A state subsidy that pays small businesses to hire unemployed people has resulted in more than 1100 hires in its first year, at a cost of $10 million.
Hundreds of those jobs would have been filled anyway, but it’s possible the businesses would not have favored unemployed candidates without the subsidy, which covers 100 percent of the wages in the first month.
David Alger, 24, of Danbury, started a new job at staffing agency Ridgefield One a week ago with help from the subsidy. He left the Marines in September 2011, and told a crowd of state legislators in Hartford who were cheering the program: “since then, it has been a rough road for employment.”
His longest job during that time was 10 months as a recruiter, and after he was laid off, the best job he could find was part-time seasonal work for UPS as a package handler.
Alger, whose wife stays home to care for their 4-year-old son, was anxious to find another job when the UPS job ended December 31st, and this one, as a recruiter, pays almost twice as much as UPS.
David Marceau, his boss, said it takes months of on-the-job experience for new IT recruiters to become productive, so the state money is very helpful.
The rules vary for factories and for all other businesses. For factories, the subsidy is more generous. For someone at the average wage of $14.23 an hour, the subsidy would be more than 80 percent over the six months of coverage. For the other companies, which must have 100 employees or fewer, the subsidy would be more like 60 percent, and the unemployed person has to live in a town with elevated unemployment, and be single or be married to someone with a moderate or low income. Combat veterans from Iraq and Afghanistan are exempted from the income and geography rules, and can be hired by companies of any size and still receive the subsidy.
So far, 245 of the hires have timed out of the six-month subsidy, but the state doesn’t know how many of them were retained when the business had to pay the full cost of their wages.
The subsidies, known as Step Up, are authorized at $30 million. Labor Commissioner Sharon Palmer said at the press conference: “We’re hoping to continue it as long as the recession is here, and beyond.”
The top towns and cities for subsidized hiring so far have been Bridgeport, with 77, New Haven with 76, Bristol, with 45, New Britain, with 39, and Plainfield and Wallingford, with 35 each.