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4:37 pm
Tue October 4, 2011

Mississippi's Jobs Program: A New National Model?

As President Obama sells his jobs initiative across the country, people in Mississippi point to a program they say is already creating jobs. Mississippi has attracted attention because economists like the way the state got employers to share the cost of hiring workers.

Under the Subsidized Transitional Employment Program and Services, or STEPS for short, the state pays part of the cost of workers' salaries in the hopes that the subsidy will lead to full-time jobs.

Some analysts say this could be a national model, but it comes with a price tag.

From Unemployed To Full-Time

In the STEPS program, which started last year, the state used federal stimulus money to pay 100 percent of salaries in the first month of employment, down to 25 percent six months later. Companies hired new workers who met poverty guidelines and had at least one child under 18 in their home.

Jamita Washington, a single mother with four kids, was unemployed for two years before the program came along.

"I had bills that I had to pay. I was getting evicted. It was hard; I couldn't find a job anywhere," Washington says.

When STEPS ended, Washington got a full-time job making minimum wage with Magnolia Metal & Plastic Products in Vicksburg, Miss. She's one of about 60 people working at the plant, which makes window screens and other parts for windows.

Washington later got a small raise and now works as a clerk in the shipping department. She says STEPS gave her a chance even though she had been unemployed for a long time.

"You go in there, you do the best that you can do," she says. "You show that you are appreciative for that opportunity. You prove yourself and employers [will] pay attention."

A Long-Term Answer?

Chuck Williston, the operations manager at the plant, says the company was happy with the people it got through the program.

"I think they did a really good job of screening people," he says.

The plant took a hit as the housing industry declined, and Williston laid off employees a few years ago. He acknowledges the unemployment rate is high here, above the national average, but says he would have filled his opening without STEPS.

"I'm not sold 100 percent on it but it worked for our employees and it worked for us," he says. "Long term, is that the answer? I don't know."

Williston says two of the four people he hired through STEPS are still working here. And Mississippi officials say more than half of the 3,200 who got jobs were still employed last spring, six months after the program ended.

Stan McMorris with the state Department of Employment Security says these people are now in unsubsidized jobs, and that's the point.

"We had 1,800 permanent jobs created," McMorris says. "They're now a taxpaying, wage-earning individual that have been lifted up to the point [where] they're being successful."

Persuading Companies To Take Action

Analyst LaDonna Pavetti with the Center on Budget and Policy Priorities, a Washington research group, says the program gets companies that are reluctant to hire to take action.

"Even if it's short term, it has huge benefits," Pavetti says. "And the reality is, for somebody who is unemployed, six months of employment is better than nothing. And for the businesses that are struggling, what you hope is that six months may ... allow them to generate enough business that they'll be able to hire somebody at the end."

Some small businesses with one or two employees complained of too much paperwork and too many rules, like having to pay for workers' compensation insurance.

"My problem is ... the restrictions, really, that I see whenever they do these programs," says Greg Cronin, owner of Cascades Racquet Club in the suburbs of Jackson, Miss. "I'm probably more of the small company who would love to make a step forward, who watches other companies get the breaks [and] get these assistive programs but still not have something except an increase in property tax on me."

Cronin says the government is using taxpayer money to help certain companies, rather than creating a stable environment for all businesses to thrive. The state spent about $20 million on the program.

'For Me It Means A Future'

Yet it was so popular that after a yearlong hiatus, a new, yet much smaller version started a few weeks ago, called STEPS 2. This time, it's a four-month job subsidy. Multicraft International, a company that makes auto parts and supplies in Pelahatchie, Miss., is one company taking advantage of it.

The company also downsized because of the economy, but CEO Andrew Mallinson says it's is now hiring back and using STEPS to do it.

"It just takes a bit of the sting out of the cost of hiring another person," Mallinson says. "We're happy to do that when the business conditions allow but this does stimulate us to perhaps take action earlier than we might otherwise."

Multicraft just hired Brian Vandevender, who has done electrical work for builders but for the past couple of years has been doing odd jobs because he couldn't get a full-time position.

"Now I'm 40 hours a week and they gave me the opportunity," Vandevender says. "I ain't going to let nobody down."

Vandevender works in the warehouse, and there's no promise of a full-time job once the state stipend runs out, but that's clearly what he's hoping for.

"For me it means a future. I would say it means a future here," he says.

Funding for the Mississippi STEPS program runs out in December, but Obama's jobs bill contains a proposal that would give states $5 billion for job training and subsidized employment. The question is whether Congress is willing to pay for it.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

MELISSA BLOCK, host: President Obama is in Texas today selling his new jobs plan. In Mississippi, people point to a program they say is already creating jobs. The state encourages employers to hire by covering part of new workers' salaries. The hope is these new jobs will last longer than the government subsidy does.

Some analysts say this could be a national model, but as NPR's Kathy Lohr reports, it does come with a price tag.

KATHY LOHR: Mississippi has attracted attention because economists like the way the state got employers to share the cost of hiring workers. In the Mississippi STEPS program, which started last year, the state used federal stimulus money to pay 100 percent of salaries in the first month down to 25 percent six months later.

Companies hired new workers who met poverty guidelines and had at least one child under 18 in their home.

JAMITA WASHINGTON: My name is Jamita Washington and we're at my place of employment, Magnolia Metals and Plastics in Vicksburg, Mississippi.

LOHR: Washington is a single mother with four kids. She was unemployed for two years before the STEPS program came along.

WASHINGTON: I had bills that I had to pay. I was getting evicted. It was hard. I couldn't find a job anywhere.

LOHR: When the program ended, Washington got a full time job here making minimum wage. She's one of about 60 people working at this plant, which makes window screens and other parts for windows. Huge rolls of aluminum are fed into machines and the material is cut exactly to size. Washington got a small raise and now works as a clerk in the shipping department. She says the program gave her a chance.

WASHINGTON: You go in there and you do the best that you can do. You prove yourself and the employer will - they pay attention.

CHUCK WILLISTON: We were happy with the people we got through the program. I think that they did a really good job of screening people.

LOHR: Chuck Williston is the operations manager at the plant, which took a hit as the housing industry declined. He laid off employees a few years ago. Williston acknowledges the unemployment rate is high here, above the national average. But he says he would have filled his opening without STEPS.

WILLISTON: I'm not sold 100 percent on it, but I mean, it worked for our employees and it worked for us. Long term, is that the answer? I don't know.

LOHR: Williston says two of the four people he hired through STEPS are still working here and Mississippi officials say more than half of the 3,200 who got jobs were still employed last spring, six months after the program ended.

Stan McMorris with the State Department of Employment Security says these people are now in unsubsidized jobs and that's the point.

STAN MCMORRIS: They're now a tax-paying, wage-earning individual that have been lifted up to the point now they're being successful.

LADONNA PAVETTI: Even if it's short term, it has huge benefits.

LOHR: Ladonna Pavetti is with the Center on Budget and Policy Priorities, a Washington research group. She says the program gets companies that are reluctant to hire to take action.

PAVETTI: And the reality is, for somebody who is unemployed, six months of employment is better than nothing and for the businesses that are struggling, what you hope is that six months may be able to allow them to generate enough business that they'll be able to hire somebody at the end.

LOHR: Some small businesses with one or two employees complained of too much paperwork and too many rules, like having to pay for workers' compensation insurance.

Greg Cronin owns Cascades Racquet Club in the Jackson suburbs.

GREG CRONIN: I'm probably more of the small company who would love to make a step forward, who watches other companies get the breaks, get these assistive programs, but still not have something except an increase in property tax on me.

LOHR: Cronin says the government is using taxpayer money to help certain companies rather than creating a stable environment for all businesses to thrive. The state spent about $20 million on the program, yet it was so popular that after a year long hiatus a new albeit much smaller version started a few weeks ago called STEPS 2. This time it's a four month job subsidy.

Multicraft International in Pelahatchie, Mississippi, is one company taking advantage of it. Andrew Mallinson is CEO of Multicraft, a company that makes auto parts and supplies. His company also downsized because of the economy, but Mallinson is now hiring back and using STEPS to do it.

ANDREW MALLINSON: It just takes a bit of the sting out of the cost of hiring another person. We're happy to do that when the business conditions allow, but this does stimulate us to perhaps take action earlier than we might otherwise.

LOHR: Multicraft just hired Brian Vandevender. He's done electrical work for builders, but for the past couple of years, he's been doing odd jobs because he couldn't get a full time position.

BRIAN VANDEVENDER: Now, I'm 40 hours a week and they gave me the opportunity. I ain't going to let nobody down.

LOHR: Vandevender works in the warehouse and there's no promise of a full time job once the state stipend runs out, but that's clearly what he's hoping for.

VANDEVENDER: For me, it means the future. You know, I would say it means a future here.

LOHR: Funding for the Mississippi STEPS program runs out in December, but the president's jobs bill contains a proposal that would give states $5 billion for job training and subsidized employment. The question is whether Congress is willing to pay for it.

Kathy Lohr, NPR News. Transcript provided by NPR, Copyright National Public Radio.