By Andrew Stettner,

Georgetown University Graduate Public Policy Institute/Community Voices Heard

Made possible by the

The French American Charitable Trust

The New York Foundation

The North Star Foundation

Community Voices Heard

173 E. 116th Street, New York, NY 10029

tel: 212-860-6001 fax: 212-996-9481

WELFARE TO WORK: IS IT WORKING?
The Failure of Current Welfare-To-Work Strategies

To Move The Hardest To Employ Into Jobs

A CASE FOR PUBLIC JOB CREATION

Executive Summary

Description: In May of 1997, Community Voices Heard, a membership organization of people on welfare, developed a proactive program proposal – the Community Voices Heard Community Jobs Program – as our response to work requirements set forth by federal and state welfare reform. CVH’s proposal, developed by our members and based on similar program proposals in Pennsylvania, Vermont and Milwaukee, became the model for New York City and New York State legislation. This legislation seeks to create temporary wage-paying jobs for people on welfare, combined with comprehensive education and training programs. This two-pronged approach provides the work experience and skills necessary to compete in the labor market.

CVH developed the “jobs survey” to make a case for why a publicly funded temporary jobs program is needed to move people into work. In the summer of 1998, CVH surveyed 483 people on welfare at workfare worksites, welfare centers and social service agencies in Northern Manhattan and across the city. The survey includes questions about the Work Experience Program (WEP), job training, barriers to employment, and past work experience. In December 1998, we interviewed 72 of the original participants to measure the impact of welfare-to-work programs on their lives.

New York City has just begun to spend its $88 million dollar welfare-to-work block grant from the U.S. Department of Labor on 21,000 current welfare participants who have been exempted from workfare in the past. The city is planning to put over 60% of these individuals into the city's Work Experience Program. This report concludes that expanding the Work Experience Program will adversely affect people currently on welfare.

Contrary to common misconceptions that welfare participants do not make an effort to improve their economic situation, the report finds that people on welfare want to work, are actively looking for work with little help from the government, but have yet to find jobs. Our report shows how the Work Experience Program is failing to move people currently on welfare into jobs and is failing to develop marketable skills and education. In addition, WEP participants have little or no chance at getting a permanent city job – we have found that the city has used WEP to eliminate well-paid union jobs that were once available to low-skilled workers. We find that most people on welfare have multiple obstacles to employment, such as a lack of education, lack of recent work experience and large families. Expanding a workfare program that provides poor quality work experience and little education and training will not help participants overcome barriers to employment nor help them find permanent work.

FINDINGS

I. WORKFARE FAILS TO ADEQUATELY SERVE PEOPLE CURRENTLY ON WELFARE.

Workfare Is Not Helping People Move Into Jobs or Increase their Skills and Experience:

  • Most workfare participants (60%) report that workfare is not helping them get a job and is not helping them to build their work experience and skills.
  • From a six-month follow-up survey, we found that only 6% of workfare participants from our original survey had found jobs.
  • While less than 10% got jobs, 23% of people in WEP had their benefits reduced or cut off (sanctioned). This confirms that WEP is most effective as a tool for punishing people and removing them from the welfare rolls, and is not effective at helping them move into employment.
  • The longer participants are in the Work Experience Program, the worse off they are. Even after six months in the program, 67% of workfare participants think they will not get a regular job in a city agency. There is no advancement in WEP.
  • The Survey results support the idea that WEP workers are displacing union workers. 89% of WEP workers report doing the same work as regular city workers. WEP workers – not unions workers – are filling union positions eliminated under the Giuliani administration.
  • Workfare Workers are less likely to receive job placement assistance than other welfare participants are. Only 50% of workfare participants get help looking for jobs from welfare caseworkers, job placement programs or the employment service, while people on welfare not in the work experience program are 20% more likely to receive such job placement assistance.

II. PEOPLE ON WELFARE WANT TO WORK AND ARE LOOKING FOR WORK WITHOUT HELP FROM THE CITY.

  • People currently on welfare want to work and are actively looking for work. 90% of unemployed survey respondents said they want to work, and 70% reported looking for work. Their failure to find work cannot be blamed on a lack of effort.
  • The City is not helping people on welfare look for work. While the city is now pushing welfare participants into the labor market, only half of welfare recipients looking for work are getting any help from the city. People on welfare are more likely to look for work on their own (75% use newspapers, their friends or temporary placement agencies) than they are to get job search assistance through welfare caseworkers, the employment service, or other job placement programs (50%).

III. PEOPLE ON WELFARE MUST OVERCOME ECONOMIC AND PERSONAL OBSTACLES IN ORDER TO MOVE FROM WELFARE TO WORK.

People currently on welfare face multiple obstacles to employment. In September,the Human Resources Administration (1998) released a study describing a small number of individuals who have gotten off of welfare and successfully transitioned to work. The HRA study showed that the city has only been able to move the most educated and job-ready individuals into work. Our survey finds that those still on welfare are much more disadvantaged.

  • Only 42% of the welfare participants in the CVH survey have a high school degree or its equivalent, compared to 72% of those in the HRA study.
  • Most current welfare participants in the CVH survey have three or more major obstacles to employment: 71% have been on welfare for two years or more; 66% have not worked in the last two years; and 60% have more than two children.
  • Welfare recipients state that their lack of experience and skills is the most challenging and significant obstacle to employment. They are more likely to identify these problems as important than inadequate access to childcare, language barriers or health problems.

IV. WELFARE PARTICIPANTS FACE A LABOR MARKET WHERE THERE ARE MANY MORE JOB SEEKERS THAN THERE ARE AVAILABLE JOBS.

Welfare participants being forced off of welfare will have a hard time finding work, especially in poor communities. Despite claims of economic recovery and an expanding jobs market, welfare recipients are struggling – and will continue to struggle – to find entry-level jobs to support themselves and their families.

  • Despite the national recovery, New York City's unemployment rate remains 50% above the national average. In particular, there is a shortage of jobs available for low-skill workers. A recent survey conducted by the U.S. Conference of Mayors found that New York City has the largest welfare-related job shortage of 125 cities in the country. Our analysis shows that there will be approximately six workers for every new job created over the five-year time limit imposed by federal welfare reform.
  • Welfare recipients face a labor market that provides very low wages and little job security to low-skill workers. Of the welfare participants we surveyed that had previous work experience, most have worked in jobs that do not pay a salary large enough to support a family. In past jobs, welfare recipients only earned an average of $5.85 per hour – $772 per month. This amount is less than the federal poverty level of $1066 per month for a family of three. The most common reason for losing a job was being laid off.
  • Community Voices Heard found that 71%, or more than two-thirds of the unemployed welfare participants surveyed, stated that there is a shortage of jobs in their communities. The experiences of welfare participants looking for jobs confirm labor market data for New York City – there is a shortage of entry-level, low-skill jobs available for people moving off of welfare. Many people surveyed reported going on numerous interviews and not getting hired.

Recommendation: Enact Community Job Creation

WHAT IS COMMUNITY JOB CREATION AND HOW IS IT DIFFERENT FROM WORKFARE?

Community Voices Heard developed its job creation program as a policy alternative to workfare. Job creation programs use public funds to create jobs for people who are unable to find work in the private sector. In job creation programs, workers complete necessary public works in the public and private nonprofit sectors. The most well known historical examples are the Work Progress Administration of the 1930s and the Comprehensive Employment and Training Act Public Service Employment Program of the 1970s. Both programs hired hundreds of thousands of workers in times of economic downturns and made lasting improvements to communities, while providing the dignity of work to unemployed individuals.

Welfare reform has spawned a rebirth of job creation programs. Philadelphia is launching a program to hire 3,000 welfare participants with cash wages over the next two years and Detroit, San Francisco, Vermont, Washington State and Baltimore are also starting programs. Newer programs use community service employment as a temporary on-the-job training experience that help individuals develop the skills and experience they need to find unsubsidized jobs.

While both workfare and community jobs programs provide work for welfare participants,there are fundamental differences between the two approaches:

  1. Workfare participants receive their regular welfare benefits in exchange for work, while community jobs workers receive cash wages like regular workers. As a result, community jobs workers qualify for the federal and state Earned Income Tax Credit, up to $3,000 dollars a year.

2. Like a regular job, community jobs workers would choose where they want to work. Unlike workfare, community jobs participants are matched to jobs that they believe will help them reach their long-term career goals. Unlike workfare, community jobs programs allow workers to get skills training to increase their employability.

  1. Workfare participants are not granted the full rights or treated with the full measure of respect accorded to regular workers. WEP workers are relegated to a lower tier of workers that don’t have the right to join a union, file grievances or get worker’s compensation.
  1. As bona fide workers, people in a community job develop on-the-job experience and occupational skills that help them compete in the private labor market. Research supports the fact that community jobs programs are more effective than workfare. The Manpower Research Demonstration Corporation found that unpaid work experience programs were not effective at moving people into unsubsidized employment (MDRC, 1993). In contrast, an evaluation of the AFDC Home Care Demonstration found that subsidized jobs in home care increased the earnings of welfare participants by as much as $2,600 per year, as compared to a matched comparison group (Center for Budget and Policy Priorities, 1997). In general, research shows that programs that combine work experience with education and training are the most effective at providing lasting employment and earnings gains.

There are legislative efforts underway in the City Council (Bill 354 with 30 sponsors) and the State Legislature which would commit New York City to launching a community jobs program. These programs would employ 10,000 people over 5 years; provide valuable work in the public and non-profit sector; pay a decent wage of $7.50 an hour; assure health and child care benefits; assure one day of education and training per week; and protect permanent employees from displacement by mandating that community jobs workers be engaged in new work projects and by ensuring that community jobs workers have the same rights and responsibilities as regular workers.

WHY IS A COMMUNITY SERVICE JOBS PROGRAM NECESSARY?

CVH and over 100 organizations throughout the city and state are supporting community job creation because there are not enough jobs being created to accommodate welfare participants moving off of welfare; welfare participants do not have the skills and experience to compete for those jobs; and current welfare-to-work programs do not address the special needs of hard-to-employ welfare recipients. The evidence from our survey supports all three of these contentions.

  • There are not enough low-skill job opportunities available for all of the new job seekers pushed into the labor market by welfare reform. According to the Independent Budget Office, New York City hopes to move over 200,000 welfare participants off of the welfare rolls.[1] In addition, there are over 100,000 low-skilled unemployed individuals in New York City.[2] Our analysis of New York State Department of Labor data indicates that there will only be 98,400 new low-skill jobs available for these new job seekers over the next five years.[3] These numbers add up to a shortage of at least 200,000 jobs.
  • Welfare participants face a multitude of difficult obstacles to employment. As we demonstrated above, a vast majority of people on welfare want to work (90%), are looking for work (75%), but are not finding jobs. Their struggle to find work is directly related to the number and nature of the obstacles they face. A majority of welfare participants face three or more of the following barriers to work: low levels of education, large families, little work experience and long-term histories on welfare. Now that the most advantaged welfare recipients have moved into work, New York City needs new strategies to address the barriers faced by hard-to-employ individuals. Welfare recipients assert that a lack of training and skills is the most important barrier to employment: a community job can teach both specific vocational skills taught on the job or in the classroom and basic “soft” work skills such as the ability to work effectively with customers and co-workers.
  • Workfare is not working: Most workfare participants do not think WEP will either help them get a job or increase their level of skills or education. As New York City seeks to move these hard-to-employ individuals into work, it will need strategies other than WEP to make welfare participants more employable. After reading two paragraphs describing both New York City’s current workfare program and the job creation legislation in the City Council, a vast majority of respondents to the CVH survey (95%) preferred the job creation legislation.

Community Jobs can address the disadvantages of welfare participants and help them find private sector employment by:

  • EXPANDING THE NUMBER OF AVAILABLE JOBS. 40% of the welfare participants we interviewed have not worked in the last two years and 20% have never worked. A community job would allow people on welfare who are unable to find jobs in the regular labor market get recent work experience.
  • PREPARING PEOPLE ON WELFARE FOR UNSUBSIDIZED JOBS: With recent experience, welfare participants would have a much better chance of convincing employers that they can be productive workers. Such a program could also address the large skill deficits that we identified in the survey – 58% of welfare participants do not have high school degrees and they believe that their lack of training is the main reason they have not found jobs. By combining work with on-the-job and classroom skills training, a community jobs program could make welfare participants more competitive in the labor market.

Both city council bill 354, “The Transitional Employment Program,” and draft state legislation, “The Empire State Jobs Program,” present viable alternatives to workfare for welfare participants that face multiple barriers to employment. Such a two-pronged program would provide marketable work experience and allow people on welfare to pursue education and training opportunities. Together, work experience and skills development will greatly increase the probability of finding work.