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Obama unveils new help for unemployed

April 19, 2012: 3:17 PM ET

Some states could soon be allowed to use unemployment funds to subsidize on-the-job training and other re-employment programs.

The Obama administration Thursday launched the effort, which will permit up to 10 states to use administrative funds or their trust funds to implement pilot programs that expedite the return of the unemployed to work.

The initiative is a key part of the president's effort to overhaul the unemployment system. It is part of a series of changes Congress approved as part of the payroll tax agreement in February.

Modeled after the Georgia Works program, the reemployment effort would allow the jobless to participate in on-the-job training programs while still receiving their checks. But states would have the flexibility to design a wide range of programs that involve subsidies for employer-provided training, said Labor Secretary Hilda Solis.

The unemployed face "unique challenges" in getting hired, such as not having the skills needed to perform in new jobs, Solis said. The program will provide incentives to employers to look at this pool when adding to their payrolls.

Advocates for the unemployed have been somewhat wary of changes to the unemployment system. They do not want the safety net to be eroded nor allow the jobless to be used as cheap labor.

Solis stressed that employers participating in the program will still be subject to minimum wage and worker protection regulations.

Several states, particularly Texas, have expressed interest in submitting proposals to join the program. At least seven states currently offer some type of return-to-work initiative.

In Georgia, participants receive a $240 stipend to cover their transportation and other expenses, while also getting their jobless benefits, during their eight-week training.

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About This Author
Tami Luhby
Tami Luhby
Senior writer, CNNMoney

Tami Luhby is a senior writer at CNNMoney and covers income inequality, state fiscal problems, unemployment, housing policy and other economic issues. Luhby previously covered personal finance for Newsday and banking for Crain's New York Business.

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