work skills and habits to access and permanently attach to unsubsidized work in the competitive labor market. This model works well for some participants, particularly people who have been successful in work in the past and need to brush up on their skills, or those who would benefit from a “foot in the door” with an employer in order to demonstrate their value.

However, for prospective workers who are facing more numerous or significant barriers to employment, those who are chronically unemployed, and those with problematic work histories, six months of subsidized employment might not be enough to build skills, mitigate barriers, and internalize successful workplace behaviors. And it does nothing to address pervasive discrimination and economic exclusion, and the fact that the only work available for many jobseekers is low-wage, low-quality work that does not meet a worker’s basic needs let alone sustain a family.

The body of evidence for transitional jobs programs bears this out. Although transitional jobs participation rates are very high—most people offered subsidized employment choose to work—these programs do not achieve the goal of helping people attach to employment long-term after the transitional job has ended. This pattern of high participation in subsidized work followed by a drop-off in long-term labor force participation has been replicated in study after study.

This pattern tells us two things: first, chronically unemployed people want to work, and are able to work if opportunities are made accessible to them. Transitional jobs programs do an excellent job of helping people who would not otherwise be working to access employment. Second, we need to do more to help these workers to stay engaged in employment over the long run. In order to fulfill our belief that everyone who wants to work should have a job, we need to address those workers who leave transitional employment only to become unemployed again because labor markets cannot or will not accommodate them.

Offering subsidized employment for a period that is longer, flexible, and individualized—and even indefinite—could allow transitional workers the time and space to learn, practice, and internalize the complex set of skills and behaviors necessary to succeed in work over the long term. And it would offer earned income, stability, and self-efficacy to a large number of people who can and will work but nevertheless do not have access to competitive employment due to structural barriers. For some workers, this would amount to a permanent subsidized job that offers supports and opportunity that the competitive labor market cannot or will not offer.

This discussion also raises a broader question about the value and goals of subsidized employment. The real power of subsidized employment lies in its ability to quickly put large numbers of people to work who would not be working otherwise. Open-ended subsidized employment on a large scale would allow us to leverage this power to provide earned income, dignity, and purpose to a large swath of people who are willing and able to work and yet are not being accommodated by the competitive labor market. Placing an arbitrary, one-size-fits-all time limit on subsidized employment limits this power.

Offering longer, more flexible, and time-unlimited subsidized work opportunities would represent a transformative change in the field of subsidized employment, and would not be possible without additional investment. Community-based organizations and other initiatives funded through existing grant structures generally limit the length of subsidized employment due to cost constraints, as opposed to seeking the optimal period to support worker success. This kind of transformational policy requires broader investment from the public sector, and aligns with our vision for a nationwide, federally funded subsidized employment initiative. As proposals for such an initiative gain attention and traction, we call for a range of subsidized work opportunities that can accommodate all workers regardless of need, including work without time limits.

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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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