Georgia Works, Isn’t

August 26, 2011 10:59 am

by saba · 2 comments

The state jobs program, Georgia Works, was mentioned today in POLITICO’s Morning Money daily email.

HOW HAS ‘GEORGIA WORKS’ WORKED? - White House officials have floated launching nationwide a job-training program from the Peach State. Georgia Works enables the unemployed to draw benefits while getting trained by a potential employer. Zack Abrahamson dug into the numbers for M.M. His findings reveal the extent of the desperation among the jobless for getting back into the workforce.

So far this year, 1,400 people have participated in the program. Employers hired just 197 of them. That translates into a 14% hiring rate, meaning it’s harder for participants to land a job than high school seniors to get accepted at Cornell, Georgetown or the University of Chicago. Since the program launched in 2003, 17.3% landed jobs.

Participation in the program has largely collapsed this year because of financial issues. Enrollment had ballooned in fall 2010 after Georgia relaxed eligibility requirements and doubled a weekly stipend. Monthly program costs quintupled over three months, hitting $2.2 million in December. The state had projected $4 million in stipend expenditures for the entire fiscal year – which ran from July 2010 to this past June.

So Georgia cut back the stipend and restricted access to those collecting unemployment benefits. The state stopped marketing the program “as much as had been done in the past,” said Sam Hall, the state labor department’s communications director. “We didn’t push it.” Hall also said the pool of eligible participants may have declined as jobseekers exhausted unemployment benefits.

 

Is the White House seriously considering this as a shell for a  national model?

freebird August 26, 2011 at 12:12 pm

With such a small stipend, it’s hard to see how the costs to the state could really get that out of control, but I think the more important question that needs to be asked here is does this program, as designed, actually address a labor market problem.

As I see it, the reason the labor market does not “clear” as easily as the market for other goods and services, is that there is a mismatch between the skills and talents of the labor force and what employers need at a given point in time. Generally, this is because the economy is always going through some amount of structural change, sometimes slowly, and at other times more rapidly. The question for any program like this is how effective is it in closing the skill/talent gap between the unemployed and what employers need.

I think on-the-job training is quite valuable, but the complexity of work in the service sector continues to increase over time, as the simple work gets automated, so eight weeks of part-time work/training is not really going to cut it. Individuals with obsolete skills would probably be better off enrolling in a technical college to get new skills and working as a co-op / intern for a couple years while they complete their new degree. Rather than a direct stipend, the state could subsidize student loans for this purpose. Granted that already exists at the Federal level, but perhaps it needs to be expanded, specifically in the vocational/technical areas. This always seems to be discussed during political campaigns, but then you don’t hear about it much afterwards for some reason.

CobbGOPer August 26, 2011 at 1:28 pm

This program was a way for employers to get free “interns” essentially, to be used for the max amount of time they could before cutting them loose and bringing in another batch. My question is whether the participating companies got any other perks from this program, such as tax breaks, aside from the taxpayer-subsidized labor?

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