States to compete for slots in new job-training program

By Peter Schroeder - 04/19/12 01:20 PM ET

The White House rolled out a plan Thursday that would allow up to 10 states to experiment with job-training programs for the long-term unemployed.

Labor Secretary Hilda Solis and Gene Sperling, the director of the National Economic Council, unveiled guidance for how states can apply to participate in the initiative, which was created as part of the payroll tax deal President Obama struck with Congress in February.

The projects aim to help individuals re-enter the workforce by allowing them to receive jobless benefits while making a trial run with a prospective employer.

Sperling called such "Bridge to Work" models "one of the critical elements" in the fight to keep the unemployed up-to-date on skills and competitive in the labor market.

"As our nation faces the lingering challenge of long-term unemployment caused by the depths of the Great Recession, it becomes more vital to do everything we can to help more Americans connect to the workforce at a quicker pace," he added.

Under the guidance issued by the Labor Department, states could apply to either receive funding or a waiver to use funds otherwise set aside for unemployment insurance to launch these types of projects. The program is modeled after a similar program launched in Georgia that allows businesses to train prospective employees for up to two months without having to hire or pay them.

Under the federal initiative, states could also subsidize wages to help cover employer-sponsored training, or provide payments to incentivize employers to hire unemployed workers.

President Obama originally proposed the changes to the unemployment insurance program as part of the jobs bill he sent to Congress last fall. He reiterated the need to reform jobless benefits to help the unemployed find new work as part of his January State of the Union speech.

Now, administration officials said they are eager to allow states to tinker with the idea and figure out the best way to make such programs work.

"We're looking for innovation here," Solis told reporters.

She has been tapped with evaluating applications from states and deciding which ones will receive the federal go-ahead.

The announcement marks the latest government effort to tackle one of the lingering effects of the economic downturn — the 5.3 million people who have been out of work for more than four months.

Federal Reserve Chairman Ben Bernanke has singled out the plight of the long-term unemployed as not just a problem for those jobless, but also for the broader economy as well. Speaking to business economists last month, Bernanke warned that the productive capacity of the entire economy could be reduced by the number of long-term unemployed, as their skills and network withers without work.