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Workfare - Welfare With A Twist
Since nearly fourteen percent of all Americans live in poverty, the subject of welfare has become a political hot potato. Politicians anxious to win points by cutting welfare rolls are increasingly favoring "workfare", which mandates programs requiring those on welfare to get job training and jobs. (See Table 1) Workfare can be defined as a government administered policy whereby those in need and without regular employment are obligated to perform a work related activity in return for state income. The word, a catchall phrase for making welfare recipients do something in exchange for their assistance checks, is central to President Clinton's promise to "end welfare as we know it." However, it is a word that has as many definitions as there are experimental workfare programs across the United States. Single Parents Suffer As an increasing number of children in the United States are raised in single parent households, the economic position of these children worsens significantly. On average, single parent families are, much worse off than two parent families. In 1990, the United States defined as poor any family of four whose income fell below $13,359 ($10,419 for a family of three). Among the children in two parent families the poverty rate was ten percent. For children in single parent homes, the poverty rate was fifty-five percent. Some of these differences reflect the mix of people who head such families (single parents typically have lower education) rather than their family structure. It is very clear that single parent families are in a much more difficult position economically. Parents whether married or single face a difficult task of nurturing and providing for their children. Single parents have only two choices: they can either work in the marketplace all the time or they can go on welfare. If single parents choose full-time work, they must concurrently meet the demands of work, the need for child care, and the many daily crises involving raising children. Women from highly advantaged backgrounds (married with good or dual incomes) find these demands very heavy. For mothers with a limited education, with little or no work experience, with young children, it can be an almost impossible task. At present, the only alternative is welfare which is not a very attractive option. Not one single state pays enough in welfare and food stamps to keep a family out of poverty. Adjusting for inflation, benefits are vastly lower than they were fifteen years ago. The welfare system frustrates, isolates, humiliates, and stigmatizes. Even worse is the way welfare treats people who attempt to work their way off of welfare. Welfare benefits are reduced dollars for dollar with earnings. A parent working full time at the minimum wage would have only $2,400 more in disposable income than if they did not work and collected welfare. (See Table 2) The equivalent would be working for $1.20 per hour. Half of the $2,400 comes from the Earned Income Tax Credit (EITC) which the parent would only collect at the end of the year if they bother to submit a tax return. On a daily basis, the parent seems to be working for $.60 cents an hour. Even if they worked full time at $5.00 an hour, their disposable income is only $3,400 higher and they would lose their Medicaid benefits, which is worth several thousand dollars. Welfare administrators around the country find that unless a parent is placed in a full-time job paying $6.00 an hour or more, with full medical benefits, and low day care costs, they are likely to come right back onto welfare. It should come as no surprise that only a small fraction (20 to 25 percent) of the people (mostly women) leaving welfare actually "earn" their way off. Also most of them are the better educated and more experienced people who can command a relatively high wage. States and Welfare Reform States are experimenting with a variety of performance requirements under the loose and somewhat misleading term of workfare. (See Table 3) Workfare, in fact, refers to three distinct types of required activity. (1) Job search programs require welfare recipients to seek employment. In a group job search program, for example, an individual will be required to receive up to a week's training on how to find a job. This may be followed by several weeks of participation in a phone bank where recipients are required to report to the welfare office and explore job openings over the phone under the management and encouragement of a supervisor. These activities may be followed by several weeks of monitored solitary job search by the individual. (2) Education and Training includes basic remedial education, vocational education, on-the-job training, and, in some cases, even post-secondary education. (3) Community Work Service is also called work experience and requires welfare recipients to work part-time or full-time for government agencies or non-profit organizations. Mandatory community service work is intended to reduce the attractiveness of welfare by attaching a labor obligation. It also gives useful service back to the community in exchange for welfare aid, and it can make the welfare recipient more employable by instilling crucial job skills relating to appearance, timeliness, and responsibility. Workfare got a jump start with the passage of the federal Family Support Act in 1988. This bill aimed to produce economic self-sufficiency by providing education, job training, child care, and health insurance (ie Medicaid) to federal AFDC (Aid to Families with Dependent Children) recipients who got jobs. In the past few years, many states have added their own workfare programs. Work experience and job search training are only one part of many states' welfare work programs, which have steadily increased in number during the past five years. Putting Welfare Recipients to Work While this academic debate has continued, America's legislators have been conducting practical experiments. Several states have introduced schemes that try, with varying degrees of insistence, to get poor people to accept training or to look for jobs in exchange for their welfare payments. ...Finding ways to bring the unemployed back into the world of work is the easier part. The organization of public works projects provide employment is probably the most straightforward way in which people can be released from enforced idleness and have something sensible to do with dignity - and dignity requires that it can't be compulsory. 1 Analysis of these schemes by the Manpower Demonstration Research Corporation shows: (1) No state has made employment schemes mandatory for all claimants. Typically, half of those on welfare took part; (2) Most schemes apply to unsupported mothers. Such women are most likely to claim welfare in the years before their children start school; yet few states could bring themselves to insist that mothers with children under six go out to work; (3) The schemes raised the long-term earnings of women; (4) The best results come from concentrating on the least employable. But helping them has the highest cost per person eventually established in a job; (5) As a money-saving device, such job schemes are not much use. The costs are high and short term; the welfare savings long term. The stricter the sanctions, the higher the cost; (6) To some extent, success depends on the strength of the economy. When unemployment is high, claimants are harder to place in work than when it is low; (7) On the whole, claimants felt that the programs were fair, particularly the requirement to look for a job. The convergence of social protection and employment policies has had two main origins. Liberal scholars argue that workfare programs tend to direct the work recipients to low-skilled and low-paying jobs, which do not prepare them to enter the mainstream economy. 2 Welfare benefits are more socially acceptable if they are seen as tied to some concept of entitlement. Except for the sick and the old, that entitlement ought to take the form of a commitment to the job market. Second, education and training are the best ways to help people into work. Simply telling people to work is not enough. The state will need to help: either by providing training or by guaranteeing jobs. In the future, welfare benefits alone are rarely going to pay any group in society enough to provide a decent standard of living. People will have to combine benefits and income from work. That may mean restructuring benefits, to foster part-time work. And it means pushing some of the poor into the job market. Pennsylvania The Pennsylvania Welfare Reform Act of 1982 was signed into law on April 8, 1982. A major change made by this act was the division of General Assistance recipients into two distinct groups: The Chronically Needy and the Transitionally Needy. The Chronically Needy are entitled to cash welfare benefits for as long as they are eligible, while those classified as Transitionally Needy, who are between the ages of eighteen and forty-five and considered able to work, are eligible for cash welfare benefits for ninety days in any twelve month period. A recent study conducted into the Pennsylvania workfare program showed: (1)Thirty-seven percent found some form of part-time or full-time employment. However, after the ninth month of being discontinued only two and a half percent were employed. (2) After Discontinuance of General Assistance, participants used a variety of methods to support themselves. These included full-time or part-time employment and several participants maintained that their present situations were worse than prior to discontinuance. (4) The long-term effects of the Welfare Reform Act of 1982 may impact negatively on the psychological and physical well-being of some of the discontinued clients, thus diminishing their employability and resulting in their continued dependence on public and/or private sources of support. New York Nearly one out of four New York City residents live below the federal poverty line, an annual income of $11,611 for a family of four. That figure does not include the value of food stamps, housing subsidies, and health care; but, it adds up to a lot of trouble. Since 1989, the Westchester County, New York Department of Social Services has run a workfare program called Pride in Work, which requires able-bodied single adults who get public assistance under New York State's Home Relief program to work twenty hours a week for their welfare checks. Most of the participants are men who work as unskilled laborers for local governmental agencies or at county-run facilities like the Kensico Dam in Valhalla, New York. Westchester's biggest achievement to date has been trimming its welfare costs by cutting the number of people on Home Relief, the state-sponsored welfare program for those who need help but do not qualify for any other federal assistance. Of the roughly two thousand five hundred men enrolled in the work program each year, only about fifty (or two percent) find permanent full-time employment. At the Parks Department, about eight hundred welfare recipients currently help clean parks as part of the citywide Work Experience Program, started in 1987. Participants work thirty-five hours every other week, and can only stay at the Parks Department for nine months. After that, they have to find employment in the private sector or in the public sector. The time restriction exists to encourage the participants to think of the program as a stepping stone, not a career. For taxpayers determined to get a return for their investment, this arrangement achieves a kind of rough economic justice: Welfare recipients are punching a time clock in the public service. But if the goal is to get people off public assistance, then the program falls short. With its present structure, the Work Experience Program offers little encouragement to participants because hard work will not earn them a promotion, a raise, or even a permanent job with the city. For the agencies involved, there is no point in training the workers, because they will be gone in nine months. There has been a great deal of controversy in the state of New York over workfare. United States republican senator Alfonse M. D'Amato had the following opinion to offer on the subject: "The July 2 editorial "Senate Cartoon" regarding my workfare amendment to H.R. 2118, the supplemental appropriations bill, not only misrepresented my position but delivered the same tired message that we should not attempt to reform the welfare system. Health and Human Services Secretary Donna Shalala has to this date failed to offer any concrete welfare-reform initiative, even in the most basic form, yet she strongly opposed my workfare amendment. The welfare system cries out for reform, and so do the American people. My amendment begins the reform process by providing welfare recipients with a way out of the cycle of dependency and a transition to becoming productive, taxpaying citizens. While requiring workfare for general assistance programs, my legislation takes money from bureaucrats, not children, as The Post's editorial states. We need to require those states without workfare programs to implement them. States that fail to initiate workfare programs will face a 50 percent cut in their quarterly administrative costs for Aid to Families with Dependent Children. This legislation would not only expand workfare, it would curb skyrocketing administrative costs for federal programs. The federal government paid $2.6 billion in AFDC administrative costs in fiscal year 1992, an average of $566 per AFDC family. In 1992 New York state received $459 million from the federal government for administrative costs. This means that $1,156 for each AFDC family went to cover the costs of the bureaucracy. This amount equals nearly two months of direct benefits for an AFDC family, with the average payment of $614 per month. Beyond this, there is evidence that the administration has abandoned welfare reform. Through the reconciliation bill, the administration proposed and was granted a delay in the effective date by which there was to have been an increase in the participation level in job training required for able-bodied married recipients of AFDC. This delays a requirement that at least one parent in 40 percent of all AFDC two-parent families on AFDC, and more than 128,000 of those will not be required to enter into a job-training program. I do not understand why the administration will not permit 128,000 families to leave the cycle of welfare dependency. We need a new national policy to provide America's welfare recipients a way to break the unending cycle of dependency and to make their way off the welfare rolls. We need to expand workfare, not welfare. Able-bodied welfare recipients of both state and federal programs have a responsibility to participate in workfare, and states have the obligation to do so. Through workfare programs, recipients can begin to enter the mainstream and become self-sufficient. 3 Under the leadership of Senator D'Amato and other conservatives, New York seems to be leading the way in welfare reform. Their programs have been the most innovative and successful so far. Florida Failure to contact sixteen potential employers in two weeks could mean you will lose your benefits. 4 Florida is not waiting for President Clinton and Congress to decide how to end welfare as it is now known. The difficult process of nudging people off the welfare rolls is under way throughout the state every day. Welfare clients get advice from the state on where and how to find a job, how to present themselves at interviews, what to wear, and what to say. They also get fifteen dollars a week for gasoline or bus fare to help them look, counseling to prop up their self-esteem, limited forms of job training, and once they get a job, child care. This welfare reform that Florida has enacted will get people off welfare in two ways. Some will get off welfare because they will get the training necessary to qualify for a good job. Others will get off welfare because they will receive child care which will help them find a job and keep it. The ones that do not complete the job training will get kicked off welfare after two years. Although most only stay on welfare for a couple of years, the current rules allow someone to keep getting a check for years, even if the recipient does not try very hard to support himself. The plan applies to one of the main welfare programs, Aid to Families with Dependent Children, which is primarily for single parents. In one Florida pilot program, Project Independence, parents on AFDC will be assigned randomly to the new system. They will be given job training and receive child care and medical coverage. The parents will not get thrown off welfare as soon as they accumulate $1000 in assets, which happens now. Instead, they will be able to accumulate up to $5,000 and have up to $8,050 equity in a car, so they get themselves on their feet before leaving welfare. After two years, they will be taken off AFDC and won't be able to reapply for three years. The children of parents who get kicked off AFDC can still get AFDC money, but someone other then the parent who failed to complete the job training is in charge of the money. South Carolina Governor Carroll Campbell and other officials in the state of South Carolina have proposed a plan to help get welfare recipients back into the working world by training them as computer technicians. This pilot program is part of the Department of Social Services' attempt to give welfare recipients training and employment alternatives. State officials have obtained the rights to use a new program called Computer Repair-Industrial Services to teach welfare recipients much needed skills in computer hardware, personal computer repair and maintenance. This particular program also teaches the basics of MS-DOS (an operating program) and WordPerfect (a software word processing program). These are two of the main programs used in many business settings. Of the twenty-five participants selected for the program, sixty-four percent have already found suitable employment. The Department of Social Services is expected to hire another twenty percent and to assist the remaining students in finding employment. Pretty good for a class where most of the students had never used a computer. Reality Based Welfare System A continuing controversy in social welfare reform, concerns the appropriate role of government in the provision of social welfare services. At one extreme is the position that the state could use administrative mechanisms to deliver services directly through a centralized, regulation-oriented social welfare system. The position at the other extreme is that market mechanisms should be utilized to offer services through a decentralized, economic incentive oriented social welfare market. One of the most widely endorsed market mechanisms is a voucher system. In theory, vouchers increase economic competition and replace unresponsive and inefficient social welfare monopolies with markets that are more responsive to consumer demands, provide alternative choices to consumers and in general offer the most quality service at the most reasonable price. The most common example of a voucher system in welfare is food stamps. A welfare recipient receives a certain amount of tickets they can redeem at any participating retailer. The theory is that it increases their freedom of choice and it increases competition among vendors. A side of recent interest ... the state of Alabama decided to replace its food stamps with a cash payment. This was supposed to increase the self-esteem of recipients. They instead supplied their welfare recipients with ready cash for drugs, alcohol, and tobacco. In some cases, vouchers are better. As the call for welfare reform increases in intensity in the legislative halls of Washington D.C., there also appears to be a growing gulf between the "perception versus reality" situation regarding welfare recipients. While reducing welfare rolls can cut state costs, workfare programs are often not cost-effective in the long run or useful in promoting genuine and lasting self-sufficiency. Workfare also poses dangers to a person's right to self-determination because it channels workers into low-paying jobs that offer little opportunity for advancement and that do not enable them to escape poverty. 5 Because of the ailing economy, states are spending millions on job training in areas where there are few jobs; and those available jobs pay so poorly the family is still not self-sufficient. Plus, the promised child care for working mothers is often non-existent or of very poor quality. Some groups opposed to workfare programs as they currently exist are finding new ways to get women decent jobs. Arguments for and against workfare may involve not so much a trade-off between welfare savings and fairness as questions about values attached to the AFDC program. Even if workfare costs more up front, it represents a sounder design for AFDC because it fits with the nation's values and will then improve the image of welfare among recipients and the public. Others will contend that what are needed are not requirements but jobs and investments and training. 6 The key to successful programs seems to be a combination of plenty of recipient input in program design, education and peer support, and government support that brings about self-sufficiency. There has been a successful Portland, Oregon, project that works in the school system with teen parents, offering them a full battery of child care, education, job training, and counseling. The Clinton Promise There is no economically and politically practical way to replace welfare with work at a time when the labor market is saturated with people looking for jobs. Unemployment averaged 4.5 percent in the 1950s, 4.7 percent in the 1980's, and job prospects look no better in the 1990s. 7 During his presidential campaign, Bill Clinton pledged "the end of welfare as we know it". He promised to provide people with the education, training, job placement assistance and child care they need for two years - so that they can break the cycle of dependency. After two years, those who can work will be required to go to work, either in the private sector or in meaningful community service jobs. His aides, however, have drafted a plan that initially exempts two-thirds of all parents on welfare from any time limits or work requirements, covering only those born after 1972. And it takes years before significant numbers of welfare recipients are pushed into a private job or a subsidized work program. At the end of the plan's first five years, just two hundred thousand of the estimated 1.67 million young families who will be covered by the new welfare system will either leave the rolls because of various reforms in day care, welfare and health care, or have a parent working in a subsidized job. The administration argues that it is smarter, in an era of scare resources, to move carefully and target its reforms on the youngest mothers with the highest risk of long-term welfare dependency and the greatest potential for turning their lives around. Because of added costs for education and job training, child care (while the mothers work), and administration (to establish and monitor placements), is much more expensive than the current system, at least in the short run. Clinton staffers estimate that monitoring each job would cost over two thousand dollars annually: child care for the children of each mother mandated to work would add another thirteen hundred dollars. That is thirty-four hundred dollars for overhead costs about the same as the average Aid to Families With Dependent Children grant to families. A work requirement is one of the best ways to reduce the attraction of welfare for young people with poor earnings prospects. If young people know that the welfare agency is serious about mandating work, they will be less likely to view long-term AFDC-recipiency as a possible life option. Mandated community service may be the only way to build the job skills and work habits of those who cannot support themselves in the regular job market. Inactivity is bad for everyone; it can be devastating for those loosely connected to the labor market. Child abuse, drug abuse and a whole host of social problems are associated with long-term welfare dependency. A work requirement will help to reduce their levels. Components of A Successful Workfare Program At present we have few models of successful work requirement programs but the available evidence suggests that successful programs would have the following components. (1) The requirement to work or participate in other activities should be permanent, not temporary, and should last as long as the recipient receives welfare. (2) The requirement to work or participate in other activities should be continuous, not intermittent. There should be no intervals of inactivity as recipients are shuttled between different sub-components of the program. (3) The emphasis should be on mandatory community service work; job search and training should be de-emphasized. (4) Recipients should be required to work or perform other activities for a minimum of thirty hours per week. (5) Welfare benefits should be contingent on and paid only after the fully successful completion of relevant performance requirements. (6) The ethos of the welfare office is very important; caseworkers must sincerely and persistently inform recipients that they have a moral obligation to themselves and the community to get a private sector job or, if jobs are not available, to perform community service work. (7) Opposition to workfare by public sector unions currently results in prohibitions on welfare recipients undertaking much public sector work which they are capable of performing; such prohibitions must be lifted. Blueprint for the Future It is of no small significance that welfare reform is suddenly returning to the forefront of the American consciousness. Four basic principles suggest a template for rebuilding an effective assault on the welfare beast: (1) Work from the bottom up. There is no splashy grand solution, but programs that bubble up from the community fare better than those mandated from the top down. They are most effective when they can be flexible in meeting local needs. (2) Spend money carefully, but spend it. Though federal dollars aren't a solution in themselves, they are absolutely essential to any reasonable blueprint for progress. Existing resources can be more effectively marshaled than they are, but we shouldn't expect a cure on the cheap. (3) Start early. It costs less, and is more effective, to get children on the right track than to change adults. (4) And early interventions are vital to perhaps the most important element in breaking the welfare dependence cycle: instilling old-fashioned values. Conclusion With increasing interest rates, decreasing stability in the economy, persons need to be able to rely more on themselves and less on government handouts. Workfare is a feasible solution to teaching people how to become independent. Like any other program, it will need fine tuning to be suitable to meet everyone's needs. As each state ventures into their own brand of welfare reform, the nation will be learning what works best. Hopefully, this will lead to the ultimate goal of a unified, nationwide program. Percent of Adult AFDC Recipients Participating in Mandatory Job Search, Community Service Work, or Training, FY 1992 Alabama 7.2 Montana 15.1 Alaska 3.8 Nebraska 31.5 Arizona 2.8 Nevada 4.0 Arkansas 9.6 New Hampshire 9.8 California* 4.8 New Jersey 8.3 Colorado 11.1 New Mexico 7.6 Connecticut 14.6 New York 6.8 Delaware 8.0 North Carolina 5.1 District of Columbia 6.0 North Dakota 13.0 Florida 3.8 Ohio 9.6 Georgia 4.7 Oklahoma 24.6 Hawaii 0.7 Oregon 10.4 Idaho 8.4 Pennsylvania 5.9 Illinois 6.6 Rhode Island 10.9 Indiana* 1.2 South Carolina 5.4 Iowa 3.8 South Dakota 8.6 Kansas 9.2 Tennessee 4.2 Kentucky 5.1 Texas 5.2 Louisiana 4.0 Utah 30.0 Maine 5.2 Vermont 7.4 Maryland 4.6 Virginia 6.7 Massachusetts 16.5 Washington 11.2 Michigan* 6.9 West Virginia 6.9 Minnesota 5.1 Wisconsin 18.1 Mississippi 2.5 Wyoming 11.7 Missouri 3.8 Nationwide Average 6.9 *Data represent participants as percentage of full AFDC caseload for 1991 in states marked with an asterisk. Source: Office of Family Assistance, Department of Health and Human Services Table 1 STEPS TOWARD WELFARE REFORM

 



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