A pioneering city wage-subsidy program that’s expected to continue for at least another two years is attracting national attention for its success in helping unemployed people re-enter the job market.
The Jobs Now program provides employers with $5,000 — $1,000 per month for five months — in exchange for new hires of low-income workers. As of last month, 1,037 low-income people had found work through the program, either with The City or at one of 153 San Francisco businesses.
Chona Piumarta has hired six such workers, including bakers, retailers and a dishwasher, since she opened Pastry Cupboard in August. Without the subsidy, she said, she would likely be short-staffed and not have time to promote her company.
“I thought it was a great way to save some money and also help some people that are trying to get their life together,” Piumarta said. Five of the six employees remain employed — of whom two are no longer subsidized.
Due to the program’s early success, two outside agencies — the Rockefeller Foundation and the low-income-oriented think tank MDRC — are considering whether to study it in detail. The reason for their interest, said city Human Services Agency Director Trent Rhorer, is the program’s roughly 45 percent job retention rate, which he said is “exemplary” compared to standalone job training programs.
“We are actually receiving a lot of national attention for this program,” Rhorer said last month during a Board of Supervisors Budget and Finance Committee hearing on the department’s proposed budget.
The program began with federal stimulus funding in 2009. When funded with stimulus dollars, wages were completely subsidized. After the federal government discontinued funding the program in 2010, The Human Services Agency continued the program on a smaller scale.
The City also uses the program to hire people for cleaning up parks and streets. Rhorer said his department hires people under the program “who were formerly on public assistance are now coming to work for us as case workers in our public assistance program.”
Jobs Now may become the model for job training in the future, Rhorer believes. Instead of training people and then trying to place them in jobs, Jobs Now provides on-the-job training that could lead to longer-term employment when the subsidy runs out.
“What we’re finding is half or more of the placements in the private sector actually continue even when the subsidy ends, which shows us that our clients can certainly do the work once they are given the opportunity, but employers as well are keeping employees that are valuable to them rather than letting them go and going through the rehire process,” Rhorer said.
The program is expected to continue for at least the next two fiscal years at a cost of about $7 million a year, including both city and state funding. The funding is included in the Human Service Agency’s proposed budget, which will undergo review by the Board of Supervisors in June.