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Welfare worker tax credits
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February 3, 1997: 7:58 p.m. ET
Companies say incentives aren't worth hiring people on long-term welfare
From Correspondent Kelli Arena
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WASHINGTON (CNNfn) -- Moving people off welfare and onto payrolls isn't going to be easy, and the administration knows it.
That's one reason the president is offering a tax break for corporations that hire welfare workers -- a $5,000 tax credit on the first $10,000 in wages paid to long-term welfare recipients.
"It's targeted toward people on welfare for a long time," NEC chairman Gene Sperling said. "It is not likely to just reward companies for people they would have hired anyway, but rather to provide those companies who are trying to do the right thing."
But if the past is any indication, the tax break won't make much of a difference to employers.
According to a 1994 audit by the inspector general of a similar program -- the targeted jobs tax credit -- incentives don't pay. The study found tax credits did not induce employers to hire workers they wouldn't have otherwise, and the costs of the program exceeded its economic benefits.
What's more, companies say economic realities make hiring long-term welfare recipients difficult.
"You've got the dilemma that two out of every three jobs is being created by a small business that doesn't necessarily have expertise or staff to work through the human resources side to move people through welfare to work," Jeffrey Joseph of the Chamber of Commerce said.
Business is already faced with an array of expensive training issues, ranging from moving people from school to work, to re-training workers they already employ.
Adding welfare workers to the mix, even with incentives, is a challenge many businesses say they are not ready to meet.
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