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Georgia’s Celebrated No-Cost Labor Scheme: Cheating the Jobless?
For a typical boss, there's only one thing better than getting away with not paying your workers: getting the government to supply you with people who will work for free. It's an employer's dream that may soon become reality around the country, as President Obama has moved toward incorporating it in his emerging job-creation agenda.
The job-creation flavor of the week is GeorgiaWork$, a job program that has for several years funneled unemployed workers into job slots as "trainees." Under this half-internship, half-indentured servitude scheme, a worker can earn a $240 weekly stipend on top of regular unemployment benefits for eight weeks, working 24 hours per week. Unlike other job subsidy programs, which use generally use public dollars to supplement workers' regular earnings, GeorgiaWork$ allows the state to capitalize on existing unemployment payments while giving a free boost to private employers. Workers, often hired in service sectors like child care and restaurant work, can only hope that their bosses will hire them after their preliminary test run ends.
This system fits well with Obama's anti-spending, quasi-pro-stimulus double-speak, and his forthcoming jobs plan may include a federal version of Georgia's virtually free labor system.
While there may be many desperate people ready to forfeit labor standards for any form of paid work, the Huffington Post reports that so far, the program doesn't seem to live up to its promise of sustainable job growth:
From its 2003 launch to the end of 2010, some 30,866 trainees entered the program, according to data provided to HuffPost by the Georgia Department of Labor. Of that total, 5,089 workers -- 16.4 percent -- were hired by the company that trained them during or at the end of the training period. (The department says that among workers who completed the full eight-week training, the employment rate is 24 percent.)
How does this success rate stack up to the overall rate at which once-unemployed Georgians have gone back to work? It's probably in the same ballpark.
Census Bureau data show that in 2007 and 2008, 15 percent of Georgians who'd been out of work for six months or longer found work within one month of a survey, according to Jesse Rothstein, an associate professor of economics and public policy at the University of California at Berkeley. In 2009 and 2010, the number fell to 10 percent.
Legally speaking, as we reported last year, GeorgiaWork$ might chafe against federal regulations on training employment versus regular work. Under Labor Department rules, vocational training programs must ensure that "The training is for the benefit of the trainees," "The trainees do not displace regular employees," and that "The employer... derives no immediate advantage from the activities of the trainees."
The National Employment Law Center points out the Georgia Work$ model, which has been replicated in several other states, makes it too easy for employers to cross the line from education to exploitation.
NELP staff attorney George Wentworth told NPR:
The activities that the workers are engaged in are basically employment, which means they should be entitled to the minimum wage and should not be working off their unemployment insurance benefits.
There are other ways the government can connect people to the labor market without creating a separate tier of underpaid workers. One approach with proven results is a program under the TANF Emergency Fund that used federal stimulus funds to subsidize wages in the private sector. The system “[p]laced more than 260,000 low-income adults and youth in paid jobs during a time of high unemployment” while helping participants build real skills, according to a report by the progressive think tanks Center on Budget and Policy Priorities and CLASP.
The program could have helped many more families if it hadn't expired last September. GeorgiaWork$, on the other hand, seems to be sputtering even in its short-term mission of supplying a cheap temporary workforce. According to Huffington Post:
Enrollment in the program slowed drastically this year after the state labor department cut the stipend from $600 to $240 and restricted access to only those workers receiving unemployment benefits (it had been opened to nonrecipients in 2010). As of this week the program boasts just 19 trainees.
In other words, although GeorgiaWork$ looks like a steal for employers who want cheap labor, when it comes to helping people make a dignified living, there's no free lunch after all. Maybe the unemployed aren't as desperate as officials hoped; they might have just enough pride left to insist on an honest day's pay for an honest day's work.
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19 Comments so far
Show AllMore corporate welfare.
I'm collecting unemployment. I don't mind being asked to work. I do mind being asked to work for free for someone making a profit. Since public sector jobs are being cut back, why don't they ask us to fill in there? PA governor Corbett has slashed funding for our state parks, previously rated best in the nation. Why don't they tell me to do something there? Our DEP doesn't have the manpower to investigate all the complaints of fracking contamination. Ask me to do it.
Well ... that would be just too FDR-like for the GOP/teabaggers.
I work at a Canadian public university, and have no doubt that our provincial government would just LOVE to take my job and dole it out to two or three part-timers at lower (or no) pay without the benefits (pension, paid vacation and sick time, extended medical, short- and long-term disability, and some degree of job security) that my union has fought so long and hard to achieve.
And if you think profit isn't involved, consider that our stagnant wages (less than 4% in 15 years) allow the government to keep taxes on corporations and the wealthy at historic lows without much discernible effect on the public. We work harder, for less, because we care not only about our students while they are in school, but also about the jobs that will be available to them when they enter the work force, start families, and age. And we do this knowing that if we strike or work-to-rule in protest, the students will also protest - against US.
My last real job was doled out to two part timers. For the past 5 years the only jobs I've had were ones that were created by parting out someone else's job. I have 9 months until social security. Hope it's still there.
Why wait to be asked??? You ask them!!! You will be providing a needed service as well as gaining experience and showing that you aren't sitting around waiting for a hand out. Take the initiative!
Taking the initiative is how I ended up being 61 and unemployed. "gaining experience"? Get real. I've been labeled "over experienced" more times than I can count. "Sitting around" ? You need a dose of reality.
While working for the Pennsylvania unemployment compensation agency, aka "Job Centers" from 1981 to 2009, I was present at the inception of increasingly bogus and half-assed programs and service-delivery methods like "Georgia Works".
While it's true enough that the state unemployment agencies had to change fundamental, traditional approaches to benefit programs and re-employment assistance to reflect the disintegration of Amerika's manufacturing base and labor markets, it also implemented pathological "fixes" in violation of the maxim, "if it ain't broke, don't fix it".
Actually, to be fair, the poo-bahs and administrators justified this on the grounds that it WAS broke, i.e. that the political climate had shifted to create a permanent drought to "entitlements" funding.
Instead, beginning with the Republican-Lite, DLC-sponsored Clinton Administration, the transition from the superficially Compassionate State to the Hollow State was begun in earnest; dedicated federal funding was replaced by a patchwork system of "block grants" that forced state agencies to jump through hoops and implement horrific "innovations" such as closing field offices and switching to Internet-based services, electronic-sweatshop claims call centers, etc.
"Georgia Works" reminds me of another tragic farce Pennsylvania called the "Self-Employment Assistance Program", or SEA.
I don't know if it's still in effect, but SEA was tacked on to the unemployment compensation program. The vaguely conservative rationale was that since real jobs were scarcer and scarcer, laid-off employees should be encouraged to become entrepreneurs, i.e. go into business for themselves.
As with all such scams, the program was launched with high-flown rhetoric; it was touted as a post-"handout" approach, in accordance with the maxim beloved by proponents of rugged individualism: "Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime."
Claimants who applied to SEA were required to present a proposal to start their own business. If they were accepted into the program, they got a sketchy orientation and "workshops" to "train" them to run their small business.
They DID receive the equivalent of their weekly UC benefits while doing so. But SEA participants were excluded from receiving extended benefits, for technical reasons not worth explaining here.
Worse yet, this program did NOT entitle participants to preferred funding or access to loans, i.e. "seed money" to prime the pump of
their self-employment project. They might as well have dropped off SEA participants naked in the woods except for a pair of bootstraps.
The only "breaks" I remember was that any income or revenue generated by their new self-employment would not reduce their benefits. Also, they were temporarily exempt from the laws and regulations that normally disqualify claimants who engage in self-employment.
Trust me, there were no accidental "windfalls" resulting from these grudging stipulations.
All in all, it was pathetic. There may have been one or two SEA "success stories" in the entire state, probably trumpeted in local media or in agency press releases and newsletters. But, as with many hopeful entrepreneurs, most of the SEA participants' self-employment projects sank like a stone.
And despite the "fine print" contained in the initial agreements and informational literature, SEA participants had NO idea that by joining this program, they were giving up rights to federal extended benefits that they otherwise would've received.
I wasn't one of the ones responsible for directly servicing SEA applicants, but I know that a few compassionate interviewers went out of their way to surreptitiously warn prospective applicants of these economically lethal booby-traps and pitfalls.
But even that's a tricky, risky business, because unofficially discouraging the public can backfire. A suspicious or paranoid claimant sometimes understandably jumps to the conclusion that a low-level flunky is trying to cheat or deprive them of a worthwhile opportunity, etc., and complains to management.
And discouraging applicants from participating in any agency program is a dischargeable violation of policy.
Sorry for the tedious anecdote, but I flashed back on the SEA debacle when I read about this "Georgia Works" scam. It's another case of a scandal and an outrage disguised as social-service progress.
It's one of the things that makes me deeply skeptical of political or bureaucratic pseudo-solutions hyped as "innovations".
I was unemployed in PA in 2007. I was encouraged to go to the SEA. All I got was advice and the advice was what I already new. It was a waste of time like all the interviews they sent me on.
I am again unemployed. There is no SEA this time. If I try to become self employed, I loose all benefits.
We had "welfare reform". Now we are moving on to "unemployment reform". We can only hope soon to have "living in a tent on the riverbank" reform as the USA slowly grinds to a halt.
Why are we enslaving Americans? Bush/Obama have used our tax money to conquor Iraq, Afghanistan and Libya. Why not enslave their populations and bring them here as servants for the American people. This is no more illegal than wars of agression and torture is and it would make Corporate Republicans happy.
Keep in mind that the privatization of prisons also produces a similar effect. In some communities, the one and only major industry (or factory) makes use of convict labor, and thereby pays pennies on the dollar.
Imagine what would happen if these convicts were given the right to minimum wage salaries, and that money went back to the families "left behind." That, in and of itself, might help offset things like Welfare and Food Stamps... or give their children better odds of not ending up similarly incarcerated.
Meanwhile, sociopaths like the Koch Brothers fund think tanks that devise ways to take yet more benefits away from average working people; that is, when they're not demonizing unions.
Scams R' U.S.
We have to pay CEOs enormous sums to retain such brilliant job creators but we can pay the working class s---! Well back at you business interests.
In a few more years this sort of deal will seem like the "opportunity of a lifetime" for an awful lot of people. Our Corporate Overlords couldn't be happier!
"In other words, although GeorgiaWork$ looks like a steal for employers who want cheap labor, when it comes to helping people make a dignified living, there's no free lunch after all. Maybe the unemployed aren't as desperate as officials hoped; they might have just enough pride left to insist on an honest day's pay for an honest day's work."
Or perhaps workers are smart enough to know that $240.00 is not enough to pay for the expenses of getting to work, especially if childcare is needed.
There have been a number of employer incentivizing programs tried in Canada. The problem is that usually it's only one grant per worker and then employers are on to another worker who can bring a grant, limiting potential jobs for the still unemployed original participants. I went to many interviews where the first question was could I qualify for a government grant to pay half my wages. Prisoner labour does the same thing, undercutting local businesses who have to pay going wages and reducing available jobs. Both are a form of economic canibalism.
Thanks to all those who post critiques of scams such as this; thanks in particular to Obedient Servant for his story here. And its always nice to read Siouxrose as well.
In self employment it's the profit (and not the gross income) that is the actual income. From both experience and from knowledge I can tell everyone that profit from self employment takes anywhere from 5 to 25 years to appear assuming it ever will. Aside from having enough money for the business itself, the self employed person has to have money to live on during all of those years.
In a quasi or full scale depression, there will never be substantial profit from almost all small business start-ups. In a depression situation someone can offer a service for free and get essentially or literally no demand! There are millions offering their services for free right now as I write this but there are no takers. If there is no demand there is no demand, regardless of price.
Furthermore, numerous mostly state laws and regulations protect the wealthy from having to compete with start-ups. Most start-ups have to keep their fingers crossed that they won't be noticed and then penalized out of business by these state laws and regulations that protect monopoly capital.
So even in normal times self employment is no solution to unemployment. And in depression times directing someone to self employment is nothing more than an insult.
The only known and proven ways out of massive unemployment in a depression are found in “left wing economics” which is forbidden in the States.
WHY does their have to be a gov't program that gives a stipend no less over and above unemployment benefits. Not necessary and adds needlessly to our growing deficit. My son was unemployed for over a year and altho a college graduate he wanted to change career paths and 'apprenticed' at no pay in a kitchen in an Italian restaurant learning to cook professionally. He initiated this on his own in the hopes that it would eventually land him a paid cooking job which it did although it took 7 months and also another stint (unpaid) as a manager and cook in a small cafe. He gained invaluable experience and job skills and worked long hard hours to reach his
goal - but he did it without a gov't program holding his hand AND paying him -
which would have ultimately enabled him to rely on the gov't to take care of him.
And yes the two restaurants did benefit from his unpaid labor but that was his
choice. We are becoming a society where some people are sitting back and waiting
for what they believe is their right - to be taken care of! Granted there are times like now where the unemployed need some extra help but why why why does it always
mean yet another expensive gov't program and why more regulations on businesses
that will deter them from participating in these innovative programs. People need
help at times but they don't need to be babied - some people need to be treated
like the adults that they are - or should be. And please don't accuse me of being a 'troll' or whatever you call commentators who don't fit your mold. It gets a bit long in the tooth to have to read the cookie cutter drivel that passes for debate sometimes.
I admire your son's fortitude in trying to follow his dreams. But just a question: during this time of no paychecks, who was providing housing and incidentals? I assume (I know, never assume) that he did without health insurance (being young and carefree as we all were once -- hah!) and that he did not have a family to provide for. And what if he weren't a college graduate? Would employers have been so avid to take on your son's desire to change career paths, however noble and deeply felt it was?
Like I have been saying; America's first black president moves to reintroduce slavery.
Great move Obama!