Here in Mississippi, state officials have come up with a novel approach that they hope will improve the chances that the jobs they create will outlast the subsidies. Labor experts say the experiment is being watched with interest by other states.
The Steps program, as Mississippi calls it, focuses on private-sector jobs. There are limits as to what kinds of work can qualify — no strippers or bartenders need apply. And the program is set up to reduce the subsidy for each new worker over time: employers will be reimbursed for each new worker’s full salary for the first two months of work, and then the monthly reimbursement will be scaled back gradually until it drops to just a quarter of the salary in the sixth month. After that, the employer must pay the full salary.
The program is basically open to almost all for-profit businesses and nonprofit groups, as well as public hospitals, that are in good standing with the state. To increase small-business participation, officials said they were giving priority to employers with 25 employees or fewer, and barring companies where the work force has gone on strike or been locked out. No more than half of a business’s work force can participate.
For now, stimulus money is paying the salary of Edgar Herring, a 49-year-old who lost his job of 18 years when a local lumber company shut down last fall, at his new job on the housekeeping staff at King’s Daughters Medical Center in Brookhaven.
It is also paying the salary of Roger Thomas, 36, who lost his job as a car salesman, at his new sales job with National Collection Systems, a locally owned waste management company in Jackson.
And it is paying Johnny B. McGowan, 59, Curtis R. Williams, 43, and John McCoy, 46, to install metal studs and sheetrock in the old Standard Life building in downtown Jackson, an Art Deco tower being converted to apartments.
The challenge with subsidized work programs is to make sure that the government does not wind up paying for jobs that would have been created without public money, said Richard A. Hobbie, the chief executive officer of the National Association of State Workforce Agencies, which represents state labor departments.
The last big federal subsidized jobs program, signed into law by President Richard M. Nixon, ended during the Reagan administration after critics charged that it was paying local governments for jobs they would have filled in any case.
If the idea of subsidized jobs is seen as liberal in some circles, it seems to have bipartisan appeal at the state level. Gov. Haley Barbour of Mississippi, one of the nation’s most prominent Republicans, said he saw the state’s program as being in the spirit of the welfare overhaul.
“It’s welfare to work,” he said.
The state can spend up to $43 million on the program, which officials estimate could create as many as 3,500 jobs — the equivalent of several factory openings, but only a small dent in the problem for a state that had 133,000 unemployed residents in December. Only a few dozen workers have been hired since the program began last month after receiving federal approval.
Mississippi’s decision to pay for jobs in the private sector means that the public is paying to create jobs that will provide little public benefit. But Mr. Barbour said he believed it to be the best way to improve the economy.
“The real economy that generates jobs generates private-sector jobs, from whence come taxes and quality of life for people,” he said in an interview in his office in Jackson. He added that he believed it would be self-defeating to try to spur economic development by using taxpayer money to create more public-sector jobs. “That’s like a dog chasing its tail, except sooner or later there’s no tail left,” Mr. Barbour said.
Now the problem facing Mississippi and other states is the calendar: the welfare money in the stimulus bill must be in the process of being spent by the end of September. Mr. Barbour said he hoped the program would be extended so more jobs could be created.
For the workers, there is another deadline: six months from now, when the subsidies wind down. But Wanda Lindsey, 39, who was hired to help a Jackson construction firm, Garrett Enterprises, manage projects and bid on new ones, said she expected to more than pay for herself.
“I fully intend to make them a lot more than that in the first six months,” she said.