Michigan leads way on helping long-term unemployed

August 21, 2013
Michigan Gov. Rick Snyder
Michigan Gov. Rick Snyder (R).

There was just one month between 1948 and early 2009 in which job seekers out of work the longest accounted for more than one in four unemployed Americans. But then the recession hit.

Since then, the share of the long-term unemployed—job seekers out of work for 27 weeks or more—skyrocketed. At 37 percent, that percentage is slowly sliding back down, but it remains stubbornly and historically high. And it’s one of the jobs recovery’s toughest problems. The long-term unemployed suffer disproportionately to those out of work for short periods of time, seeing a lasting toll on their finances, mental health and career prospects.


Source: Bureau of Labor Statistics

It’s a national problem but it’s one with solutions being tested at the state and local levels. In Michigan, for example, one pilot program is wrapping up its first year and has connected jobs with 923 people most in need of them.

The program, Community Ventures, began as a bullet point in a speech by the state’s Republican Gov. Rick Snyder in March 2012 and was fired up that October. The idea was to improve safety and boost economic growth by connecting the “structurally unemployed”—the long-term unemployed, those who lack necessary skills or are at-risk of criminal behavior—with good, ideally permanent jobs. As such, it started with a focus on four cities including Flint and Detroit, the two most violent cities in the nation.

“The idea is you promote employment, you promote social enterprise and economic activity… and in doing that you’ll also promote safe and vibrant communities,” says James Durian, who directs the program.

A typical placement starts with a willing employer like Lapeer Plating & Plastics, a manufacturer just outside of Flint. Community Ventures then offers up a pool of job-seekers assembled with the help of local non-profits and similar organizations. Community Ventures works with each hire for up to a year, hooking them up with other local organizations to assist with anything from clothing to transportation to daycare to financial literacy education.

In the case of Lapeer, the company hired 16 people in May, but the new hires didn’t have an easy way to get to work. Community Ventures helped by providing private transportation for a few weeks while it worked with the local transit agency to get a bus to pick them up. Once more people in the community got jobs with Lapeer, the transit agency was able to justify adding a new stop on an existing route. Now Lapeer employs 65 people found through the program.

Snyder’s goal was to get local companies to hire 1,000 people in the program’s first year, with up to $5,000 in wage reimbursements for each hire. So far, CV has placed 923 people with an 87 percent retention rate and an average hourly wage of $11.53.

In his budget proposal this year, President Obama called for $4 billion in state grants to be used to help get the long-term unemployed back to work through such programs. And Minnesota Sen. Amy Klobuchar, the top Democrat on Congress’s Joint Economic Committee, held a hearing on the issue in April. But it’s a bipartisan issue, too. At that sparsely attended hearing, Kevin Hassett, a former adviser to Republican presidential candidate Mitt Romney, described long-term unemployment as a “national emergency.” Yet the federal government has passed few fixes to the problem.

Republican-controlled Michigan isn’t alone in deploying such programs to address the problem. In blue New York, Gov. Andrew Cuomo launched a similar program late last year. That effort, Reemploy 2012, is like the Michigan program but in reverse. Rather than start with employers, a mobile team travels to libraries, schools and community centers in areas with high unemployment to help job-seekers by offering advice on resumes, LinkedIn profiles, interviewing, the labor market, and other opportunities.

Two years ago, President Obama singled out yet another state-level effort aimed at getting the long-term unemployed back to work:

“There is a smart program in Georgia.  What they do is they say, all right, instead of you just getting unemployment insurance, just a check, what we’re going to do is we will give a subsidy to any company that hires you with your unemployment insurance so that you’re essentially earning a salary and getting your foot in the door into that company.  And if they hire you full-time, then the unemployment insurance is used to subsidize you getting trained and getting a job. And so those kinds of adjustments to programs — we’ve got to be more creative in terms of not doing things the way we’ve always done them.”

And in Connecticut, a similar program was featured in a “60 Minutes” segment last year. That effort, Platform to Employment, has been so successful that it’s already expanded to four cities nationwide, with six to follow by year’s end.

There may be no comprehensive federal solution, but that doesn’t mean programs aren’t being tested in the states.

Niraj Chokshi reports for GovBeat, The Post's state and local policy blog.
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