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Firms Miss Out on Jobs Push

Wall Street Journal (09/22/12) Ianthe Jean Dugan

A new federal program enabling states to give companies financial incentives for hiring jobless people has not gained traction, highlighting the complications of government attempts to tackle unemployment. Many states are struggling to pay unemployment benefits, and have already been experimenting with self-funded programs that give companies incentives to hire those out of work. New Hampshire and Georgia, for example, allow companies to try out people who are collecting jobless benefits before hiring them.

Under the federal law, states were invited to submit ideas for “re-employment demonstration projects”—initiatives that motivate companies to hire people who are collecting unemployment checks. The government plans to initially pick 10 winners and reward those states with waivers to federal unemployment-insurance and labor laws, allowing them for the first time to fund programs out of their own unemployment-insurance trust funds. Seven months after the federal law was passed, many states say they will not apply because they don’t have the funding to set up and comply.

Frank Vaccaro of Diamond Staffing Services Inc. recently hired a worker in New Hampshire through a state program that allows candidates to work for up to six weeks, 24 hours per week, at no cost to the company. “We have a small staff, so we couldn’t afford to try out a worker without this program,” he says. “We do work all around New England and if other states had similar programs, we would do more hiring.”