Center for American Progress

RELEASE: CAP Proposes a National Service Automatic Stabilization Plan to Re-Engage Americans Facing Long-Term Unemployment
Press Release

RELEASE: CAP Proposes a National Service Automatic Stabilization Plan to Re-Engage Americans Facing Long-Term Unemployment

Washington D.C. — More than 2 million Americans who are currently out of work have been looking for a job for 27 weeks or more. A new report from the Center for American Progress lays out a plan for a new funding stream for national service that rises and falls with long-term unemployment rates in order to serve as an automatic stabilizer for these unemployment increases. New positions created by automatic funding would be temporary and specifically designed to phase out when the economy returns to normal. Expanding national service during economic downturns is a win-win-win; this policy puts unemployed participants back to work, benefits the communities that participants serve, and helps to grow the overall economy.

In 2009, Congress endorsed a significant expansion of national service by authorizing 250,000 AmeriCorps positions as part of the Serve America Act but never followed through on funding. If this automatic stabilizing policy had been in place in the wake of the Great Recession, it would have ultimately created over 400,000 temporary national service positions. From fiscal years 2000 to 2014, this policy would have cost an average of $2.6 billion per year, enabling a total of 1.87 million Americans to serve their country during tough economic times and delivering a return on investment of $3.93 to the American economy for every dollar spent.

“National service can directly address the problem of long-term unemployment by immediately putting the unemployed to work while building skills to help them find permanent employment,” says Harry Stein, Director, Fiscal Policy at CAP and co-author of the report. “Policymakers should get started as soon as possible by setting and following through on a course to fully fund the 250,000 positions authorized by the Serve America Act while also building the necessary framework for a future temporary expansion.”

The CAP report notes that policymakers will need to balance several goals to craft a policy for automatic and temporary national service expansions. Parameters include:

  • New service positions should be established rapidly to respond to long-term unemployment before jobless workers permanently exit the labor force.
  • The rate of this expansion should not exceed the rate that nonprofits can expand their own capacity to manage new national service positions.
  • The expansion should be designed to avoid an abrupt cut in support for national service as these temporary positions expire.
  • Specifically, CAP proposes the automatic creation of 25,000 positions for every one-tenth of a percentage point by which the long-term unemployment rate exceeds its historical average of 1 percent.

Long term-unemployment remains a serious national economic problem. Expanding national service would directly address this problem in addition to delivering all of the other benefits the nation accrues from national service.

Click here to read: “Expanding National Service to Address Long-term Unemployment” by Harry Stein and Shirley Sagawa.

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For more information or to speak with an expert, contact Allison Preiss at apreiss@americanprogress.org or 202.478.6331.