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Weatherization Program Hits Rough Stretch

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With the unemployment rate nearing 10 percent, people are starting to wonder why the massive federal economic stimulus package hasn't put more people to work. One of the programs that was supposed to produce tens of thousands of jobs quickly, is encountering some unexpected hangups.

STEVE INSKEEP, host:

Now as unemployment continues to rise, some people are wondering why the government's economic stimulus package has not put more people to work. We're going to be talking about that a good deal on the program today.

NPR's Elizabeth Shogren reports on one program that was supposed to produce tens of thousands of jobs, but has encountered some unexpected hang-ups.

ELIZABETH SHOGREN: Richard Schlimm is the executive director of a network of nonprofit groups in Wisconsin. They've been adding insulation and upgrading furnaces in low-income homes for 30 years, and Schlimm says they're geared up to help spend the $5 billion the federal government has targeted for weatherization.

Mr. RICHARD SCHLIMM (Executive Director, Community Action Network): The Community Action Network has been ready since early March. And it's almost become analogous to standing in the outfield waiting for the game to start.

SHOGREN: His organizations expect to hire about 500 extra people with stimulus funds. They'll do energy audits on houses and apartments, and then replace old appliances, tape leaky ductwork, and in some cases, install new furnaces and air conditioners.

Mr. SCHLIMM: Here we are in July and unable to implement the plans that we had in place in early March. It's been very frustrating.

SHOGREN: Gil Sperling concedes that expanding the weatherization program hasn't been the quick job producer many people expected. Sperling directs the weatherization program for the Department of Energy.

Mr. GIL SPERLING (Director, Weatherization Program, Department of Energy): The fact that it's taken more time to put that in place is frustrating. But the end result, I think, is going to be outstanding.

SHOGREN: One factor slowing the program down is that Congress required that people hired with stimulus money be paid a prevailing wage under what's called the Davis-Bacon Act. The old, much smaller weatherization program never required this. Prevailing wages for the closest equivalent, say construction jobs, are much higher than what workers normally get for caulking windows.

Mr. SPERLING: Fifty-seven-fifteen in New York for residential construction, is the prevailing wage.

SHOGREN: Sperling says if weatherization labor costs that much, many energy-saving techniques would not be cost effective.

Mr. SPERLING: So you really couldn't do very much to help low-income families.

SHOGREN: Sperling says the government is going to come up with new lower wages for weatherizing jobs, but it'll take some time.

Mr. SPERLING: We've had a snag with getting all the Davis-Bacon issues resolved and implemented. I believe we are on the verge of resolving that issue over the next six to 10 weeks, at the most.

Mr. JOHN HAMILTON (Director, Weatherization Programs for Cook County): It's, after all, the federal government, and I'm not completely surprised when they take a long time to get things done.

SHOGREN: John Hamilton heads the nonprofit that runs weatherization programs for Chicago and the rest of Cook County, where prevailing wages for construction workers range from $35-52 an hour.

Mr. HAMILTON: But let me just say we're eager and anxious to have the issue resolved.

SHOGREN: He expects to be able to pay his workers between 10 and $20 an hour. Over the last couple of weeks, the Energy Department has approved weatherization plans for more than half of the states and sent more than a billion dollars their way. But some states, including Indiana, are still waiting. Sherry Seiwert is executive director of the state agency that oversees Indiana's weatherization program. She says her state is already a month behind schedule.

Ms. SHERRY SEIWERT (Executive Director, IHCDA): I'm disappointed not to have folks put to work by now.

SHOGREN: Indiana usually gets about $6 million from the federal government for this program. And this year, it expects to get $131 million.

Ms. SEIWERT: That's an enormous amount of money to get out the door. We hope to impact 30,000 Hoosier households in the next 13 months.

SHOGREN: The state's program is bogged down over a dispute between nonprofits and the Indiana Builders Association over how much of the funding each group will get. Similar disputes are slowing approval of other state plans. The weatherization program will spend an average of $6,500 per household. The Energy Department says it will ease the pain of the recession by lowering energy bills for hundreds of thousands of families. But it will take four to 10 years to recoup the weatherization costs in energy bills.

Elizabeth Shogren, NPR News, Washington.

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