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  • Report: Subsidized Job Systems Cost-effectively Decrease Unemployment and Poverty
    Posted On: Apr 16, 2016

    By JoAnne Powers, April 18, 2016

    A new report from the Georgetown Center on Poverty and Inequality  finds that subsidized job programs can be a cost-effective way to decrease persistent unemployment and combat long-term poverty.  Indivar Dutta-Gupta, Director of the Project on Deep Poverty and a Senior Fellow at the Center, co-authored the report:

    [Indivar Dutta-Gupta]: “These initiatives can actually reduce family public benefit receipt, improve school outcomes and educational outcomes, both among the children of workers and the workers themselves, lower criminal justice involvement again both among the children of workers and workers themselves…as a result, in some cases, can actually save taxpayers money.  It is a dramatically underutilized strategy for helping workers who face barriers to employment including people with criminal records, single mothers, people with disabilities and especially many communities of color.”

    The report looked at about 40 subsidized employment programs over recent decades.  Dutta-Gupta cited Milwaukee’s mid-90s New Hope Project for Children and Families, as demonstrating that these programs can result in dramatic savings

    [Indivar Dutta-Gupta]: “The program saved so much money alone just from helping young boys whose parents participated in the subsidized employment program with extensive wraparound services that it more than paid for itself through that mechanism alone, reducing the juvenile justice system involvement of those young boys.  Those systems are extremely costly to society not just directly and immediately to taxpayers, but in how they all-too-often trap and perpetuate poverty, sometimes intergenerational poverty.  So, to have an intervention that helps parents with their economic security and stability, and, sort of as just a side-effect, significantly reduces our spending and the often-unfair interaction that many young boys might have had with the juvenile and criminal justice system is really quite striking and important as we think more broadly about ensuring that people who grew up with disadvantaged backgrounds have a fair shot in adulthood at securing a middle-class or better lifestyle. ”

    The report makes broad policy recommendations, including that subsidized employment programs should not be used only during recessionary periods:

    [Indivar Dutta-Gupta]: “We have a need for these programs throughout the business cycle.  They have shown that they can be effective whether or not the economy is expanding or contracting, so we think that there’s a need for a much more permanent subsidized employment program and in particular a dedicated and substantial funding stream.  Subsidized employment should be part of the arsenal of strategies that we deploy to address rising income inequality, and it is one that we think receives insufficient attention and is dramatically under-invested in.  In many cases, it’s a win for workers and their families, a win for employers and a win for taxpayers and the government.”

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