September 9, 2011 / 1:40 AM / 8 years ago

UPDATE 1-Georgia jobs program cited by Obama has big flaws

* Georgia Work$ praised by Obama, Republicans

* Only 12 participants joined the program in August

* Program undergoing significant overhaul (Updates with Obama speech, reaction from Georgia program)

By Matthew Bigg

ATLANTA, Sept 8 (Reuters) - A jobs program in the Southern state of Georgia, cited in President Barack Obama’s plan to fight unemployment, needs big fixes and would not work as a federal initiative, says the official who runs it.

Obama told Congress on Thursday in a major speech on jobs that the state-run Georgia Work$ initiative, along with other measures, would help people unemployed for more than six months and he stressed that Republican leaders in Congress supported it.

“We have to do more to help the long-term unemployed in their search for work,” Obama said. Fear the U.S. economy could slip back into recession is hurting the Democratic president’s chances of re-election in 2012.

“This jobs plan builds on a program in Georgia that several Republican leaders have highlighted where people who collect unemployment insurance participate in temporary work as a way to build their skills while they look for a permanent job,” Obama told Congress.

But Georgia Work$ is being restructured to overcome significant flaws. Even within the state, it is seen as “not a marquee program,” said state Labor Commissioner Mark Butler, the Republican elected official who oversees it.

More than 30,000 people benefited from the program in the past, but in its current form, Georgia Work$ is tiny. Only 12 unemployed people signed up in August and 92 have done so since February, according to state Department of Labor statistics.

The voluntary program places unemployed people with firms for eight weeks of job training similar to an internship. Participants receive unemployment insurance plus a small stipend and have the chance of a job at the end of it.

Butler said the program he inherited in January was virtually bankrupt and “fraught with problems,” so he is surprised it has attracted so much national attention.

Obama gave no details of how the program would be applied at a national level and Butler said his office had had no contact with the White House.

“We think that the foundation (idea) has merit but we don’t believe that the program we have right now is as effective as it could be and it needs a lot of tweaking,” Butler said.

“I don’t really like the idea of federalizing this program. .... We would like to make some changes to it and we would like to stay in control of it and not have it mandated from Washington,” Butler said in reaction to the speech.

Butler said it was just one tool to fight unemployment in Georgia, which stood at 10.1 percent in July and has exceeded the U.S. average for the past 48 months. Losses in manufacturing, construction and finance have been severe.


One advantage of the initiative is that it reduces the risk for employers who want to hire, former Labor Commissioner Mike Thurmond, a Democrat who set up the program in 2003, told Reuters Insider [].

Yet employers remain wary. Local business leaders who spoke in Athens, Georgia, this week linked their reluctance to hire to concern over future demand in a struggling economy.

They also cited a skills deficit among the unemployed.

In one example, construction equipment maker JCB North America set out last November to fill 200 new skilled manufacturing jobs at its headquarters in Savannah, Georgia.

“We thought it would be a fairly easy task given the high unemployment figures especially here in Georgia but we have had significant difficulties in finding the skilled labor,” general marketing manager Karen Guinn said.


Georgia Work$ had been successful but only “at the margins,” said Thomas Smith, a finance professor at Emory University’s Goizueta business school. He said it needed more rigorous follow-up with employers to maximize its potential — something that would increase administrative costs.

Butler said it would provide more help for low-skilled unemployed people than jobless professionals and he would welcome dialogue with other states that wanted to use it as a model.

The program has undergone substantial recent change. Between March 2003 and July 2011, employers accepted some 32,000 participants into training.

Of those, some 24 percent who completed training were hired, officials said, although they acknowledged the program’s statistics needed to be improved. There are no figures on long-term job retention and state administrative costs have not been tallied.

In September 2010, the program was opened to any job seeker, the stipend was increased to $600 from $240 and its length was reduced to six weeks from eight. Monthly participation jumped to a peak of 4,081 in January this year.

But the changes blew through the annual budget and Butler began an overhaul and reinstated the original conditions in a move that decimated the participation rate.

The program has no dedicated staff and lacks a full-time leader. In a further sign of its low profile, its website is buried within the departmental site and is less prominent than another state training scheme, Georgia Work Ready. (Editing by Peter Cooney)

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