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Subsidized Jobs Need Dedicated Funding

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Subsidized jobs need a substantial, dedicated federal funding stream to “better promote the development of programs to effectively help the sizeable share of the working-age population with serious or multiple barriers to employment,” a new report from Georgetown’s Center on Poverty and Inequality explains. Without such funding, subsidized jobs programs — a powerful tool to fight poverty, as I’ve explained — will remain limited in scale and scope.

For example, policymakers provided additional and targeted funding for subsidized jobs in 2009 and 2010 through the Temporary Assistance for Needy Families (TANF) Emergency Fund.  (In the 2009 Recovery Act, President Obama and Congress provided $5 billion over two years that states could use only for increased spending on basic assistance, emergency benefits, and subsidized employment.)  Some 42 states used these funds to create or expand subsidized jobs programs, creating over 260,000 jobs.  But once those additional funds were no longer available, most of these states ramped down their subsidized jobs programs or ended them entirely.

Without a dedicated funding source like the TANF Emergency Fund, states spend very little on subsidized employment.  They can use TANF funds for subsidized jobs, yet they spend less than 1 percent of their federal and state TANF dollars on these programs.  In fact, states spend only 8 percent of their federal and state TANF dollars on all work-related activities.  Even if states increased the share of their TANF funds they spend on work, the amount would fall far short of what’s needed to support large-scale subsidized jobs programs.

As Georgetown’s report notes, “the number of disadvantaged people willing to work consistently exceeds the number in competitive employment.”  The experience under the TANF Emergency Fund shows the need for and impact of a substantial and dedicated funding stream to help these workers find jobs.

Ife Floyd

Director of TANF Research and Analysis