Program would support long-term economic recovery by providing dollar-for-dollar federal funding of state jobs programs when unemployment rate is above 7%
Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and U.S. Senators Tammy Baldwin, D-Wis., Chris Van Hollen, D-Md., Michael F. Bennet, D-Colo., and Cory A. Booker, D-N.J., today introduced legislation to support the economic recovery by immediately financing six months of wages and supportive services for unemployed workers.
“The economy is in a ditch because Donald Trump gave up on fighting the virus, and it will take years to recover. Immediate federal financing of six months of wages is critical to getting folks back to work,” Wyden said. “Importantly, our bill ensures federal support is guaranteed over the long-term by tying it to economic conditions on the ground. More than 20 million Americans are unemployed, and without a bold federal response, there will be prolonged economic misery for the millions of workers who won’t be able to go back to their old jobs.”
“Millions of Americans are unemployed and struggling to make ends meet, so we need a bold, federal investment in state and local transitional jobs programs to create job opportunities and put people back to work,” said Baldwin. “As we support workers and businesses in our recovery from this economic crisis, this legislation is a stronger way forward and we should seize it.”
“Trump’s negligence during the COVID-19 pandemic has magnified the economic harm and loss of American jobs. Millions of Americans are still filing jobless claims each week while struggling to pay their bills and put food on the table. Providing both short-term relief and a strategy to eliminate long-term unemployment is necessary to the success of every worker and of our country. This bill does just that – including by incorporating provisions of earlier legislation we introduced — the Long Term Unemployment Act. The Congress must provide more economic relief and opportunities for American families now, and we’ll be pushing to include this legislation in the next COVID-19 bill,” said Van Hollen.
“We will need bold and innovative ideas to get people back to work as we emerge on the other side of the pandemic, especially for people who were already struggling to get a strong foothold in the job market,” said Bennet. “The legislation we are introducing today will help create job opportunities for unemployed Americans, through locally-directed employment programs that are based on community-specific workforce gaps and employer needs.”
The Jobs for Economic Recovery Act would provide immediate funding for states, tribes and local governments to create or expand employment programs through a new Social Security Act jobs program, which would finance six months of wages for public, private or nonprofit jobs. Funds could also be used for job training and services like childcare to help workers succeed upon completion of their job placement.
The Jobs for Economic Recovery Act would fund state programs at a matching rate determined by economic conditions and the state’s FMAP rate. When the unemployment rate is above 7%, there will be a dollar-for-dollar federal match.
Providing immediate funding for subsidized employment programs would allow states to target individuals who have become unemployed or underemployed as a result of COVID-19, and create essential jobs to respond to the public health emergency. To protect public health, these funds could not be used to fund a position that puts workers’ health at risk. The bill also authorizes grants to nonprofit organizations to support similar programs and provides funding for technical assistance and planning.
By 2022, the bill would require programs to meet new criteria and rely on evidence-based practices to continue receiving funding. Phasing-in these requirements would ensure that states, tribes and localities have the flexibility to quickly respond to this crisis, while ensuring strong, evidence-based programs over the long-term.
By guaranteeing that funding for employment programs remain available into the future, the Jobs for Economic Recovery Act will prevent these programs from disappearing like they did after the Great Recession, and allow them to provide critical employment support as the job market improves.
Lastly, the bill creates an employee retention tax credit based on the Work Opportunity Tax Credit (WOTC) for employers who retain workers hired through the program for 24 months.
A copy of the bill text is available here.
A section-by-section summary of the bill is available here.
Statements of Support
Alexandra Cawthorne Gaines, Vice President of Poverty to Prosperity Program, Center for American Progress: “The Jobs for Economic Recovery Act will provide states with critical resources to expand subsidized job programs and provide much-need work supports like child care and job training at a time when the nation is facing record-level unemployment. We need Congress to pass this bill without delay to help the millions of Americans who are falling behind due to the devastating economic impacts of this pandemic.”
Kali Grant, Senior Policy Analyst, Georgetown Center on Poverty and Inequality: “In the midst of a devastating national crisis that has hit Black, Brown, women, and low-paid workers the hardest, it’s more important than ever for policymakers to invest in proven strategies for reaching workers who are left behind now and when the economy improves. This subsidized employment proposal represents an ambitious plan to reduce persistent racial inequalities; create new employment and training opportunities; and help workers, employers, and communities recover from the crisis and beyond.”
Olivia Golden, Executive Director, the Center for Law and Social Policy (CLASP): “The Coronavirus pandemic has caused an economic crisis that has left millions unemployed and in particular workers who were in low wage jobs before the pandemic. Bold solutions and robust investments are needed to ensure workers can regain employment. CLASP is proud to support the Jobs for Economic Recovery Act, which will invest in subsidized jobs, job training and crucial supportive services to help connect unemployed and underemployed individuals to stable employment. We applaud Senators Ron Wyden, Chris Van Hollen, Tammy Baldwin, and Michael Bennet for introducing this important legislation and we urge Congress to prioritize the needs of individuals with historic barriers to employment.”
Melissa Boteach, Vice President for Income Security and Child Care/Early Learning, National Women’s Law Center: “Women have been slammed in this recession, with a decade’s worth of our job gains wiped out in a single month. Subsidized jobs are a proven pathway to help marginalized workers earn income, access training, and connect to employment. The Jobs for Economic Recovery Act is an important investment in the families who have been hardest hit before and during this recession, and in the communities where their work will help build toward economic recovery.”
Arnab Datta, Senior Legislative Counsel, Employ America: “The COVID-19 recession is the challenge of our generation. We must pass legislative solutions that match the depth of the crisis. Building on successful subsidized jobs programs from the Great Recession, the Jobs for Economic Recovery Act is an urgent necessity. Even as safety and health restrictions are loosened, it is clear that the job market will be weak well into 2021. Senators Baldwin, Bennet, Van Hollen, and Wyden deserve enormous credit for developing a proposal that puts people back to work, helps marginalized workers develop the skills needed to thrive, and pushes our economy back towards growth. Congress should consider this program as we move forward.”
Melissa Young, Senior Director of Research & Policy, Heartland Alliance: “Our economy will only fully recover if we put forth solutions like the Jobs for Economic Recovery Act that provide real opportunities for people who have been historically left out and left behind to get access to the labor market,” said “To truly heal from historic and current economic inequity, individuals and whole communities need deep investments so that all people can thrive.”
Julie Kerksick, Senior Policy Advocate, Community Advocates Public Policy Institute: “The Jobs for Economic Recovery Act is a bold and urgently needed response to our crippled economy. It is foundational because it allows people to get back to work. It addresses the unemployment that has resulted from the economic crisis caused by COVID-19. The bill also addresses long-term structural unemployment in urban and rural areas. It will especially help workers and communities suffering from racial and ethnic discrimination in training and hiring. We call on Senators and House members to pass this essential bill as part of your next steps in moving America’s economy forward.”
Professor Mark Paul, Assistant Professor of Economics, New College of Florida. “The nation is currently experiencing the worst labor market in living memory. Tens of millions of workers are currently sidelined due to no fault of their own. The Jobs for Economic Recovery Act is vital legislation that will help put Americans back to work as quickly as possible once it’s safe, paving the way for a job-led economic recovery.”