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Commentary By Russell Sykes

For $62 Million, N.Y. Had Better Create Jobs

Cities, Economics, Economics Tax & Budget

A $62 million initiative to promote job creation for unemployed inner-city youths was part of last week’s tax increase deal between Gov. Andrew Cuomo and the state Legislature.

Given the double-digit unemployment rates among those 16 to 24, especially minorities in urban areas, the problem is real. Unfortunately, like the rest of the Dec. 7 special session package, the youth employment piece was rushed to enactment with little apparent deliberation or review. There is reason to be skeptical as to how much it will accomplish.

One of the two biggest pots of money in the package — nearly 40 percent of the total — consists of $25 million to support a summer jobs programs run through the state Labor Department. Some labor force experience and skill acquisition for youth is certainly better than none, but this does little or nothing to address the pressing need of young people for year-round work.

Another $8.3 million will flow to the Labor Department for training programs for jobless youth, including small stipends to help them “transition to the workplace.” But the department, with its focus on displaced adult workers, is not accustomed to dealing with the complicated problems — including substance abuse, criminal records, child support and child care issues as well as welfare dependency — often found among young people who have yet to connect with the job market.

A better fit for this mission would be the existing Career Pathways program, run by state Office for Temporary and Disability Assistance. (Until recently, I was a deputy commissioner in that agency with oversight of this program, among others.)

Career Pathways has a proven record of matching needy youth to needed jobs. Its providers work closely with employers in sectors that are actually hiring, a key element for success. Yet, Cuomo’s plan provides the program with only a token $2.5 million. This is perplexing for a governor who pledges to streamline government and avoid duplication.

The job creation bill also sets aside $25 million for tax credits for businesses hiring unemployed young people in targeted urban areas. Employers will get a $3,000 per-full time employee tax credit during a six-month “training period” and another $1,000 credit for retaining that employee for an additional six months.

Research suggests that tax credits to promote hiring have a mixed record — often viewed as too complicated and small to tilt a decision. The money devoted to the credit could be spent more effectively through the Career Pathways program and on direct wage subsidies for short trial periods, to offset some of the risk that employers assume when they hire inexperienced, unskilled young people. When the young people involved are also welfare recipients, their welfare grants could be diverted to help underwrite wages.

The $62 million devoted to this new youth employment initiative may not sound like much in the context of a $132 billion state budget. But in austere times, when state tax dollars are especially scarce, $62 million is a lot to spend on well-intentioned but poorly conceived attempts to fix one of our most stubborn social and economic problems.

What’s now needed is legislative oversight to determine whether this job creation effort actually delivers the goods. If not, the money could be better spent elsewhere.

This piece originally appeared in Albany Times Union

This piece originally appeared in Albany Times Union