For businesses that might want to hire some new workers on the government’s dime, a little-known Los Angeles County program could prove a valuable resource – but time is running out.
Since April 2009, hundreds of area businesses have been signing up for a county jobs program funded by federal stimulus dollars. The program takes low-income job seekers, most of them in the state’s welfare-to-work program, and pays them $10 an hour to work for local companies.
But the program is scheduled to expire at the end of September, which means employers will have to pick up the salaries or let the employees go. That, plus the fact that organizers have already created 8,500 out of an initially planned 10,000 jobs, means that the door is quickly shutting for businesses that want in.
Just last week, organizers discussed whether or not to cap new businesses from enrolling but decided against it. However, the program will stop placing employees as of June 30, said Dustin Stevenson, business development coordinator at the South Bay Work Investment Board, which runs the program.
“(New) businesses need to know that, as it stands now, they are at the end of a long line of employers who are enrolled, and they may not get somebody,” Stevenson said.
As part of the federal stimulus bill, the county was awarded about $160 million in 2009 for its Transitional Subsidized Employment program. Non-profits, public agencies and businesses of all sizes have enrolled. Some employers take one or two people; some 20 or 30. Employees have worked as park rangers, in manufacturing and restaurants, and in a number of other industries. Companies are required to provide training and supervision worth 20 percent of the program’s costs.
Rosie Abramyan hired three workers to help out with marketing for Modaa Inc., a Sherman Oaks green construction company she started with her husband in 2008. She said the hirings have been instrumental during the downturn.
“Absolutely, are you kidding?” she said. “I hate hearing myself say this, but I don’t think the business would have come where it has if it wasn’t for this program.”
Every two weeks, Abramyan holds a training session for her stimulus-funded hires, covering everything from construction terminology to government contracts. The goal is to bring them up to a level of competency that will allow her to keep them without the funding – but she is not sure it will work out.
“If I’m faced with the sad story of having to do this alone again and grow at a very, very slow pace, at least they’ll be ready enough to go work somewhere else,” she said.
Organizers claim that the county’s program has created more temporary jobs than any similar program nationwide. But with less than four months to go, they’ve spent only $54 million out of the roughly $160 million that was allocated.
Still, organizers say that most of it will end up being used. At least $50 million could be needed just to keep the payrolls going through September, while an additional $38 million has been allocated for summer youth employment.
“But it doesn’t really make sense to really push the limit of that exactly,” Stevenson said. “You want to make sure you have enough funds to cover funds for full-time work until September.”
Lack of advertising
Organizers estimated there will be $15 million unspent at the end of September. The process of getting workers on the program’s payroll started out slow, because it took a while to inform employers of the program.
“We had the infrastructure in place,” Stevenson said, “but to be frank, we didn’t have a tremendously robust advertising budget.”
County Supervisor Don Knabe, who helped spearhead the program in the beginning, called it a success, citing the thousands of jobs it’s created. He said whether or not the county is able to spend all the stimulus money will depend on whether more businesses participate.
“This was a short-term turnaround on the whole program,” Knabe said. “We may have a lot of money left, but spending $54 million that quickly is good.”
Because each county has had so much autonomy in running its own programs, it’s been difficult for state officials to ascertain the effectiveness of the program statewide.
California Inspector General Laura Chick, the former controller for the city of Los Angeles, said she is looking into how such programs in counties throughout the state have spent their money. But she said she does “not have enough information yet to have an opinion” on their effectiveness.
“I’m most interested to find out about the successes of the program (statewide) and if there are any lessons to be learned,” Chick said. “The program and its goals were certainly well intentioned.”
With California’s unemployment rate hovering above 12 percent, both organizers and businesses hope that the jobs program will be extended beyond September via federal legislation. A provision to do so was inserted but then removed from a congressional bill earlier this year.
“If I were pressed to bet, I would guess it is extended, because 90 percent of the people who learn what this is about and participate say, ‘Wow, this is stimulus money that is really working,’” Stevenson said. “A lot of criticism we’ve heard about the stimulus is that it isn’t something people can tangibly feel, but I think this is a program that helps businesses and helps job seekers.”
Extending the program would also allow the county to use any leftover stimulus money, instead of returning it to the federal government, he added.
Employers interested in hiring a subsidized worker can visit EmploymentStimulus.org or call (310) 970-7700.
