OLR Report 2014-R-0208 describes the Georgia Works program and similar programs in other states and then answers the questions: Are these programs working? Have they raised any issues or concerns?
Launched in 2003 and scaled back in 2011, the Georgia Works program, which is no longer in service, allowed unemployed individuals to train with an employer for up to eight weeks, at no cost to the employer, while receiving unemployment compensation (UC) and a weekly stipend. This program, and similar ones modeled after it, is different from a wage subsidy program that reimburses employers for a certain percentage of wages paid to new hires (e.g., Connecticut’s Subsidized Training and Employment Program (STEP)). Under Georgia Works, participants train with a company while receiving UC, but are not hired nor paid by participating employers during the course of their training.
When it launched the program, the Georgia Department of Labor (GDOL) said it would be a “win-win” for employers and job seekers by reducing the risk and cost of hiring and helping job seekers gain new skills. The program was initially open only to UC recipients, but was later expanded to anyone who was unemployed (including those who had exhausted their unemployment benefits and continued to look for work and those who had been out of the workforce and were looking to reenter it). This expansion led to fiscal troubles for the program, and it was scaled back and eventually eliminated.
GDOL initially claimed the program was successful, stating that between 2003 and 2010 it put 63% of its participants back to work in 90 days, saved employers almost $15 million, and saved Georgia $6 million. However, several organizations and individuals raised concerns about the program. Labor organizations claimed it violated federal labor laws and displaced current workers. Think tank economists contended that the program was not effective in training job seekers for high paying jobs. Finally, Georgia’s current labor commissioner believes the program lacked the oversight necessary to provide a meaningful experience for trainees.
Several states, including New Hampshire, North Carolina, and Wisconsin have created programs based on the Georgia Works model. North Carolina’s and Wisconsin’s programs, like Georgia Works, appear to be defunct. However, New Hampshire’s program is still in service and appears to have addressed Georgia Works’ oversight-related shortcomings by requiring participating employers to, among other things, develop a training program and have it approved by program staff.
The Obama Administration used Georgia Works as a model for the “Bridge to Work” program included in the 2011 American Jobs Act, which among other things would have allowed long-term unemployed workers (typically those receiving emergency unemployment compensation) to work temporarily with an employer while continuing to receive unemployment benefits (“Bridge to Work” program). The American Jobs Act did not pass, but the Georgia Works model resurfaced in the Middle Class Tax Relief and Job Creation Act of 2012. This act, which became law in 2013, authorizes the United States Department of Labor (USDOL) to approve demonstration projects in 10 states to test and evaluate measures designed to expedite reemployment of UC recipients. States can use administrative funds to implement demonstration projects or apply for a waiver to use Unemployment Insurance Trust Funds for that purpose. According to USDOL, it has not approved any demonstration projects to date.
For more information, read the full report.
