Our regular contributor, Tom W. Pauken, provided this testimony in writing to the Ways and Means Committee’s Subcommittee on Improving Efforts to Help Unemployed Americans Find jobs on February 11, 2011. As chairman of the Texas Workforce Commission, Pauken has played a pivotal role in a state that has weathered the Great Recession better than most and provides those lessons to the rest of the country. – Ed.
by Tom W. Pauken
Texas has an important story to tell and because I believe our experience can help policymakers here and in other states address the problem of unemployment.
Texas has weathered the current recession better than any other large state. While we have not been immune to its effects, consider these numbers:
Between December 2000 and December 2010, Texas created 640,600 private sector jobs, according to recent Labor Department reports. That is an 8 percent increase over the last decade. During that same period of time, every other of the ten largest labor market states lost private sector jobs, and the nation as a whole lost more than 3.2 million such jobs.
There are many reasons why Texas has fared better than other states during the downturn. Governor Perry and the Texas legislature have instituted polices of fiscal restraint and lower taxes that have made Texas the number one place for business in our nation. And thanks to our state legislature, the Texas Workforce Commission has administered a new program called Texas Back to Work designed to encourage employers to hire Texans who are unemployed and who have lost their jobs through no fault of their own. More than 10,000 unemployed Texans have been hired and over 2700 employers have benefited as a result of the program and this initiative received the Department of Labor’s best practices award this past fall.
The program provides an incentive of up to $2,000 for hiring qualified UI claimants with the goal of rapid reintegration into the workplace. Employers train, develop and oversee new employees with the purpose of retaining the new hire after an initial 4-month period in order to receive the full incentive.
The program has been a win-win for employers, job seekers, and the taxpayers of Texas. Of the participants in the program, two thirds have successfully completed, with 89% of them continuing to show wages in the following quarter. Program wide, 75% of participants whether they complete or not show wages in the following quarter. More importantly, this program helps Texas businesses with the critical task of maintaining an up-to-date labor force, while also helping unemployed Texans get off the rolls of UI claimants and obtain what they truly seek – a job, not benefits.
Texas Back to Work was funded with seed money provided by our legislature and we later extended the program with federal funds. I have included a detailed summary of the Texas Back to Work program as part of this testimony. Please refer to Attachment 1 for more details on the success of the program.