Walmart, national employment firms, milk job placement program for billions while giving crappy temp jobs to clients of the program

I had never heard of the Work Opportunity Tax Credit (WOTC) until I read the article mentioned.

WOTC was meant to help low-income communities and hard-to-place workers find jobs, with subsidies to employers who gave these potential employees a chance in entry-level positions, helping get people into permanent employment.

But, of course, that’s not how Wall Street has done it, because Wall Street is a giant blood-sucking money funnel that will find any way to cheat that it can.’

Instead of helping down-and-out Americans, huge corporations like Walmart, along with massive employment agencies like Kelly and others, have used the money to subsidize shitty dead-end temp jobs that they would have had to fill anyway, but now they can fill those jobs AND get paid money on the side for doing it.

When Congress passed the [WOTC] to encourage businesses to hire and retain marginalized workers, 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. ProPublica analyzed data from nine states’ WOTC applications and found that nearly a quarter of the jobs certified for the tax credit between 2018 and 2020 were with temp agencies. The numbers become even more striking when the analysis is limited to one eligible group — workers with felony records. Thirteen of the top 14 employers certified to get credits for those workers were temp agencies.

In addition, some of the credit’s biggest beneficiaries are temp agencies with long records of labor violations.

Express did not respond to multiple calls and emails. Tennant, which benefited from Bush’s work but wasn’t eligible for the credit because it wasn’t his direct employer, declined to comment.

Coming out of the welfare reform movement of the mid-1990s, the WOTC aimed to give groups like food stamp recipients, residents of high-poverty areas and formerly incarcerated people access to long-term employment. In exchange, companies could write off thousands of dollars from their taxes for each worker they hired.

But the program’s rules didn’t match that intent. To receive the minimum tax credit — worth 25% of a worker’s wages — a company need only employ a worker for 120 hours, or about three weeks of full-time work. Employers can get the maximum credit — 40% of a worker’s wage, up to $2,400 — after just 10 weeks. The criteria say nothing about type of employer or the quality of the job and don’t forbid companies with a history of workplace violations from participating.

In the absence of tighter rules, the WOTC has become a financial boon for large low-wage employers with high turnover, including Walmart, Dollar General and Amazon. Those three companies are the top recipients of the tax credit in ProPublica’s analysis.

Walmart and Dollar General did not respond to requests for comment. Amazon spokesperson Barbara Agrait said, “Like many other companies, we utilize the Work Opportunity Tax Credit and we believe it helps to break down barriers some may face when seeking employment and encourages a strong and diverse workforce.”

But few industries have benefited as much as temp agencies.

Corporate filings by publicly traded temp agencies reveal how big a windfall the tax credit has been. One company, Kelly Services, reported receiving tax credits, “primarily” WOTC, worth $164 million over 10 years, or 48% of its U.S. pre-tax earnings. TrueBlue, which owns the day-labor firm PeopleReady, reported receiving tax credits — also described as “primarily” WOTC — worth $114 million over the past 10 years, or 29% of its pre-tax income. The credits reduced TrueBlue’s federal income taxes by 69% and Kelly Services’ by 73%.

“Everybody’s winning except the formerly incarcerated person,” said Andrea C. James, executive director of the National Council for Incarcerated and Formerly Incarcerated Women and Girls.

A few years ago when I was in-between jobs I registered with some temp agencies. Even got a temp job through one, but it was a local agency and not one of the national ones.

To this day I still get emails from the temp agencies and I am amazed at how shitty their job matches are — when I specifically asked to only be notified about jobs in one particular field.

They love to send me nursing jobs. Nothing in my background, work experience or job-match preferences would even hint that I want a nursing job.

I concluded that the national job search agencies are kind of scammy.

This only proves it.

You can read the rest of Emily Corwin’s ProPublica article at this link.

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