Using federal money, California counties have put to work more than 35,000 people by subsidizing their employment for up to a year. A bid to extend the funding is stalled in the U.S. Senate.

By Alexandra Zavis and Rong-Gong Lin II, Los Angeles Times
September 29, 2010

Michael Beightol has 12 years of retail experience, but that was no help when he was looking for a job earlier this year.

“I must have put in 1,000 applications or more, and no one was hiring because of the economy,” said the 34-year-old Covina resident, who is raising an 8-year-old daughter on his own.

His luck changed when Los Angeles County offered to pay his salary at Americal Contractors Corp., a small, veteran-owned painting firm in Pomona that is teaching him a new career as an estimator.

“I’m so happy that they had this program, because I feel like I am being a productive part of society instead of sitting at home doing nothing,” Beightol said.

Using funding from last year’s $787-billion stimulus bill, California counties have put to work more than 35,000 people by subsidizing their employment for up to a year, according to figures from July. Many of those jobs are now in jeopardy unless Congress extends the funding beyond Thursday, the end of the fiscal year.

The American Recovery and Reinvestment Act of 2009 created a $5-billion fund that states could tap to cover the additional costs of their swelling welfare rolls, including paying the wages of low-income parents and youths hired as trainees at government agencies, nonprofit organizations and private businesses. Federal officials said 38 states have used the fund to create about 250,000 jobs.

“This program has succeeded beyond our wildest expectations,” said David Hansell, acting assistant secretary of the Administration for Children and Families, part of the U.S. Department of Health and Human Services. Hansell was in Los Angeles this week to tour Modernica Furniture, which has eight subsidized workers.

He said three objectives have been achieved: employing low-income people who otherwise would have been on welfare, supplying small businesses with more help and keeping local economies humming. “It would be a tragedy,” he said, “if we had to end this program after the end of the week.”

The U.S. House of Representatives has voted to extend the fund for a year at a cost of $2.5 billion. However, the proposal has stalled in the Senate amid concern over the size of the national deficit. Anyone laid off would face a tough job market, with California’s unemployment rate at 12.4%, well above the national rate of 9.6%.

Of California’s 58 counties, 48 have used the federal funding, said Charr Lee Metsker, deputy director of the state Department of Social Services’ Welfare to Work Division. By July, they had received more than $215 million for subsidized employment programs and submitted applications for an additional $210 million, Metsker said.

“Families spend those dollars in our state,” she said. “So not only is it good for our families, but it is good for California.”

In all, California has applied for $1.3 billion of the $1.8 billion it was eligible to tap. Metsker said the state was hampered by the requirement to come up with a 20% match. It was only after federal authorities said the supervision and training provided by employers would count toward the match that many counties realized they could use the fund to subsidize jobs.

Los Angeles County, which already had a small jobs program, was able to increase participation from a few hundred adults a year to more than 10,000, paying them $10 an hour. The county also used the funding to place about 16,500 youths in summer jobs.

For 23-year-old Ieasha Gabriel, a recent university graduate, it was a chance to burnish her resume by designing publicity materials for the Pacific Resident Theater in Venice.

“It gave me confidence that I could go out there and get something,” she said.

Los Angeles County Supervisor Don Knabe said many adults employed through the program have made the transition to permanent, unsubsidized jobs.

“To me that is proof alone that this program is a success,” he said in a statement. “We just need Congress to take action and extend this program.”

Doug Nye, one of Americal’s three partners, said the company would like to keep all four of its subsidized hires. He said the additional office staff has helped Americal compete for more government contracts, which has provided work for 35 painters. But he said the company would have to lay off some people if funding dried up.

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