New Orleans I’ve been clear. I’m still a “More Money Now – Mas Dinero Ahora!” guy, as the welfare rights slogan used to go. That doesn’t mean I’m against work. Just the opposite, but for work to do the trick in dealing with poverty that has to mean real jobs, and real jobs are permanent jobs.
Here’s where politicians, and maybe even policy makers, are playing pretend in the name of fictional jobs. In the wake of ending “welfare as we know it” came tax credits for business to create permanent jobs. Turns out, not surprisingly, according to excellent work done by Pro Publica, that the WOTC or Work Opportunity Tax Credit program, has become a huge slush fund for companies and their labor brokers specializing in providing temporary jobs. Beneficiaries are not just staffing companies, but they are also high-turnover operations that specialize in treating workers as nothing more than fleshy widgets. The top three recipients of WOTC are Walmart, Dollar General, and Amazon. Doesn’t that just about say it all?
The design of the tax credit is such that an employer can get the full benefit, 25% of the wages paid up to $2400, after having a worker on payroll for 10-weeks and clocking at least 120-hours. Remember, this is supposed to be a gateway to permanent employment.
As Pro Publica reported, for temp agencies this has been the salad days:
Corporate filings by publicly traded temp agencies reveal how big a windfall the tax credit has been. One company, Kelly Services, reported receiving tax credits, “primarily” WOTC, worth $164 million over 10 years, or 48% of its U.S. pre-tax earnings. TrueBlue, which owns the day-labor firm PeopleReady, reported receiving tax credits — also described as “primarily” WOTC — worth $114 million over the past 10 years, or 29% of its pre-tax income. The credits reduced TrueBlue’s federal income taxes by 69% and Kelly Services’ by 73%.
In fact, Pro Publica found that when they looked at a sample of nine states applications:
…a quarter of the jobs certified for the tax credit between 2018 and 2020 were with temp agencies. The numbers become even more striking when the analysis is limited to one eligible group — workers with felony records. Thirteen of the top 14 employers certified to get credits for those workers were temp agencies.
One of the first campaigns ACORN waged in 1971 in Arkansas was with one of our groups called the UWOC, the Unemployed Workers Organizing Committee, was to demand that temp agencies be regulated. “Buying a job”, as our members called it was the Wild West then, and, sadly, in many ways still is, thanks to the abuse of WOTC. We actually unionized temporary agency workers under the NLRB who were working in the 1990s and still are today as laborers on garbage trucks in Louisiana and Texas, though it is common throughout the privatized sanitation sector.
Besides the ideologues on the right who parrot the pretend lines about jobs, the reality has little interest for legislators. Once again, as Pro Publica writes,
Today, the WOTC costs the federal government about $2 billion each year. That’s enough to provide free community college tuition for 512,820 people, and, after adjusting for inflation, it’s about eight times what Congress estimated the program would cost in 1996. Back then, lawmakers made the tax credit temporary so that the government could fully assess its effectiveness before making it permanent. A formal review has yet to occur.