Right Now Is a Great Time for a National Subsidized Employment Program
When people don’t have jobs, the government can provide subsidies to organizations to enable them to employ workers. The country’s most significant commitment to subsidized employment was in response to the Great Depression when the Works Progress Administration provided work for 8.5 million people. The Civilian Conservation Corps, another Depression-era jobs program, employed nearly 3 million more young men.
Subsidized employment most often comes to people’s minds during times of high unemployment, but it’s also beneficial when the national unemployment rate is as low as it is today. The low national unemployment rate, because it’s a national average, hides a great deal of variation. For example, in the first quarter of this year, the national unemployment rate was 3.5 percent. However, it was twice the national rate in the Bronx. It was three times the national rate in Flint, Michigan and Magoffin County, Kentucky. It was four times the national rate in Porterville, California. There are many, many places that still have high rates of joblessness when the national average unemployment rate is low.
It’s not only places; particular groups can also suffer from disproportionately high unemployment even when the national rate is low. The Black unemployment rate today is historically low for Black people. This is a positive development, but the Black unemployment rate continues to be about twice the white unemployment rate. White America would not be satisfied if the white unemployment rate were as high as the Black rate is today – and neither should Black people. Additionally, the American Indian unemployment rate is about twice the white rate, the unemployment rate for people with disabilities is about twice the national average, and the unemployment rate for teens is three times the national average.
A national subsidized employment program targeted to places experiencing high rates of joblessness can remedy these disparities. A targeted subsidized employment program is highly efficient at reaching the populations with the most disadvantages during periods of low unemployment. The communities with high rates of joblessness today have been structurally disconnected from the national economy. A targeted subsidized employment program is one tool for reconnecting these communities to economic prosperity.
Well-designed subsidized employment programs can pay for themselves. The Georgetown Center on Poverty and Inequality identified eight rigorous cost-benefit evaluations of programs with benefits that exceeded costs. A recent evaluation of the Rapid Employment and Development Initiative, a subsidized employment program focused on preventing gun violence in Black neighborhoods in Chicago, found that the program provides about 10 times as much in benefits as it costs. If we wish to help the most disadvantaged populations in the country and build a more prosperous economy, right now is the time for a targeted subsidized employment program.
By: Algernon Austin (he/him)
Director, Race and Economic Justice, Center for Economic and Policy Research
