State makes little use of U.S. jobs program

Staff WriterAugust 22, 2010 

  • The jobs subsidy program has created about 1,025 positions in North Carolina since it was implemented at the beginning of this year. Currently, 862 people are in jobs with wages paid by the federal stimulus.

    The program's guidelines require that beneficiaries be at or below 200 percent of the federal poverty line. That means a maximum of $21,696 a year for one person, or $44,100 for a family of four. Beneficiaries also must have dependent children.

    The program expires Sept. 30 unless it's renewed by the U.S. Senate. (The U.S. House has already voted to extend the program.)

A federal jobs program designed to cover workers' wages with stimulus funds is set to expire next month having barely put 1,000 to work in North Carolina, one of the lowest rates in the country.

Three-fourths of the state's counties, including Wake and Durham, didn't apply for the money.

Some county officials said they lacked time and staffing to create and oversee a complex program that would put people in temporary jobs for less than a year.

Wake County manager David Cooke said he was not involved in Wake County's decision but said the program was not necessarily a good deal for the county.

"There's no such thing as free money," he said. "In most cases it's false economics: Here's some more work for you to do if you accept 'free' money. We're all dealing with declining revenues or flat revenues. We have passed on certain stimulus programs because the additional requirements, that you're not compensated for, aren't worth taking on for the stimulus money."

The subsidized jobs go to hard-luck cases with slim chances of employment: people stuck in the welfare cycle, dislocated by layoffs or unable to find work because of criminal convictions.

In Edgecombe County, which has one of the highest unemployment rates in the state, the jobs program has led to temporary hiring of high-school dropouts in manufacturing plants that make swimming pool accessories, plastic containers and wooden crates.

"It's one of the most dynamite programs for a small business that has come along in a long time," said Virgil Cobb, president and CEO of Cinda Corp., a Charlotte building supply company that hired five people, including three with criminal records. "These ex-cons, they almost don't have a chance. They were walking the streets, collecting food stamps. One guy came right out of incarceration."

The bulk of the stimulus program is expected to put 105,000 to work in this state by next year, largely by funding construction, infrastructure and home weatherization projects, which are supposed to lead to job creation. But the lesser-known jobs program is different in that the government directly pays the wages - typically $8 to $13 an hour in North Carolina - of people who work for small businesses and, in some cases, local government agencies.

It has put an estimated 130,000 low-income adults to work across the country, with California, Florida, Illinois, Pennsylvania and Texas each generating more than 10,000 jobs. In all, 19 states generated more subsidized jobs than North Carolina, while 12 states created fewer.

Most of those people will be out of work again when the program expires Sept. 30 unless the U.S. Senate votes to extend it. But for a few, the temporary jobs have led to full-time offers.

One of those who'd love to continue permanently is Christina Harris, 26, a mother of two preschoolers who has been working since July 29 at A Southern Season, the gourmet food company in Chapel Hill. She makes $10.12 an hour.

Until being hired by A Southern Season, her main experience was as a cashier. Now, she prepares gift baskets and samplers, and works on store displays.

"I really help out everywhere they need me," Harris said. "It's a totally different experience than working with the public [as a cashier]."

Like creating a business

When the program was announced last fall, county social service agencies had less than a month to submit applications. Federal rules required the local agencies to line up employers willing to hire low-income workers with spotty work histories, and be willing to submit monthly progress reports.

The businesses were not allowed to use subsidized labor to replace people they had laid off.

Workers had to meet federal poverty guidelines and have dependent children.

"We had to hire job developers, create marketing materials, hold a job fair, talk to employers, create a database, screen people, interview all these people to verify they're eligible," said Mary Wilson, director of Mecklenburg County's social services. "This is like creating a $6 million business, ... and do all the checks and balances to make sure we're doing it correctly."

The counties also had to come up with a way to match 20 percent of the federal money.

That rule stymied many local agencies as most were experiencing budget shortfalls because of the recession, said Sherry Bradsher, social services director at the N.C. Department of Health and Human Services.

The counties also had to have day care and transportation subsidies available so that the temporary workers could get to their subsidized jobs.

"You can't have a subsidized employment program if you don't have a child-care subsidy program to go with it," Bradsher said.

More than a dozen states didn't participate at all, and states that did participate didn't do so statewide.

In North Carolina, for example, 76 counties didn't apply for the money after the Department of Health and Human Services sent out a statewide alert last fall about the availability of the funds. Of those that did, Mecklenburg County created the biggest program, with 377 positions at about 100 employers. Edgecombe County created 142 positions in manufacturing, day cares, motels and restaurants, as well as some in the social services department and other county agencies.

These two counties account for half the state's subsidized jobs.

"In our area, there was a dire need for employment," said Sherwood Pitt, Edgecombe's supervisor for welfare-to-work programs. "We knew that we needed something to get employment up."

Wilkes County created just one subsidized position: an intervention counselor for high-needs children with the Wilkes Community Partnership for Children. Orange County created 19 slots, most of them in county government for file clerks, janitors, mechanics, helpers and other low-skill positions.

Johnston County's Department of Social Services created 18 slots - all of them at its own agency.

Even so, some of the subsidized workers had to be fired for performance problems, said G. Earl Marett, director of Johnston County's social services agency.

Balancing costs

To critics of government spending, jobs programs tend to be more palatable than other types of government subsidies because government bureaucrats don't dictate what work is to be done, said Gregory Brown, a finance professor at UNC-Chapel Hill's Kenan-Flagler Business School.

Brown, a conservative economist who said he is opposed to social welfare programs on ethical grounds, said the stimulus jobs subsidies still are problematic because they could be misused by businesses to get free labor at the expense of more productive workers.

Brown said the big unknown is whether the benefits of such a program outweigh the cost. North Carolina received $11.4 million in federal stimulus money to subsidize jobs, about half of which went to Mecklenburg County.

"It's hard to estimate the net value of this program," Brown said. "If it makes these people part of the labor force in the future, if they become engaged in the economy, then it could make up that gap easily."

Supporters of the program say that most of the subsidized workers go from a situation where they are receiving cash assistance for not working, to receiving subsidized wages for working.

But the jobs raise economic conflicts for some workers. As part of the Temporary Assistance for Needy Families welfare program, almost all the subsidized workers continue receiving food stamps and Medicaid coverage for their families.

If they are offered a permanent job, they lose that assistance, and then their standard of living could fall dramatically.

"I've been thinking about those things," said Chasity McCain, an executive assistant at Cinda who is getting paid $12 an hour.

McCain has been offered a permanent job with the company but without health care coverage.

Before joining Cinda in February, she received $236 a month in public assistance, and last year went four months without electricity because she couldn't afford it.

"This job is increasing my income, but I will lose my benefits," said McCain, mother of a 7-year-old boy.

Still, she said the long-term benefits of having a job outweigh unemployment with Medicaid benefits.

McCain said in the past she had applied for numerous jobs and even had interviews, but all to no avail because she has a misdemeanor conviction for food stamp fraud in 2003. She had continued taking food stamps after she had found a job and became disqualified for that benefit.

"What would I be doing if I didn't have this job?" she said. "Looking for work. Probably homeless. Depressed."

john.murawski@newsobserver.com or 919-829-8932

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service