Bridge To Work: Obama's Plan For Long-Term Unemployed
WASHINGTON -- President Obama announced Thursday evening a plan to put the long-term jobless back to work by encouraging states to adopt "Bridge to Work" programs that would let businesses try out workers without having to pay them.
The scheme, which would only be open to workers receiving federal unemployment benefits, would be modeled mainly on a Georgia program designed to reduce hiring costs and make it easier for the jobless to get back to work. The program, called Georgia Works, is voluntary for workers and employers and allows businesses to train workers for eight weeks with no obligation to pay or hire.
"We have to do more to help the long-term unemployed in their search for work," President Obama said while addressing a joint session of Congress. "This jobs plan builds on a program in Georgia that several Republican leaders have highlighted, where people who collect unemployment insurance participate in temporary work as a way to build their skills while they look for a permanent job."
Labor advocates have warned the White House to stay away from Georgia Works, complaining that it is exploitive and possibly illegal. A senior administration official said the White House is sensitive to those concerns. "We have made it very clear that states must ensure compliance with the Fair Labor Standards Act," said the official, who spoke on condition of anonymity.
Bridge to Work programs would be different from Georgia Works in several ways. Under the Obama proposal, states would be required to ensure participants earn no less than the minimum wage. So if a jobless worker's unemployment insurance benefit amounted to less than the minimum wage, states would have to boost the benefit.
Bridge to Work programs would only be open to jobless workers who've exhausted the standard 26 weeks of state-funded benefits and become eligible for the federal Emergency Unemployment Compensation program, which provides up to 53 additional weeks of aid. The EUC program is set to expire in January; the administration is pushing for Congress to reauthorize it through 2012 as part of the "American Jobs Act," which would include funding for Bridge to Work and dozens of other initiatives.
Republicans controlling the House of Representatives have signaled support for a program modeled on Georgia Works, but they've also said they'd oppose another reauthorization of federal unemployment benefits if the cost added to the federal budget deficit.
"If the millions of unemployed Americans stopped getting this insurance, and stopped using that money for basic necessities, it would be a devastating blow to this economy," Obama said. "Democrats and Republicans in this Chamber have supported unemployment insurance plenty of times in the past. At this time of prolonged hardship, you should pass it again -– right away."
Money for states to administer Bridge to Work programs would come from a $4 billion "Reemployment NOW Fund" that would also support a range of reforms, including wage insurance, startup assistance, improved reemployment services, and work-sharing.
There isn't a ton of data on Georgia Works or similar programs in other states. But there's plenty of data testifying to the magnitude of the long-term unemployment crisis: According to the Bureau of Labor Statistics, 6 million people have been out of work for six months or longer as of August, and 2 million have been out of work for longer than 99 weeks -- the cutoff point for federal jobless benefits in the hardest-hit states.
States that decided to adopt Bridge to Work initiatives would have some flexibility. Training periods could last as long as eight weeks or be as short as two weeks. Businesses could train participants for up to 38 hours a week (Georgia Works limits training to 24 hours a week). States could also require participating employers to pay a portion of workers' earnings.
"We're going to deem these [Emergency Unemployment Compensation] benefits wages and provide support for states to top up benefits if necessary to comply with the minimum wage," the official said. "If states want to structure programs so employers have skin in the game, we’re not going to stop them."
Participants in the program will be covered by workers' compensation laws. As the FLSA requires, states will be required to prevent businesses from using trainees instead of hiring new workers, and businesses will not be able to use Bridge to Work participants if a strike is in effect or if doing so would violate a collective bargaining agreement.
This story has been updated to include remarks from President Obama.
Arthur Delaney is the author of "A People's History of the Great Recession," HuffPost's first e-book.