Subsidized employment programs use public funds to create or support jobs for people who can’t find employment in the regular labor market. These jobs are often called “transitional” because they are temporary until program participants can find permanent unsubsidized work. The largest subsidized employment programs in the United States have operated during periods of economic distress, most recently during the Great Recession in 2009-2010. These programs help to ensure that people can continue to earn wages for productive work while also helping to stimulate the economy. Many have argued that subsidized employment programs should be a major component of economic stimulus in the coming months if the unemployment rate remains high. 

MDRC has been studying subsidized employment programs since its founding over 45 years ago. This series profiles a few of the innovative programs that have participated in our studies using a question-and-answer format.

RecycleForce, a social enterprise based in Indianapolis, participated in the U.S. Department of Labor’s Enhanced Transitional Jobs Demonstration, which provided grants to seven agencies to operate subsidized employment programs. RecycleForce targeted individuals returning to the community from prison. We interviewed Gregg Keesling, President of RecycleForce. 

Does your subsidized employment program target a particular type of job seeker? If so, who is targeted and why?

We employ citizens returning to the community from prison who are deemed medium- to high-risk to recidivate, including some who are homeless when they are released. We target these returning citizens because this is where our intensive program can have the most impact on public safety and workforce development. We employ them as soon after their release as possible and guarantee a transitional job for 120 days. RecycleForce has case management staff who develop a plan of action and work with oversight officers to coordinate work schedules and oversight directives. In Indiana, 53 percent of all people who return to prison are sent back for technical rule violations — that is, not fulfilling oversight directives.[1] As an example, returning citizens who are placed on electronic monitoring (EM) are charged $85 per week.[2] Without employment, they sometimes choose to panhandle or sell drugs to pay for EM, as failure to pay can trigger a technical rule violation. Even the most employable returning citizens find that oversight requirements can be incompatible with employment opportunities in the regular labor market.

What kinds of work do your participants do and what kinds of skills do they learn?

Our work and training are primarily related to recycling, logistics, waste management, and public infrastructure projects. All participants receive basic OSHA and RCRA training,[3] which is important for safely working in these fields. Our employer partners are particularly interested in workers who are trained and have demonstrated experience. The main credentials we deliver are for powered industrial truck operations and HAZWOPER 40 certification.[4] Indianapolis is a hub for many distribution centers like Amazon and Walmart, so certification and hands-on training in powered industrial truck operation helps participants secure living-wage jobs in distribution centers. HAZWOPER training is required in many warehouse settings and for virtually all waste management positions. Handling hazardous material like mercury and lead, a significant part of the work in the RecycleForce warehouse, involves many skills that are transferable to containing a virus. This has resulted in our trained workers being mobilized to help clean Indianapolis during the COVID-19 pandemic.

Your program has been able to place people into jobs very quickly. How are you able to accomplish that?

It is our model! Few employers can accommodate work schedules around criminal justice oversight. Our model allows returning citizens to work and still adhere to oversight. For example, reentry court requires those under supervision to attend classes every Friday afternoon. Additionally, our transitional jobs model is designed to get people trained quickly so they are ready when employment opportunities are available. Although the program is designed to last up to 120 days, OSHA and RCRA training are completed the first week. Powered industrial truck operation and HAZWOPER 40 certifications can be completed within three to four weeks. From day one we talk to transitional employees about moving on to the next job. Most employers — even social enterprises — keep their best workers, but we move those who are most employable out quickly. Our partner Keys2Work has contracts for temporary and temp-to-perm workers, so after the transitional period many participants who are not yet ready to move into full-time employment are engaged with Keys2Work. The Department of Public Works (DPW) is one of our best temp-to-perm employers. When permanent positions are available, DPW hires from the cadre of workers we send to them. These union positions start at $20 per hour. Finally, those who move into unsubsidized employment that does not work out — for almost any reason — are invited to return to RecycleForce to work as they reengage with job developers to secure their next job.

How is your program funded and what would it take to operate on a larger scale?

RecycleForce’s annual budget is around $4 million, with about half of our revenue from the business and half from grants and contracts. Our federal funding comes from U.S. Department of Labor Reentry of Ex-Offender discretionary grants, the U.S. Department of Health and Human Services Community Economic Development program, and U.S. Environmental Protection Agency workforce development for HAZWOPER 40 training. Local and national foundations provide support as well. Over the course of our 14 years, the ratio of business-to-grant revenue has ranged from 60:40 to 40:60. As a recycling business, our revenue is tied to commodity markets for gold, copper, steel, and plastics. Our funding is also impacted by the cycles of discretionary grants. We have yet to find a dedicated funding source for subsidized employment and believe this is necessary to develop operations to scale. Recently our partner Keys2Work received the first local funding for a subsidized employment program to serve individuals experiencing homelessness. Many returning citizens are homeless and, as already mentioned, panhandle to pay electronic monitoring fees and other costs that the courts and oversight place on them. When local police identify panhandlers, they refer them to the employment and services offered through this project. The city uses a portion of its parking meter fees to pay our workers to remove graffiti and work on community beautification projects. These projects could be a model to expand subsidized work opportunities to other populations and/or other communities. RecycleForce has proven that offering wage-paying subsidized jobs is a cost-effective way to bring the least employable into the labor market.

How has your program been affected by COVID-19?

RecycleForce has remained open during the pandemic, as it has been deemed an essential business. We provide workers for sanitation routes with DPW and provide bus clean-up for the Department of Public Transportation through Keys2Work. We are storing supplies (water, hand sanitizer, rubber gloves, and masks) for the Office of Public Health and Safety (OPHS). Our workers unload semis of supplies at our docks and use our box trucks to deliver loads to homeless shelters and community centers as directed by OPHS. We assisted a local food bank by sorting, packaging, and delivering 40,000 pounds of fresh produce to low-income families in a 12-hour period. Early on, we provided personal protective equipment to oversight officers. We have seen the tremendous pride that returning citizens have from being applauded and honored for their work helping to build up the community. We also are helping these workers become eligible for stimulus checks. We have helped dozens of our participants file taxes from previous-year earnings or register as a nonfiler. This may be the biggest impact that COVID has made. Those who have been looked down upon are delivering important services and are also a part of the labor force that receives a stimulus for working. All our activities during the pandemic have been possible because of the federal and local support of our subsidized employment model. The 117 people who earned a check last week will be a bit less in need of food, housing, and child-care help. Subsidized employment is not a panacea, but it is a way to help those most in need earn a living in a wage-paying job that helps the community while lessening the financial burden on society.