Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Supervisor Ray Mueller, Third District
Subject: Proposal for the Workforce Entry & Economic Growth Initiative: Wage
Subsidy Program to Create 200 New Full-Time Jobs in Small and
Medium-Sized Businesses
RECOMMENDATION:
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Adopt a resolution:
A) Approving the Workforce Entry & Economic Growth Initiative; and
B) Authorizing the County Executive to allocate up to $2,000,000 toward the Initiative; and
C) Authorizing the County Executive, or designee(s), to issue a Request for Proposals (RFP) to select a qualified organization to administer the program and, in consultation with the County Attorney, to negotiate and execute an agreement with the selected organization.
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BACKGROUND:
Individuals transitioning from degree or certificate programs to the workforce are increasingly facing barriers to hiring due to their lack of experience in their selected industry. These barriers apply both to young adults seeking their first, entry-level job out of college as well as to older adults who returned to school to improve or redirect their career paths in a new discipline. In the current economic market, hiring for entry-level positions is challenging, and the San Mateo Daily Journal has reported that economic analysts call it a “no hire, no fire economy.” The Public Policy Institute of California has stated that workers ages 20-24 in California experienced an unemployment rate of 10.8% in May 2025, nearly three times the County’s typical overall rate. Although statewide statistics are reported for the 20-24 cohort, this trend reflects broader barriers faced by early-career adults at any age.
According to a 2019 nine-county Bay Area study by the Federal Reserve Bank of San Francisco and the San Francisco Office of Financial Empowerment, the population of recent graduates often also enters the workforce with substantial student-loan obligations, identifying an average student-loan balance of $36,243, while the average undergraduate borrower in the University of California system graduates with approximately $18,200 in debt, as reported in the University of California’s Accountability Report of 2025.
DISCUSSION:
Employees Entering or Returning to the Workforce:
The purpose of this Workforce Entry and Economic Growth Initiative is to accelerate hiring of entry-level employees and support San Mateo County’s private-sector small and medium-sized businesses by subsidizing early wages for new full-time hires who recently earned degrees and are entering or returning to the workforce in career-track positions paying at least $55,000 annually. An initiative of this nature can strengthen workforce entry pathways, which can alleviate the financial pressures of student debt through stable employment.
Establishing a minimum salary threshold ensures participating employers offer financially sustainable employment, while a capped subsidy model ensures the subsidy goes to businesses that need it.
Small and Medium-Sized Businesses:
This Initiative supports small and medium-sized businesses by:
1. Reducing upfront hiring costs through a retroactive wage subsidy capped at 50% of the first $65,000 salary.
2. Supporting recruitment for professional, technical, and skilled positions paying $55,000 or more.
3. Improving workforce stability and business growth capacity.
4. Ensuring public funds directly support verified job creation through a reimbursement-based structure.
Program Design:
Program Goal
Create 200 net new full-time private-sector jobs for San Mateo County residents entering or re-entering the workforce after earning a degree or trade certificate.
Wage Subsidy Structure
• 50% wage subsidy for the first three months of employment, paid retroactively as a grant to an employer to reimburse previously paid salary costs.
• Eligible salaries: minimum $55,000 annually.
• Subsidy applies to the first $65,000 of annual salary only. Positions may exceed $65,000 in total salary, but the subsidy is capped at 50% of $65,000.
o Minimum subsidy per employee: $6,875 (1st 3 mos. of $55,000/yr. salary)
o Maximum subsidy per employee: $8,125 (1st 3 mos. of $65,000/yr. salary)
• Maximum subsidy cost: $1,625,000
• Applications must be jointly submitted by an eligible business and an eligible employee.
Business Eligibility
• Private-sector, for-profit small and medium-sized businesses with 500 or fewer employees. Trade businesses are eligible.
• Maximum of three subsidized hires per business during the duration of the program.
• New position(s) must represent a net increase in full-time employment relative to a six-month baseline.
• New position(s) must be provided for at least one year of full-time employment, with benefits.
Employee Eligibility
• Earned an associate’s degree, bachelor’s degree, or trade certificate issued by a college within past 3 years.
• Legally authorized to work in the United States.
• San Mateo County resident.
• Excluded:
o Immediate family members of a member of the Board of Supervisors
o Immediate family members of any individual working for the Program Administrator on this project.
• Any individual employee is only eligible for a single subsidy, even if they change employers.
Administration & Accountability
A Program Administrator will be selected through a competitive RFP process to create the Incentive Program. This Administrator will work with the County Executive’s Office to develop detailed guidelines for the application process (including verification of business and employee eligibility), subsidy recipient selection, and subsidy administration, consistent with applicable state and federal law.
To ensure at least medium-term employment opportunities, there is a mandatory subsidized employee retention period of nine months following the subsidy period, with potential exceptions for terminations at no fault of the employer. If this retention period is not met, the subsidy will include claw back provisions to recoup a prorated portion of the subsidy from the employer for non-compliance.
The Workforce Entry & Economic Growth Initiative ensures public investment supports high-quality career-track employment by establishing a $55,000 minimum salary threshold while preserving flexibility for higher-paying positions. By serving 200 participants, the program remains fiscally disciplined, operationally manageable, and capable of delivering measurable workforce outcomes.
Issuing a competitive RFP for program administration will ensure transparency, accountability, and strong program performance.
COMMUNITY IMPACT:
This Initiative helps to expand access to job opportunities for San Mateo County residents, creates pathways for economic mobility for individuals facing economic barriers, assists local businesses, and creates opportunities for adult workers to strengthen their skills and progress toward long-term economic advancement.
FISCAL IMPACT:
Adoption of the proposed resolution would be funded through a General Fund appropriation in Non-Departmental Services or other available fund in an amount not to exceed $2,000,000 to pay for the total program, of which $1,625,000 would be available to fully fund 200 positions at the maximum allowable subsidy level. These funds are included in the FY 2025-26 Adopted Budget.