I Say NO!

      I just read an article that was published May 1, 2011 on Statesman.com titled, "Did state subsidies add jobs? Maybe not" by Laylan Copelin. The article talks about the Texas Back to Work Program created by Lt. Gov. David Dewhurst in 2009. The program provides monthly subsidies to employers hiring new people for up to four months. The program is intended to provide new job positions to decrease the number of people on unemployment. It was so popular that spent its state funded $16.3 million in months and then the state added an additional $5.1 million from federal funds. The U.S. Department of Labor even gave it an award for being an innovative program. Dewhurst feels this program was a big success so he is trying to extend the program with $15 million in state funds. Asking for such a large amount of money in this economy, I would expect this program to be working wonders, but it fails to meet my expectations by a long shot.
     This program is giving $500 a month to companies for the first four months a new hire is employed hoping that this will create new positions but it is in no way accomplishing it. Aegis Communications received up to $740,000 for filling positions they would've had to fill either way. An Allied Barton Security Service's regional human resources director said the program allowed them to hire people that were unqualified for the position but they would've filled those positions even if the program had not existed. It sounds to me that call centers like Aegis Communications are able to receive such a high subsidy because people are constantly quitting, so they are always looking for new hires. I agree with Daniel Hamermesh, a University of Texas Economist, that argues that you should "Only get the subsidy if you have more employees at the end of the year." Employers should not get the subsidy if they just hire a new person. They should get it only if they create a new job position for that new person to fill.
      Considering the state budget is nowhere in the good shape it was in 2009 when this program was created, we should consider ending it. I do believe the program is a great idea but other contingencies should be met and it should be ran quite differently. The program failed to comply with its intended purpose so I strongly believe the money should go to more important places like the teachers and state employees who face losing their jobs.