Underspent Funds & Reduced Placements: Fear that employers will no longer be interested or able to participate in subsidized wage programs, leading to underspent funds and reduced job placements.
We are going into this with our eyes wide open. Based on our assessment, last fiscal year x% of our subsidized wage dollars were used to reimburse wages for jobs below the living wage standard. To ensure that we continue to provide these opportunities for program participants and continue spending funds, we will:
Engage employers in policy development to proactively understand their concerns and create buy-in
Provide advanced notice of any changes to all stakeholders and direct service staff
Bring new employers into our network
Regularly assess trends in wages to ensure that the policy remains current
Fewer Opportunities for Marginalized Participants: The living wage requirement for subsidized wage programs will result in less employment opportunities for individuals with the largest barriers to employment in the system (e.g., individuals experiencing homelessness, individuals involved in the justice system, out of school youth, English language learners, etc.).
Our policy is going to include a process to approve subsidized wage agreements (such as on-the-job training [OJT] contracts) that pay a starting wage below the living wage to provide transitional job opportunities to some of the hardest to serve populations as long as they include other key job quality necessities, opportunities and features, such as stable and predictable schedules and specific career ladder and wage increase opportunities with set time frames.
Out of Scope: Key stakeholders and staff may take the position that it is not your agency’s role to influence wages employers pay their workers as long as they are complying with federal, state and local minimum wage requirements.
Minimum wage laws have not kept up with cost of living since the 1960s. If we are going to subsidize wages with taxpayer funds, these businesses need to pay a living wage so the participants they are hiring from our program can pay their rent, keep their lights on and put food on the table. That isn’t too much to ask.
Transition Jobs Don’t Fit: Transitional jobs may not provide a living wage but are a critical pathway for some participants.
Include options within the OJT training policy to accept documented, historical, or written evidence of step raises that lead to a higher wage and self-sufficiency for the candidate within a year of training completion or evidence of career ladders or advancement opportunities that can be directly linked to the successful completion of the OJT.
Fear of Benefits Cliffs: Increasing wage subsidies may cause benefits cliffs for the individual participating in the program.
Carefully analyze whether the proposed increase in wage will cover existing benefits that participants may be receiving. Use calculators such as the Federal Reserve Bank of Atlanta’s Cliff Calculator to understand the impact that a change may have on the participants' access to services and subsidies.