Mississippi STEPS up as national model for ‘governing in prose’

*First appeared in the Nov. 21 edition of the Laurel Chronicle

Y’all remember a few years ago when the President and Congress tried to stimulate the nation’s economy through the “stimulus package,” right?

You may recall the stimulus – officially named the American Recovery and Reinvestment Act, or ARRA – totaled some $787 billion in government spending (the total was later revised upward to about $820 billion).

It was costly and controversial. It represented the ultimate manifestation of the Democrats’ government dream: Lots and lots of new (and, to me, quite unnecessary) spending. For example, the Census Bureau, which was prepping for the decennial count in 2010, got an extra billion dollars.

I didn’t support the logic behind the so-called “economic stimulus package,” and I still think it was mostly a waste of lawmakers’ time and taxpayers’ money. With that said, here’s the rub: What Congress dictates as spending policy, states must implement as programs. So that’s what we did here in the Magnolia State.

One part of the massive stimulus bill included funding for the Temporary Assistance for Needy Families (TANF, formerly referred to as “welfare”) Emergency Contingency Fund to help states either expand existing subsidized employment programs or to create new ones. Mississippi didn’t have an existing subsidized employment program but was eligible to draw down roughly $52 million in no-strings-attached federal funds to be used only for that purpose.

While Republican Gov. Haley Barbour had a philosophical opposition to the stimulus package, he likewise had a strong reputation as a pragmatist. This is an instance where that pragmatism would be on display for the state and nation.

Gov. Barbour chose to utilize these federal dollars as part of the state’s newly-created subsidized employment program dubbed “STEPS” (a short acronym for a lengthy program title: “Subsidized Transitional Employment Programs and Services).

The STEPS program, jointly operated by the Mississippi Departments of Human Services and Employment Security, provided a wage subsidy to employers who hired a specific population of folks (particularly, low-income Mississippians who also had children). The STEPS moniker alluded to a hallmark of the program, which was the “stepping” down of wage subsidies (from 100 percent to 25 percent) over a six-month period.

Unlike some programs in other states, STEPS only provided wage subsidies to new hires in high-growth and sustainable private sector jobs (with the exception of public hospitals, which were also eligible), with a particular emphasis on small businesses.

The main goal of the program was to help both employers hire workers during the economic downturn while facilitating valuable on-the-job training opportunities for workers so they could ultimately land unsubsidized positions. Toward that end, employers who participated in the program had to demonstrate a commitment to retain new hires after the STEPS subsidy ended.

Despite some challenges not mentioned here, the program was, in my opinion, a pretty darn good success story.

But don’t just take my word for it; Mississippi STEPS garnered national attention. The New York Times wrote fondly of the innovative STEPS program, while nonpartisan research groups like the Pew Center examined Mississippi STEPS as a case study. More recently, the Rockefeller Foundation funded a retrospective study of select subsidized employment programs, including Mississippi STEPS.

The study found that despite its relatively short duration, STEPS reached an “impressive scale,” with nearly 1,000 employers and 3,228 individuals participating. About half the subsidized workers were retained after the subsidy period, a much higher percentage than in other study sites. Further, STEPS participants also saw similar employment gains regardless of race – an “important achievement given differences in unemployment rates statewide between Black and White workers.”

Participating employers fell into four main sectors: Manufacturing, wholesale and retail trade, hospitality and leisure, and social services. Eighty percent of employers said that subsidized workers were “equally or more skilled than their usual hires” and just as dependable. The year following the STEPS program, participants saw their average annual earnings rise by 34 percent. Among the long-term unemployed, annual earnings increased substantially from $934 the year prior to the STEPS program to $8,040 the year after the program ended.

The STEPS program provided a meaningful opportunity for many Mississippians, especially those with significant barriers to employment, to increase earnings and get one step closer to self-sufficiency. The program wasn’t perfect, of course, and I wouldn’t argue with those who say funding for subsidized employment programs isn’t a proper expenditure of taxpayer dollars.

But Congress gave us lemons, and we made some pretty tasty lemonade-spiked sweet tea. My point in all of this is that there is a difference in philosophical opposition to legislation and responsible governance. The stimulus package passed Congress and was signed into law by President Obama. It wasn’t something the Republican Governor of Mississippi supported, but opposition to the law didn’t mean ignoring opportunities to help some of the neediest Mississippians find work experience, either.

And that’s what we did. It’s like they always say – you campaign in poetry but govern in prose. The STEPS program was an exercise in prose writing for the Barbour administration.