A Mississippi program to subsidize American workers with federal stimulus money has put many unemployed people back to work. (More)
National Public Radio reported on the program, called Subsidized Transitional Employment Program and Services or STEPS, by which the state offered wage subsidies if employers would hire. To qualify, the employer had to show the applicant met federal poverty guidelines and had at least one minor child at home. The state would pay 100% of the new employee’s wages for the first two months of employment, tapering down to 25% by six months.
The average employee hired under STEPS earns $8.65 per hour, and over half of the 3200 workers hired through the program earned permanent jobs. One woman said she had been unemployed for two years until STEPS allowed her to get a minimum wage start. Since that start she has been promoted:
You go in there, you do the best that you can do. You show that you are appreciative for that opportunity. You prove yourself and employers [will] pay attention.
The temporary wage subsidy helps businesses that have work to be done, but are short on revenue and reserve capital. A window screen factory manager who hired four people through the STEPS program said he was very satisfied with the applicants the state sent to him, and the subsidies helped him keep his business afloat during the worst of the Great Recession:
I’m not sold 100 percent on it but it worked for our employees and it worked for us. Long term, is that the answer? I don’t know.
Not everyone was satisfied. Greg Cronin, owner of the Cascades Racquet Club, says the state’s restrictions were too harsh for his taste:
My problem is … the restrictions, really, that I see whenever they do these programs. I’m probably more of the small company who would love to make a step forward, who watches other companies get the breaks [and] get these assistive programs but still not have something except an increase in property tax on me.
Last month in Morning Feature I proposed the American Worker Tax Credit to subsidize labor. The STEPS program works differently, but has a similar idea: make labor affordable for businesses while ensuring workers earn a living wage.
Republican presidential candidate Ron Paul offers a different solution: eliminate the minimum wage. And just today Herman Cain said if you’re poor and unemployed, it’s your own fault.
And they accuse Democrats of class warfare….