Hamersma, Purser Quoted in ProPublica Article on the Work Opportunity Tax Credit, Temp Workers
August 24, 2022
Congress passed the Work Opportunity Tax Credit (WOTC) to encourage businesses to hire and retain marginalized workers and lawmakers made it clear that the credit should be used for permanent employment—not dead-end temp jobs.
Instead, the $2 billion program is now handing out hundreds of millions of dollars a year in subsidies for the very jobs lawmakers wanted to avoid rewarding. In addition, some of the credit’s biggest beneficiaries are temp agencies with long records of labor violations.
In studies published from 2003 to 2011, Sarah Hamersma, associate professor of public administration and international affairs, found that jobs subsidized by the WOTC typically lasted only nine months and that temp jobs were even shorter. While she concluded the WOTC may boost welfare and food stamp recipients’ earnings initially, she says, “I didn’t find evidence it helped them get or keep jobs in the long run.”
Temporary staffing agencies might seem like an odd fit for a program designed to incentivize permanent employment. By definition, temp agencies exist to provide short-term help. And blue-collar temps typically earn less than conventional employees and rarely receive paid days off, health insurance or retirement benefits.
To find people willing to put up with those conditions, temp agencies “need exploitable disposable labor,” says Gretchen Purser, associate professor of sociology. People with criminal records “experience a whole bunch of barriers in the labor market that lead them to these jobs as a last resort.”
Read more in the ProPublica article, "A Tax Credit Was Meant to Help Marginalized Workers Get Permanent Jobs. Instead It’s Subsidizing Temp Work."
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