he Economic Mobility Corporation, a nonprofit organization, released an analysis in 2013 that looked at the program’s outcomes in California, Florida, Mississippi and Wisconsin. By subsidizing the hiring of temporary employees, the federal government lowered labor costs and kept some employers afloat through the recession. The program made a measurable difference in the lives of workers, 37 percent of whom performed so well that they were hired permanently after the subsidy period ended.
These promising results suggest that carefully targeted subsidies that place unemployed people into private-sector jobs can be a potent tool in reducing the devastating unemployment in minority areas of big cities where young people are disconnected from work and civic life.
Subsidized work programs have been used to create temporary jobs as far back as the 1930s. The programs typically placed most workers in public jobs that did not involve any connection to the private sector. In the 2009 program, however, a majority of the participants in the four states studied were placed with private businesses.
The program, used in 39 states and the District of Columbia, varied in structure and eligibility requirements but generally sought to give unemployed people real work experience. The study found that subsidized work programs can set people up to earn more money later in unsubsidized employment, perhaps because they give people an actual work credential. Strong evidence of this was found in Florida, where people in the program experienced an average increase of $4,000 in pay from the year before the program to the year after — as compared with an average $1,500 increase for workers in a comparison group who were not in the program.