Nationwide 32 states are tapping into a $5 billion emergency fund to help small businesses, nonprofits and public hospitals hire and train unemployed workers at a time when organizations would be reluctant to hire. The fund supports the Temporary Assistance for Needy Families (TANF) welfare-to-work program. It is part of the American Recovery and Re-Investment Act (ARRA) of 2009 and provides states with extra resources to assist low-income families during the recession.
TANF Stimulus Money at Work in 32 States
In New York TANF Emergency Funds have been used to create "green jobs", expand health care outreach, and provide longer-term transitional jobs to families who have the most difficulty finding jobs. The city of Los Angeles, CA, has created 10,000 new jobs with non-profits, public agencies and private entities.
Typical subsidized jobs are clerical, administrative and maintenance positions at a wage of $10 per hour . The TANF Emergency Fund pays the full cost of wages; employers' costs of supervising and training participants are treated as in-kind donations to the state.
TANF Stimulus Money Helps Small Businesses
Taylor Machine Works in Winston County, Mississippi — the company makes Big Red forklifts — had to let 200 of its 500 workers go in 2008. In 2010 Taylor Machine Works rehired eight of its former workers and plans to hire 17 more under a subsidized employment program Mississippi launched with federal stimulus money, known as Mississippi STEPS. Republican Governor Haley Barbour personally promoted the program throughout the state in TV and radio commercials. Mississippi has funded more than 1,400 jobs throughout the state and plans to create 3,100 more at an average wage of $8.68 per hour.
Under the TANF Emergency Fund, each state can design its own model of how subsidized job placements work to best fit the needs of local businesses and communities. States also have flexibility to determine who can qualify for a subsidized job. Participants include families receiving cash assistance and low-income unemployed parents, including those who have exhausted unemployment benefits. In all cases, the individual employers decide whom to hire.
House Approves TANF Extension, Senate Action Delayed Until September
On May 28, 2010, the U.S. House of Representatives passed H.R. 4213, which included a $2.5 billion extension of the TANF ECF through September 30, 2011. Several versions of the bill failed in the Senate. The legislation would provide $2.5 billion in new funds that states could use to serve families (and in some cases, single adults) through September 30, 2011.
The TANF emergency fund provides jobs at a very low cost. Subsidized jobs programs are boosting local economies and help states to avoid difficult budget cuts. If the Senate doesn't act immediately after Memorial Day recess, funding for the job initiatives will expire by September 30, 2010.
Sources:
LaDonna Pavetti & Liz Schott, Extending TANF Emergency Fund Would Help Small Businesses Recover from Recession, Center on Budget and Policy Priorities, March 23, 2010, Web.
Vestal, Christine, Subsidized Jobs: A Faint Echo of the New Deal, Stateline.org, June 18, 2010, Web
Elizabeth Lower-Basch, Extending the TANF Emergency Fund Creates Jobs Now, CLASP policy solutions that work for low-income people. August 19, 2010, Web.
House Approves UI, TANF Fund Extensions, National Skills Coalition, May, 28, 2010, Web.
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