The Jobs Act: Changing the Focus to Create More Jobs More Quickly, Cheaply and Certainly

Now that the Senate has refused to consider the president's Americans Job Act in one piece, it is time to look at each piece. Reallocating less than 10% of the $447 billion dollars originally proposed could result in the creation of an additional 4 million jobs. As the White House Fact sheet stated there was in the original act the opportunity to "build[] off the successful TANF Emergency Contingency Fund wage subsidy program that supported 260,000 jobs in 2009 and 2010." Unfortunately, as originally drafted the AJA allocated less than 1% of its funding to this program that could, if expanded, quickly, cheaply and certainly create literally millions of new jobs for low-income individuals who are currently receiving welfare or extended unemployment benefits.

Los Angeles was one of the jurisdictions that created a significant number of such jobs last year. Using funds from the existing welfare program augmented by funds from the first stimulus program, Los Angeles County created over 13,000 jobs in a bipartisan program spearheaded by Supervisor Knabe, a Republican. Because the program utilized existing employers, jobs were created quickly and because these jobs were available to those already on welfare, the incremental cost of each job was relatively modest.

Those who were hired under this Temporary Subsidized Employment program gained an increased income, the dignity of a job, useful experience and, most importantly, the possibility of a reference that could lead to unsubsidized employment. The benefits were not illusory. Sitting with Michelle Obama at the joint session of Congress in which the president first outlined the AJA was Tamara Washington of Torrance, California who had gained initial employment under the TSE program and had then been able to move on to a much better unsubsidized job paying $17.00 per hour.

If the California TSE program was replicated and expanded, this one program alone could create four million entry level jobs paying minimum wage at an incremental cost of approximately $40 billion dollars. In California, for example, a 32 hour a week job (leaving a day a week free to seek unsubsidized employment and take care of family emergencies or other personal needs) paying minimum wage ($8.00 per hour) could be created by an additional expenditure of less than $10,000 per job per year. This is possible because the persons targeted for jobs by this program would already be receiving either federally funded welfare or extended unemployment benefits. Under these circumstances, the additional federal funds necessary to pay a person's wage and administer the program are quite modest. Moreover, because the method of creating jobs uses existing private, public and non-profit sector employers and does not involve putting work out for bid these jobs can be created quickly.

Under such a program there is a partnership between the federal government and our communities. The federal government funds 80% of the cost of an entry level job (the wage portion of the job) with the creativity of local employers (be they in the private, public or non-profit sectors) providing the actual jobs and the remaining 20% of the cost in the form of supervision. Whether jobs can be created under such a program is not open to speculation by the economists or pundits. Since most of the money is paid directly for wages, there is no uncertainty. If the money is spent; jobs will have been created.

If such a program were created and publicized, one can well imagine the thousands of jobs that could be created just by the nation's non-profits and churches, synagogues and mosques. Almost every non-profit and religious institution has experienced a contraction of resources as a result of the recent recession and an expansion of the need for its services. A program of National Job Fellows could fill the service gap while providing real jobs and real job experience to those in the country who are most in need. Businesses, small and large, could also take advantage of this program, as they did in Los Angeles, to expand their work forces where they might not otherwise.

We have always prided ourselves as being a "can do" nation. We have created jobs in the past; we must do so again. The very fabric of our society is being eaten away by persistent, high unemployment. It is time once again to "Can Do!"

In my next post, the cost of jobs program versus the cost of there not being a jobs program.