Task Force to Focus on Creating Jobs

Gov. Pete Wilson said Monday that the key to making welfare reform work is to expand the California economy with the kinds of tax cuts and government downsizing he has tried to sell in the Legislature since his reelection.

The governor assigned a task force of business executives Monday to consider whether those economic stimulus ideas would help create some of the 750,000 jobs that state officials say will be needed for the state’s welfare recipients.

He said the group will also examine possible tax credits for employers who hire from welfare rolls and training programs for recipients. But the governor made it clear that he wants the government to focus on the measures he considers essential for a healthy economy.

“It comes back to tax structure, it comes back . . . to what kind of legal system we have, to whether or not we are engaging in regulatory excess--all of those things that we . . . keep pounding away on are really essential,” Wilson said.

Wilson announced a welfare reform proposal last January that is being considered in the Legislature. His plan ordered welfare recipients to work in order to obtain their benefits and limited the amount of time they could receive assistance.

The most boggling issue facing state leaders trying to reform welfare, however, is the issue of creating an enormous job base for entry-level workers.

“Do we have an answer?” Assembly Speaker Cruz Bustamante (D-Fresno) told reporters last week. “No. We don’t have a clue how we are going to do that. . . . That’s a very big hole in the plan.”

Last year, with a booming economy, California created just slightly more than 400,000 jobs. In the next three years, officials say, it will need nearly twice that many for welfare recipients alone.

In addition to those on welfare, about 1 million people are currently unemployed and not receiving welfare. And officials said an additional 529,000 people who have dropped out of the labor force are not counted in the state’s unemployment calculations but might seek work.

“The economic challenge is to expand the overall ‘job pie’ that offers employment opportunities to all workers,” according to a welfare report released Monday by the state’s Trade and Commerce Agency.

Partly because of the state’s robust economy, Wilson has had trouble trying to convince the Legislature that it needs to pass his plans for tax cuts, tort reforms and a reduction in environmental regulations.

On Monday, Democrats said they were not swayed by the governor’s latest argument linking the success of welfare reform to his economic package.

“It’s an old recipe that obviously didn’t work,” said Sen. Hilda Solis (D-El Monte), co-chair of the Legislature’s subcommittee on job creation for welfare. “I believe that he’s obviously just taking a chapter out of his long history of trying to provide incentives for big corporations to pay less taxes.”

Wilson appeared Monday at the computer manufacturing plant of Packard Bell NEC. The company moved to Sacramento barely three years ago and hired 30% of its initial 4,000 workers from welfare rolls or other government assistance programs.

These are not the kind of jobs that Wilson wanted to emphasize at his event, however.

Packard Bell received a state tax credit over five years of $23,400 for each worker it hired from public assistance. The corporate benefit was available only because the company relocated to a former military base that was turned into an enterprise zone.

On Monday, Wilson downplayed the significance of tax credits to help create jobs for welfare recipients--although he did not rule it out.

Instead, the governor said testimony in hearings indicates that businesses want a reliable worker--not a subsidized one.

“What you are going to find is that most people are not looking for a subsidy as employers,” Wilson said. “What most of the employers told us is that what they really wanted is people who came to work ready to work.”

Wilson echoed a recent report from a business group assigned by the National Governors Assn. to examine job creation for new welfare priorities. It concluded that “businesses are more interested in productive, unsubsidized workers that in nonproductive, subsidized labor.”

At the same time, Wilson said the state is studying a plan in Oregon in which employers who hire from the welfare rolls are entitled to that person’s assistance check for six months. “That’s one possibility,” he said.