March 1, 2012 | By | Posted in Governor

New PA jobs initiative will cost $2.5 million

Dept. Labor & Industry Secretary: will connect with employers in new ways

By Eric Boehm | PA Independent
HARRISBURG — Pennsylvania is playing matchmaker — newly unemployed resident meet business looking to hire.

In a budget that holds the line on state spending, the Keystone Works program will cost taxpayers $2.5 million next year to, in large part, pay for incentives to participating employers.
But the payoffs are that programs for the state Department of Labor and Industry will help reduce unemployment, open doors to new jobs for unemployed workers and help defray the costs associated with taking a risk on hiring a new employee, Department of Labor and Industry Secretary Julia Hearthway said Thursday.
“We can now connect with an employer in a way that has not been done before,” she said, describing an initiative that would be a “win-win” for all involved.
However, some lawmakers said funding should be restored to job training programs that Gov. Tom Corbett trimmed back in his proposed budget.
Unemployed workers in their first 26 weeks after job loss will be matched with employers for “on the job” training and will remain eligible for unemployment benefits until training is completed. The training programs will be limited to eight weeks and no more than 24 hours per week.
State Rep. Mike Peifer, R-Pike, said businesses are concerned about investing in new workers when times are tough.
“When we talk to our businesses, we always hear about the risks that are associated with new hires,” Peifer said.
If they hire trainees, employers will be eligible to collect $375 for every four weeks they retain the new employee after the training program is completed, with a cap set at $1,500, or four months.
By that point, the employer will have made a significant investment in the new worker, Hearthway said.
“We’ve been hearing from employers that they will hire if they have a little bit of relief from that,” she said.
The program’s budget will be mostly used to cover $375 monthly payments to employers who retain workers after the training program, she said.
State Rep. Tina Pickett, R-Bradford, said the program would help to spur new hiring.
“As a former employer, I know that you see people with potential, but there is a cost to take them on,” Pickett said. “It seems like a good incentive to me.”
Democrats generally praised the new program, but pointed to similar programs in the budget Corbett cut.
State Rep. Steve Samuelson, D-Northampton, said the administration also should restore funding to job training programs that focused on women who were re-entering the workforce and disabled workers.
“We should be looking for ways to provide job retraining that will lead to permanent jobs for citizens of Pennsylvania,” he said. “Yes it’s great to do this new program, but we should also restore funding for the existing New Choices/New Options program.”
Rick Bloomingdale, president of the Pennsylvania AFL-CIO, a coalition of labor unions, said it was “laudable” for the administration to put resources into job training, but questioned if the new program would achieve results.
“If businesses need people, they are going to hire people,” he said. “Right now businesses are having a hard time finding markets, so they are not going to hire people even with that incentive.”
In his budget address last month, Corbett said the goal of the Keystone Works program was to create a robust employment market and a vital economy.
“The idea is to get the recently unemployed back to work as quickly as possible,” Corbett said.
Unemployment in Pennsylvania fell to 7.6 percent in December 2011, the most recent month for which data is available. That’s down from a recessionary high of 8.7 percent in March 2010.
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