JPMorgan-to-Welfare Worker Devastated When Funds Cut

When Carol Perkins arrives at the office, she checks e-mails, organizes files, and calls corporations as part of a fund-raising effort.

Perkins, 60, works at the Urban League of Essex County in New Jersey through a U.S. senior-citizen jobs program that used to pay for an average of 20 hours a week of training and work. In April, Congress sliced tens of millions of dollars in funding, and Perkins’ schedule was cut by at least half -- forcing her to turn to welfare to pay the rent after her monthly take home fell more than $100.

“I’m devastated,” said Perkins, of Montclair, New Jersey, who said her previous administrative support jobs at New York- based JPMorgan Chase & Co. (JPM) and Bear Stearns Cos. were eliminated. “We need jobs. It’s as if they have forgotten about us seniors and we’ll wind up out on the street. I just want to work.”

The funding cut illustrates the conflict between the need to put people back to work and the mandate of a 12-member congressional supercommittee to cut $1.5 trillion from the deficit. Scaling back the job training for U.S. seniors will mean fewer work opportunities as President Barack Obama pushes a job stimulus plan, unveiled Sept. 8, aimed at easing unemployment that has been 9 percent or higher for five straight months.

It also shows how cuts to federal spending can exacerbate the jobless situation and shift seniors into other public assistance programs, negating some of the savings, according to groups that help run the training. Organizations said they’ve reduced paid training, work hours, and in some cases are turning away seniors seeking the job-based training.

Homeless Seniors

Many in the program, which is aimed at unemployed, low- income people who are 55 or older, need the paid training and work: Almost 40 percent were homeless or at risk of being homeless in 2009, according to the Labor Department.

The unemployment rate for people age 55 and older is at levels not seen since at least 1948, according to the Bureau of Labor Statistics. It peaked at 7.3 percent in 2010 and was at 6.6 percent in August.

In 2000, the seniors’ rate was below 3 percent.

Older Americans are more likely than any other age group to remain out of work for 99 weeks or more, according to a December 2010 report by the Congressional Research Service, which provides policy and legal analysis to lawmakers.

45% Funding Cut

Funding for the Senior Community Service Employment Program was cut 45 percent, to about $450 million for the year that ends June 2012, from $825 million approved in 2010, under an April budget deal forged by Congress and Obama. The previous year included $225 million from federal Recovery Act money, and excluding that appropriation the drop was 25 percent, according to the Labor Department.

The Obama administration in proposing the cut found “little evidence” that spending on seniors’ job training “successfully promotes unsubsidized employment or provides cost-effective community service.”

Cutting the program is necessary as the government seeks to close the deficit, Thomas Schatz, president of Citizens Against Government Waste, a Washington-based advocacy group, said in an interview.

“There are ways to help people find work without spending a lot of money,” Schatz said. “The objective has to be to help as many as possible with the least cost.”

Program Merits

Shrinking the seniors jobs program shows how efforts to curb the deficit by slashing spending can exacerbate the jobless situation, said Lita Levine Kleger, a spokeswoman for Arlington, Virginia-based Experience Works Inc., which helps low-income seniors with employment.

“I understand there’s this conversation in Congress about making tough choices, but there has to be some discussion on the merits of what actually works,” Levine Kleger said in an interview. “This program gets people jobs.”

Experience Works cut about 140 staff positions and closed a customer-service center in Waco, Texas, Levine Kleger said. They’re turning away interested applicants, she said.

Participants in the U.S. program generally earn minimum wage and work an average of 20 hours a week. The goal is to help participants get paying jobs, according to the Labor Department.

‘Unnecessary Spending’

Cutting the training and work effort makes little fiscal sense, according to lawmakers such as U.S. Representative Charles Rangel, a New York Democrat.

“If you take away this, what other problems are you creating?” Rangel said in an interview. “What are seniors supposed to do if they can’t find a job and are on a limited income? When you talk about taking away money from seniors who are fragile economically, that has an effect. I wish when people talked about spending, they’d talk about cutting unnecessary spending.”

Republican Representative Michael Simpson of Idaho, a House Appropriations committee member who sits on three panels, said the senior training service is an employment initiative that simply fell victim to the deficit-reduction drive.

“I don’t think anybody is going to be pleased,” Simpson said in an interview. “The reality is that as we try to reduce spending, it’s taken a larger budget reduction.”

To qualify, a seniors’ income must be 125 percent of federal poverty guidelines, or $13,613 a year for a family of one, in most states.

Participation is expected to fall to 70,537 people in the year ending June 30, 2012, according to an agency report. That’s down almost half from 130,223 the agency estimated for 2010.

‘It’s Absurd’

“It’s absurd,” Marc Morial, chief executive officer of the National Urban League Inc., a New York-based civil rights group that focuses on economic issues, said in an interview. “Obama is talking about jobs, and this is a jobs program. The best deficit reduction program is a jobs program.”

Cutting the funds also worsens the U.S. deficit as seniors have less disposable income to spend, pay less in taxes, and rely more on government aid such as food stamps, he said.

Valerie Farrer, 77, of Verona, Wisconsin, in September 2009 qualified for the aid, working in the town library and eventually teaching jobs skills at Experience Works.

Her schedule has been scaled back to 22 hours a week from 28 hours following the budget cuts, she said, and her income has dropped $200 a month. Farrer said she doesn’t turn on the air conditioner, has cut back on groceries and limits herself to necessities to help save money.

She gets some help from Social Security. That income is drained on such expenses as supplemental Medicare insurance and car insurance, she said.

‘It’s Devastating’

“It’s devastating when the hours are cut,” Farrer said in an interview. “You feel as though you’re trapped. With the program, there’s a reason to get up every day. Then the hours are cut and it turns back into depression.”

Fallout is being felt at the Urban League of Essex County in Newark, New Jersey, which lost about $1.2 million in funding on June 30, Vann Holland, director of workforce operations, said in an interview. That left enough money to help 132 participants, said Holland, not enough for the 500 seniors currently being aided. To help stretch dollars, training hours were reduced to 10 hours from 20 hours a week, he said.

“We may run out of money end of December or January,” he said. “We may have to end the program.”

The National Caucus and Center on Black Aged Inc. in Washington, which assists low-income seniors, fired nine full- time staffers, and the 1,800 participants in D.C. and eight states now train 15 hours a week, down from 20 hours, Karyne Jones, chief executive officer, said in an interview.

Food Stamps

“Some participants have lost their apartments or have gone to agencies to get food stamps,” Adrienne Wiggins, the program’s coordinator for the group, said an interview.

Barbara Oliphant, 65, of Washington, earned about $660 a month for 20 hours of training as a job counselor through the program. With a reduction in hours, she said in an interview that she now gets about $500 for 15 hours.

“It’s had a big impact,” said Oliphant, who lives with her son and pays for utilities and her groceries. “With the cutbacks, it’s just enough to get by. It’s very stressful.”

For Perkins, the reduced training hours have left her worried about paying her rent, she said. She no longer buys vision contacts and she scrimps on groceries. Some weeks she skips doing her laundry, she said.

“I don’t understand what Congress is doing,” Perkins said in an interview. “You’re older now but you still have skills. This program gives you hope.”

To contact the reporter on this story: Stephanie Armour in Washington at sarmour@bloomberg.net

To contact the editor responsible for this story: Timothy Franklin at tfranklin14@bloomberg.net

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