Spotlight Exclusives

March 16, 2009: Ensuring Low-Income Workers Get a Boost from the Stimulus Package, By Robert P. Giloth, Director of the Family Economic Success Unit at the Annie E. Casey Foundation

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Across the nation, state policymakers are considering how best to use the federal funds that are part of the American Recovery and Reinvestment Act recently passed by Congress.

The legislation۪s primary goals are to spur economic recovery and get people back to work.

As the states move to invest the stimulus funds to reach those goals, many of us in the philanthropy world are hoping that policymakers will rely on certain principles to guide their spending decisions.

Policymakers should ensure, for example, that the new jobs created are good jobs that pay a family-supporting wage and provide critical benefits such as health insurance. This is a particularly important goal as states allocate spending on infrastructure and energy-efficiency projects.

States should also strive to ensure that a portion of the new jobs created are available to workers with low skills and incomes, as well as to women and minorities. This means targeting resources to the people and communities most in need and setting standards for the hiring and training of state residents.

The federal funding provides significant resources for skills development, which is critically important. Workers with higher skills will be better able to support their families. And a stronger workforce will help communities and states become more economically competitive. We have a good understanding of what kinds of skills-development programs work well, and we hope that states will turn to proven strategies, which will, in turn, attract additional investment from the philanthropic community.

Although economic recovery and job growth are the primary goals, state policymakers should also begin now to better address the problems generated by job losses, home foreclosures, and other issues. This means taking advantage of stimulus resources that extend and expand unemployment insurance, health care, food assistance, and other family services. Such benefits can be lifesavers to workers struggling in low-wage jobs or to breadwinners who have become unemployed.

These principles have been well articulated in a new document created by the Working Poor Families Project, a national initiative working to improve state policies affecting low-wage workers and their families. This set of key principles to guide state investments has also been endorsed by 20 other national organizations concerned about the effective implementation of the Recovery Act.

Along with a focus on low-income families, states must recognize that all eyes will be watching to see if the recovery money is invested efficiently, wisely, and with accountability. That means setting goals for how the money is spent and agreeing on measurements to see if the new investments are meeting their targets. Over time, the states should publicly disclose just how the stimulus spending is going. For example, how many jobs have been created and what type of wages and benefits do they provide?

To reach these goals will require innovations in how government delivers service. Bureaucratic boundaries must be overcome and state agencies must look for ways to work together systemically.

At the Casey Foundation and many other philanthropic organizations, we are constantly analyzing how well our investments work. Are we meeting our goals and laying the groundwork for sustained economic advancement? States should do nothing less. The stakes are too high for our economy, particularly for those with low incomes and little if any safety net to rely on.

State leaders have the responsibility to generate the quickest and strongest economic recovery possible. But, now more than ever, these leaders must ensure that stimulus funds are spent effectively and bring benefits to those most in need.

Robert P. Giloth is director of the Family Economic Success Unit at the Annie E. Casey Foundation.

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