L.A. OKs Job Grant to Staples

Los Angeles has authorized a $220,000 job-training grant to office supplies chain Staples Inc. despite concerns that the jobs will pay $6.75 an hour--below the city’s “living wage” guidelines.

The program, proposed by the retailer, calls for training 200 full- and part-time workers for jobs at more than two dozen Los Angeles-area Staples stores. It was approved by the city’s Community Development Department, which jointly oversees the federal program with the city’s 51-member Workforce Investment Board.

City officials said the two-year contract will help chronically unemployed people--many of whom don’t have high school diplomas or work experience--get jobs for which they might not otherwise be eligible. But the Staples deal has triggered a debate over the types of jobs the city should foster, with critics saying it appears to violate the board’s own policy that training funds be directed at “occupations with career paths that lead to self-sufficiency.”

“It’s important that we act strategically to use the resources that we have to fund living-wage jobs with career ladders,” said Nona Liegeois, a staff attorney with the Legal Aid Foundation of Los Angeles and a member of the Workforce Investment Board. “The fear is that we have people working in [low-wage] jobs . . . who don’t move up.”

Board members did not vote on the Staples contract because city staff had the discretion to pursue it without board approval. But debate over the deal has helped craft a more pointed strategy to ensure that Staples meets its obligations and that key growth industries are targeted under future contracts, board and city officials said.

The city’s Community Development Department agreed to approve the Staples deal only afterassurances that the company would pay health benefits to full-time workers, offer career advancement and other bonus opportunities and accept only the hardest-to-place applicants, such as welfare-to-work participants and others with no work history or high school diplomas, said Ann Giagni, director of the Community Development Department’s work force development.

Staples officials declined to discuss the contract in advance of its roll-out later this month.

Debate over the deal comes at a time when city officials, labor leaders and community activists increasingly are demanding that government funds support only living-wage jobs--defined as paying $7.72 an hour with benefits or $8.97 without--or those that boost families out of poverty.

The Staples program underscores the challenge of finding employers willing to offer such jobs to longtime welfare recipients and others with few or no skills, particularly as the economy slows.

“Living-wage jobs are the ideal situation. [But] I don’t know in today’s market where any employer would take somebody who’s been chronically unemployed and pay them a living wage,” said Diana Peterson-More, a Pasadena-based entrepreneur who chairs the Workforce Investment Board’s Operations Committee.

Retail has long been left off the list of industries targeted by economic development practitioners out of concern that the sector offers low wages with little room for career advancement. But Staples’ unsolicited pitch to the city triggered a debate on the role certain retail jobs could play as a steppingstone for toughest-to-serve job seekers.

“Although the retail segment of the labor market universally pays low wages, will the City [Workforce Investment Board] distinguish between retailers who compensate with wages only and retailers who also compensate with benefits and provide in-house training and promotional opportunity?” asked a March memo from Giagni to the board.

Workforce Investment Boards were created by Congress under the 1998 Workforce Investment Act, which replaced the Reagan-era Job Training Partnership Act and retooled the country’s approach to work force development. The massive program has entered its second funding year, but many local cities and counties across the country--Los Angeles included--are only now setting policies and funding programs under the complex law.

The new law aims to better serve private employers and match job seekers with those industries in need of workers. Fifty-one percent of members of Workforce Investment Boards, which replaced the Private Industry Councils, are private-sector representatives such as Peterson-More.

The act came on the heels of welfare-reform legislation, and in a similar spirit emphasizes employment more heavily than training. It serves a broader audience than the Job Training Partnership Act did with general services: Anyone can access labor-market information and job listings, and the under-employed also are eligible for help.

But it also makes training harder to come by and pays for less of it. Companies now must foot half the bill for customized training programs, in which businesses conduct their own training with government matching funds and guarantee employment to participants. And in order to be eligible for training, job seekers must show through an extensive assessment process that they lack the skills to find stable work on their own.

There are eight Workforce Investment Boards in Los Angeles County--each appointed by local elected officials through regional jurisdictions--but the city’s Workforce Investment Area and corresponding board are the largest in the state and second largest in the nation, after New York.

In a joint arrangement with Los Angeles officials, the board is charged with overseeing what probably will amount to hundreds of millions of dollars in federal funding by the time the act comes up for renewal in 2005. Funding to the city for the first two years has totaled $157 million. The board also oversees welfare-to-work funding. Welfare participants will be moved into the work force program as one-time welfare-to-work funding runs out, Giagni said.

The Staples contract is Los Angeles’ first customized training grant under the Workforce Investment Act. The $3.1-million budgeted for customized training this year is just one component of the federal Workforce Investment Act, which also funds basic job-search services and a massive youth employment effort.

But few employers have expressed interest in the training, and many have no knowledge of it, said board Executive Director Michelle Douglas. Douglas said it was difficult to get employers to participate under the Job Training Partnership Act, under which training was fully funded. The requirement that companies pay half the costs now “is going to make it even harder.”

Staples already has launched a similar program on the East Coast using Workforce Investment Act dollars and approached Los Angeles city and Workforce Investment Board officials last fall.

The program aims to fill positions for cashiers, merchandise stockers and copy-center assistants. Full-time employees will receive health benefits and are eligible to participate in a retirement plan. Part-time employees get a significantly reduced benefits package. The company also has agreed to aid workers in applying for the earned income tax credit.

Still, some board members remain skeptical about the program and are eager to track its results to ensure trainees are retained and advance to living-wage jobs.

“If they retain the workers for three years and by then they’re making $10 an hour, I’d be happy to say I’m wrong,” said John Grant, staff counsel for Local 770 of the United Food & Commercial Workers.

Grant said he questioned “how much training you need to stock paper clips,” the number of part-time jobs and whether government money should fund a training program that an $11-billion company already operates. But assurances that those with no job history will be trained helped address some concerns.