Letter to Mitch McConnell, Senate Majority Leader, and Chuck Schumer, Senate Minority Leader - Baldwin Leads Push for New Employment Program to Help Workers and Businesses Recover from COVID-19

Letter

Dear Leader McConnell and Leader Schumer:

We write in support of Congress enacting legislation to help workers and businesses recover
from the economic devastation caused by COVID-19. Congress has taken important steps to
stabilize the economy in the near term, but we believe bold initiatives are needed to help workers
and businesses recover from the longer-term economic devastation caused by the pandemic.
Subsidized employment should be a central part of our efforts to help Americans transition back
to work.

While reopening the economy is dependent on the spread and risk of the virus, we must prepare
for more lasting impacts on the job market. To that end, it will quickly become necessary to use
every tool available to get individuals back to work--particularly those whose places of
employment have permanently closed or have been squeezed by lower sales or profit margins.
Subsidized employment is one of the most powerful of these tools, because it offsets the cost for
employers--both public and private--to hire workers that the employer would not otherwise
consider for employment, for new positions that would not otherwise exist.

Transitional subsidized employment is a proven, yet underutilized, policy option to address
barriers to employment for unemployed and underemployed individuals in a strong economy,
and its ability to help workers and employers is especially critical in a recovering economy.
When joblessness is high, subsidized employment can quickly provide a paycheck to workers to
help them meet basic needs, while also stimulating economic growth. The effectiveness of
subsidized employment is well established. During the Great Recession, subsidized employment
programs administered by Democratic and Republican governors funded by the Recovery Act's
TANF Emergency Fund rapidly created more than 260,000 jobs as unemployment numbers
soared. The funding stream under TANF was in place through September 2010, allowing states
to provide subsidized employment opportunities to help families and individuals weather the
economic downturn.

Jobless claims have now reached unprecedented levels. The worst may be yet to come. More
than 22 million unemployment claims have been filed in the last four weeks. When it is safe for
the nation to go back to work, not all workers will have their same jobs waiting for them. Many
are likely to continue to be left out of the labor market, despite being willing and able to work.
Federal funding for subsidized employment should be available to provide support for workers
and employers.

We propose a national subsidized employment program to provide unemployed and
underemployed workers wage-paying jobs to reattach them to the labor market. The program
would offset employers' cost for wages and any needed on-the-job training or other supportive
services. Federal funding would enable states and local organizations to scale up or establish
subsidized employment programs that meet the needs of their communities, including by directly
employing subsidized workers in public service and infrastructure jobs.

The program should incorporate lasting structural and countercyclical features, including
technical assistance to support planning and implementation, in order to lay the groundwork for a
permanent program that is flexible enough to expand to meet the needs of unemployed workers
when the economy is weak, and to continue to provide necessary employment support when
labor demand is stronger. This national subsidized employment proposal is informed by the
successful programs that states were able to get up and running quickly during the Great
Recession to place individuals in a wage-paying job.

We urge you to consider this proposal and look forward to working with you.

Sincerely