Giving Compass' Take:

• Dan Bloom writes about the proven benefits of subsidized employment programs for creating equitable job opportunities for disadvantaged workers.

• Are you prepared to adjust your giving to push for such programs to recover from coronavirus' economic upheaval?

• Learn about how you can support nonprofit organizations in pivotal coronavirus response efforts.

Experts are warning that the economic impact of the COVID-19 crisis is likely to persist well beyond the point when social distancing rules begin to loosen. In particular, the unemployment rate is likely to remain unusually high for many months to come.

Subsidized employment — which, broadly, uses public funds to create jobs for the unemployed — has been a useful tool for addressing mass joblessness during recessions. Most recently, states used funds under the American Recovery and Reinvestment Act of 2009 (ARRA) to put more than 250,000 people to work in subsidized jobs. Earlier subsidized employment programs during the Great Depression and in the 1970s were even larger. A similar program will likely be needed if COVID-19 leads to a severe recession.

MDRC has been studying subsidized employment programs for more than 40 years and recently completed two large-scale federal projects that rigorously tested 13 subsidized employment programs in eight states. The programs served very disadvantaged workers, such as people receiving cash assistance or people returning to the community from prison. The findings from those studies are summarized in a recent report.

The studies showed that subsidized employment programs can operate effectively even for people with little work history, criminal records, or other disadvantages. Individuals were eager to work, and programs were able to place them into meaningful jobs. The studies also strongly suggest that nonprofit organizations, public agencies, and social enterprises (businesses with a social purpose) will need to play a substantial role as worksites in future subsidized employment programs in order to ensure that the most disadvantaged workers do not fall through the cracks. Many for-profit businesses are unlikely to hire those workers even with generous subsidies; an equitable approach will need to target funds and slots toward those most in need.

Read the full article about subsidized employment programs by Dan Bloom at MDRC.