President Obama is planning to introduce new ideas for job growth in a speech he will give in early September.
The job package will hopefully spur the economy to help some 14 million unemployed Americans get back into the job market. The focus will be on the 6.2 million who are considered long-term unemployed, or out of a job for six months or more.
Hiring is the name of the game with plans on introducing even more tax cuts and new infrastructure spending from the President. However, Republicans are up in arms about putting any more strain on the national debt, so it remains to be seen how much support Congress lends to such a plan.
Companies that hire new workers will likely benefit most from the tax breaks as the White House has shown particular interest in a state program called Georgia Works, which encourages those receiving unemployment insurance to “work” for the money. Under the program, workers continue to collect unemployment benefits, plus a small stipend to cover transportation and other expenses.
After eight weeks of training at a participating company, the person may be offered a job. At the very least, the experience can amount to a free tryout and something to put on a resume.
This helps reintroduce the unemployed to the workforce as well as utilizes the unemployment money more efficiently.
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Since its inception in 2003, Georgia Works has involved more than 16,500 companies and 32,000 people. Almost 25% were hired by the company they trained at and over 60% found some sort of employment.
While unemployment insurance is certainly valuable, a national version of Georgia Works can pose numerous problems especially with regards to overseeing the program so that it is not abused, which unfortunately is not a foreign concept to our country.
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On that note, a government funded paid training program may cause employers to cycle through the hopeful jobless participants and exploit them for their free labor with no intention of hiring.
Since these people are only training and not considered employees, they do not receive minimum wage or benefits.
As the state of Georgia has demonstrated, this type of program would probably most benefit if it is state-run, which would result in more attentive oversight and regulation. Clearly something must be done to focus the aid on the long-term unemployed. These people are discouraged and oftentimes their skills need to be updated to make themselves more marketable.
Congress should rather focus on big picture programs that determine which economic sectors are weak and where there exists a glut of skilled workers. Those out of a job for a while need to prepare to reenter jobs in their field, as the market is constantly changing.
The government must find out what businesses need and then educate applicants on how to fit that description.
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