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Baldwin, Wyden, Van Hollen, Bennet, Booker Introduce Legislation to Jumpstart Economic Recovery, Fund Six Months of Wages

Program would get Americans experiencing long-term joblessness back to work by providing dollar-for-dollar federal funding of state jobs programs when unemployment rate is above 7 percent

WASHINGTON, D.C. – Senator Tammy Baldwin (D-WI) and Senators Ron Wyden (D-OR), Chris Van Hollen (D-MD), Michael Bennet (D-CO), and Cory Booker (D-NJ) introduced legislation to jumpstart the economic recovery by immediately financing six months of wages and supportive services for eligible jobless workers. The Jobs for Economic Recovery Act would provide immediate funding for states, tribes and local governments to create or expand employment programs through a new Social Security Act jobs program, which would finance six months of wages for public, private or nonprofit jobs. Funds could also be used for job training and services like child care to help workers succeed upon completion of their job placement.

“Millions of Americans remain unemployed and struggling to make ends meet, so we need a bold, federal investment in state and local jobs programs to create job opportunities and put people back to work,” said Senator Baldwin. “As we support workers and businesses in our recovery from this economic crisis, this legislation is a stronger way forward and we should seize it.”

The legislation was praised by Community Advocates Public Policy Institute in Milwaukee, Wisconsin. “The Jobs for Economic Recovery Act is a bold and urgently needed response to our crippled economy. It is foundational because it allows people to get back to work. It addresses the unemployment that has resulted from the economic crisis caused by COVID-19. The bill also addresses long-term structural unemployment in urban and rural areas. It will especially help workers and communities suffering from racial and ethnic discrimination in training and hiring. We call on Senators and House members to pass this essential bill as part of your next steps in moving America's economy forward. The time is right to focus on getting us back to work,” said Julie Kerksick, Senior Policy Advocate, Community Advocates Public Policy Institute.

The Jobs for Economic Recovery Act would fund state programs at a matching rate determined by economic conditions and the state’s FMAP rate. When the unemployment rate is above 7%, there will be a dollar-for-dollar federal match, and the programs will be 100% federally funded until 2023 to jumpstart recovery.

Providing funding for subsidized employment programs would allow states to target individuals who have lost their jobs or hours as a result of COVID-19, and create essential jobs to respond to the ongoing public health crisis. To protect public health, these funds could not be used to fund a position that puts workers’ health at risk. The bill also authorizes grants to nonprofit organizations to support similar programs and provides funding for technical assistance and planning.

By 2023, the bill would require programs to meet new criteria and rely on evidence-based practices to continue receiving funding. Phasing-in these requirements would ensure states, tribes and localities have the flexibility to quickly respond to this crisis, while ensuring strong, evidence-based programs over the long-term.

By tying funding for employment programs to economic conditions on the ground, the Jobs for Economic Recovery Act would prevent these programs from disappearing like they did after the Great Recession, and allow them to provide critical employment support as the job market improves. 

Lastly, the bill would create an employee retention tax credit based on the Work Opportunity Tax Credit (WOTC) for employers who retain workers hired through the program for 24 months.

“This economic crisis hit working class Americans like a wrecking ball—they have faced Great Depression levels of joblessness over the past year. While vaccinations have picked up and Democrats’ American Rescue Plan is providing vital relief, we need to do more to jumpstart the economic recovery. That’s where our bill comes in. Financing six months of wages is critical to getting folks experiencing long-term joblessness back to work, particularly given the hardest-hit industries will not come back overnight. Our bill will also be a resource for employers to find and train workers for jobs they need to fill,” said Senator Wyden. “Importantly, our bill ensures resources to get folks back to work are guaranteed over the long-term by tying them to economic conditions on the ground. More than 18 million Americans are relying on jobless benefits to pay rent and buy groceries, and it will be harder for these workers to get back on their feet without a continued federal response.”

“Even before the pandemic hit, over a million Americans were looking for work for over six months and could not find a job. That number has now risen to over four million people. As we work to we defeat the pandemic and the economy improves, everyone who wants to work to support themselves and their family should be able to get a job. In order to prevent sustained economic pain and damage, we must provide private and public sector employers with incentives to hire those who have gone without work for a long time. This is one of our best tools to combat the long-term unemployment crisis – and these programs have been proven to work. I’m proud to join my colleagues in leading this bold plan to help Americans get back to work,” said Senator Van Hollen.

“As our nation pulls out of the worst economic crisis in nearly a century, we need sustained, bold action to get people back to work and promote a broadly shared economic recovery,” said Senator Bennet. “These types of job opportunities are a proven strategy for helping struggling workers get a foot in the door of the labor market, and tying them to economic conditions will benefit American workers, employers, and local economies in the long run. This smart, forward-looking legislation will help Colorado and the nation recover from this crisis.”

“The coronavirus pandemic triggered an economic crisis that has rippled across every corner of our country and impacted countless working families,” said Senator Booker. “With passage of the American Rescue Plan finally getting us on the road to recovery, we must also ensure we are doing all we can to build back our economy now. This legislation would inject much-needed federal resources into our economy that will help get Americans back to work.”

A copy of the bill text is available here.

A one-page summary is available here.

A section-by-section summary of the bill is available here.

Statements of Support

Arnab Datta, Employ America, Senior Legislative Counsel: “I applaud Senators Baldwin, Bennet, Wyden and Van Hollen for reintroducing this important bill. To ensure a swift and robust recovery, we must set programs and policies in place that emphasize helping people get back to work, as this bill does. It is particularly encouraging to see more proposals that ensure fiscal support is tied to the economic conditions on the ground, and urge Congress to strongly consider this legislation.”

Alexandra Cawthorne Gaines, Vice President of Poverty to Prosperity Program, Center for American Progress: “The Jobs for Economic Recovery Act is critical to creating long-term, inclusive prosperity. It builds on proven strategies to give people the income, training, and supports they need to regain their economic footing during the COVID crisis. Also, because the relief in the Jobs for Economic Recovery Act is tied to economic conditions and not arbitrary dates, it lays the groundwork to support workers through future economic downtowns.”

Olivia Golden, Executive Director, the Center for Law and Social Policy (CLASP): “The pandemic-induced recession has left millions unemployed, disproportionately affecting workers of color, those in jobs paying low wages, and young adults. Many people who have lost their jobs, especially young adults, have not been able to access any stimulus relief.  While the American Rescue Plan addressed many crucial needs, we still need a large investment in subsidized employment to support the long-term recovery and redress deep-seated inequities. We applaud Senators Wyden, Van Hollen, Baldwin, and Bennet for introducing this important legislation. We urge Congress to pass it swiftly and to otherwise prioritize the needs of individuals with historic barriers to employment, including young adults, people of color, and those impacted by the criminal legal system.”

Kali Grant, Senior Policy Analyst, Georgetown Center on Poverty and Inequality: “Millions of Americans—disproportionately workers of color, women, and low-paid workers—are still struggling to stay afloat and provide for their families, despite significant relief efforts that are underway. To kickstart a lasting and equitable recovery, policymakers should turn their attention to direct job creation through subsidized employment. The Jobs for Economic Recovery Act offers a promising, evidence-based plan to create new job and training opportunities; stabilize the national economy long-term; reach workers most in need of support, including workers with significant barriers to employment; and help workers find jobs that lead to sustained employment.”

Manie Grewal, Head of Policy, Roberts Enterprise Development Fund (REDF): “As an intermediary that invests in and advises employment social enterprises, we believe that individuals who have faced great adversity deserve the opportunity to work and contribute their skills and talents to our country and economy. The Jobs for Economic Recovery Act will ensure that individuals who are overcoming structural barriers to employment are included in subsidized employment programs and shows how an employment social enterprise could be the first step in an individual’s career pathway. This legislation will help to build a more equitable and inclusive workforce and restore the dignity of work for over 30 million people who are on the sidelines of the economy due to circumstances including previous incarceration, youth disenfranchisement, periods of homelessness, addiction, or mental health disorders – many of whose economic exclusion has only worsened amid COVID-19.”

Melissa Young, Senior Director, Heartland Alliance: “The economic impacts of the recession have laid bare the inequities that have long existed in our labor market. Building back better requires solutions rooted in a clear vision for realizing economic justice. The Jobs for Economic Recovery Act reflects a necessary piece of this vision.”