WAGE-PAYING COMMUNITY JOBS LEAD TO PRIVATE EMPLOYMENT
Wage-paying community jobs are not "make work." Community jobs give welfare recipients the chance to acquire job related skills and experience they need to move into the regular labor market while helping to address pressing public needs. It’s a "win-win" combination that New York should not and cannot ignore. Research shows that paid subsidized transitional jobs integrated with education and training lead to future private sector employment of workers while engaging them in useful work.
1. National Demonstrations that have created closely-supervised jobs (with on-the-job training) for welfare recipients succeeded in raising participants’ earnings through private employment
. A rigorous evaluation of one such program, the AFDC Homemaker-Home Health Aid Demonstrations found that:Participants’ earnings from private employment increased by one and one-half to two times more than a matched comparison group not in the program;
Rates of unsubsidized employment in the private sector increased by at least one-third and as much as 85% in most of the states studied and;
There was also a net "social benefit" from $2,000 to $13,000 per participant from the increased work earnings of the participants and the value of the services provided by the program.
2.
Other Demonstration Programs have had similar positive results with most hard-to-employ participants finding unsubsidized jobs.For example, the New Hope Project in Milwaukee gives people a subsidized job for up to a year if they can’t find work on their own and provides education and training with pay for up to ten hours a week.
An experimental evaluation of supported work increased private earnings among hard-to-employ AFDC recipients by 50% over experimental control groups and found that AFDC recipients benefited from job creation more than other groups.
3. Evidence Shows that Welfare Recipients greatly benefit from the combination of training and work experience.
The New York State Department of Social Services reports that 67% of AFDC recipients in on-the-job training found jobs in FY1995, compared to 8% of those in work experience alone and 8% of those in educational training alone.
The Jobs Gap in New York State
Much of the reductions of the welfare caseload across the country have occurred in areas where unemployment is reaching historic lows, and where employers are reporting labor shortages. Welfare reform will be much more difficult in areas like New York State with larger welfare caseloads and fewer job opportunities. In such difficult economic conditions, meeting the federal requirements and work goals of welfare reform will be very difficult without a community service employment program. Some facts about welfare reform and jobs justify a jobs program in New York State.
New York State has the worst welfare jobs gap of the forty-eight continental states: For every new low-skill job created in the economy, there are eight welfare recipients that New York State wants to get off of welfare. An economic consulting group found that New York State only expects to create a total 17,900 new net low-skill jobs, while trying to get 133,200 adult welfare recipients off of the welfare roles by the end of this year. The net job creation only covers a paltry 13% of the welfare recipients expected to come off of the welfare roles by the end of this year. Welfare recipients have a better chance at finding work in every other state except Alaska and Hawaii. In contrasts, in New Jersey the ratio between jobs and welfare recipients in 46%, in Massachusetts it is 49%, in Vermont it is 43%, in Pennsylvania it is 33%.
Clearly, New York welfare recipients slated to move off of the roles face much worse odds of finding jobs than their counterparts in other states. Given these comparisons, there is a strong case for community service jobs creation in New York State.
Source: Cochrane, S. et al. (May, 1997). "The Economic Impact of Welfare Reform." Regional Financial Review.
The Jobs Gap Continued
New York State’s welfare caseload is not shrinking as fast as other states.
Across the country, the welfare caseload has dropped by 41% from 1993 to 1998 due to better economic conditions and welfare reform efforts. In New York State, the caseload has dropped by only 25% over the same five-year period, the eighth slowest reduction in the country. Moving off of welfare isn’t so easy in New York State (Source: U.S. Department of Health and Human Services).New York City is ground zero for welfare reform.
Approximately, two out of three welfare recipients in New York State live within New York City. According to the U.S. Conference of Mayors (1998), New York City has a shortage of 185,000 jobs, the largest of any of the 125 major metropolitan areas in the county. For example, in Los Angeles there are only 2 welfare recipients for every new net low skill job being created compared to 7 welfare recipients for every job being created in New York City.It’s not any better in Buffalo.
Next to New York City, the Buffalo metropolitan area has the highest 1998 unemployment rate (7.1%) of all American major metropolitan areas surveyed by the Bureau of Labor Statistics. The economic recovery just hasn’t helped major New York metro areas keep pace with the rest of the country. (Source: Employment and Training Reporter, September 9, 1998)
Women with low-skills need a jobs program.
About half of welfare recipients don’t have a high school degree which means that many won’t find jobs in the labor market in New York State. Unemployment rates for women without high school degrees are twice as high as the rates for all women of the same race.Source: "Low Wage Labor Market Indicators: Prospects for Welfare Reform," Economic Policy Institute
How the Empire State Jobs program will help participants
FIND JOBS
1. Work Experience not Workfare:
A first step to success!Workfare does not provide marketable experience to welfare recipients. Two surveys of hundreds of workfare participants in New York City found that most do not think that workfare will help them find a job; many workfare participants report that they will not put workfare on their resume: it is not acceptable experience.
These surveys found that people on welfare need experience: 75% had worked at some point in their life, but only 33% had a job within the last two years. Without recent experience, employers are not likely to even consider welfare recipients for job openings. A temporary job can be the first rung in a ladder to success.
Education/Job Training:
Higher skills lead to higher wages!Research has shown that a combination of education and work experience leads to the larger long-term earnings than either experience or training alone. Education and training can help welfare recipients overcome specific barriers such as the lack of a GED, English as a second language and basic reading or math skills that are a barrier to both employment and advancement.
Many hard to employ welfare recipients and other low-income workers have low levels of education with about half having less than a high school education. They need increased skills in order to compete in the labor market.
Job Search Assistance:
"I need a job!"Well-performing workers will have a chance at permanent employment in their sponsoring agency.
More importantly, participants will be allowed two months for job search at the end of their 18 months in the program. A well run job search assistance program that invests time into developing relationships with employers will help community service workers move into permanent employment when they finish their assignment.
Everybody’s Doing It: Why Not New York?
The federal welfare law enacted in August 1996, combined with the 3-billion dollar "Welfare to Work" (WtW) program signed into law a year later, have fueled initiatives across the country to create transitional wage-paying jobs for welfare recipients. These programs most often provide employment in the public and non-profit sector in order to also target and address local community needs. These programs use Welfare to Work Block Grant funds, Temporary Assistance for Needy Families (TANF), Job Training Partnership Act (JTPA), private foundation and other available funding sources.
Philadelphia: Conservative Republican Governor Tom Ridge and the Democratic Mayor of Philadelphia Ed Rendell have agreed to use TANF funds for job creation due to the severe jobs gap in Philadelphia. The city and state have begun to use welfare to work funds to create community service jobs for 3,000 welfare recipients over two years. Participants who find work before six months will receive paid bonuses of up to $650 when the participant secures an unsubsidized job.
Washington State: The Community Jobs Initiative is part of the state’s "Workfirst " program that provides subsidized jobs for those who cannot otherwise find employment. Five pilot projects in communities throughout the state will create half-time jobs for up to nine months; already 100 workers have bee hired. In Seattle, the city is supporting a "Preparatory Employment" program that places hard-to-employ residents in closely supervised jobs paying $8.00 per hour. The program emphasizes strong ties to worksite supervisors and skills development for participants.
Vermont: New York’s neighbor has been running its Community Service Employment program for long-term welfare recipients who reach the state’s two year welfare time limit. Since 1995, Vermont has placed 215 participants in public and non-profit wage-paying jobs across the state. The positions are for 10 months, with a possible reassignment if job search is unsuccessful.
Detroit: Detroit’s Welfare to Work program will create 2,000 wage-paying jobs for TANF participants to be placed in public agencies for 6 months of full-time work and in private for-profit employment with employers who agree to hire suitable participants after the subsidy ends. Detroit has already hired a contractor to operate the program and is set to enroll participants.
Baltimore and San Francisco:
Both of these cities, along with many others, are developing plans to create community service jobs that will give welfare recipients needed work experience while increasing their incomes. San Francisco has issued a RFP for a 200 person pilot program starting this November, 1998.Sources: National Employment Law Project and the Center on Budget and Policy Priorities, prepared by the National Employment Law Project and Community Voices Heard
New York State’s Successful Tradition of Job Creation
New York State has a long history of innovative programs to meet the challenge of ensuring that every person able to work has the opportunity to do so.
TERA: Leading the Way for the New Deal in the early 1930's
In 1931, Governor Franklin Delano Roosevelt called the Legislature into special session to create a system whereby persons "incapable of supporting either themselves or their families because of circumstances beyond their control which make it impossible for them to find remunerative labor" would employed at "useful public work."† The resulting Temporary Emergency Relief Administration (TERA) operated for four years before being superseded by the Works Progress Administration (WPA).
TERA implemented "work relief" according to three bedrock principles: 1) Only work clearly beneficial to the public would be authorized, 2) Projects would be in addition to, not in replacement of, the customary activities of local governments, and 3) Participants would be treated as employees, paid in wages based on the prevailing rate for the work being done.
Locally administered TERA projects not only paid out nearly $300,000,000 in wages but provided enormous benefits to New York. In its last year of operation alone, more than 250,000 TERA workers made over 1,000,000 home health visits, immunized 100,000 children, bound 650,000 library books, tested 500,000 children’s hearing, taught adult education classes to 125,000 New Yorkers, and planted over 1,000,000 trees, vines, and shrubs across the State.
Work Relief Employment Program: Innovative Welfare-to-Work Strategies in the 1970's
Frustrated with a workfare program that Human Resource Administration officials concluded "took away the dignity of working and did little to prepare people for the competitive world of work,"‡ New York City initiated the Work Relief Employment Project (WREP) in 1973.
Under the state-approved program, city agencies hired nearly 20,000 welfare recipients for part-time jobs. Like other workers, participants received benefits, paid taxes, could join a union, lost pay for missed work, and got a paycheck. Supplemental training was also available.
"WREPers" worked as office assistants, janitorial workers, hospital and school health aides, security guards, and food service and utility workers. Official evaluations found that they performed work at or above the quality and quantity of other city employees.
WREPers’ jobs were limited to 18 months, but only a quarter needed to stay that long. Of those who did hit their time limits, just half were forced to return to public assistance. Thus, over 85% of WREPers were able to leave public assistance or subsidized WREP employment. These figures are all the more impressive considering the dismal economy of the mid-70's.
Sources:
†
Alexander Radomski, Work Relief in New York State, 1931-35 (New York: King’s Crown Press, 1947)‡
Michael T. Kaufman, "City Implements Work-Relief Plan," New York Times, July 7, 1973, p.1See generally TERA, Five Million People, One Billion Dollars (1937); Charlayne Hunter, "Work Relief Employment Project Ends as a Casualty of City’s Fiscal Crisis," New York Times, April 24, 1976, p. 31; NYS Comptroller, Operating Practices: Work Relief Employment Project (1977)
Prepared by Maurice Emsellem and Noah Zatz, National Employment Law Project
The Public Speaks: Work Opportunities are the
Flip-Side of Work Requirements
A strong consensus exists that anyone receiving public assistance should work if able to do so. But being committed to the central value of work also means reaching out to people who need training, education, and child-care and creating jobs where necessary, not shielding our eyes from the realities of the low-wage labor market.
Support for Requiring Work . . .
An overwhelming 93% of registered voters support mandatory work requirements.†
. . . But Only if Jobs Are Available
Only 16% of registered voters support cutting off welfare benefits to someone who cannot find a job.*
Americans believe that work is the key to economic well-being and personal dignity. Those values can only be preserved if workers are protected against abuses and if work is rewarded with wages adequate to support a family.
What Kind of Work? Jobs With Living Wages and Workers’ Rights
Only 26% of registered voters support cutting off welfare if the only job available pays wages too low for a family to live on.*
A strong majority, 67% of voters, supports giving people working as a condition of their benefits the same legal rights as other workers to minimum wages, safe workplaces, and other workplace protections.‡
While unsubsidized employment may be the ultimate goal, the government has a crucial role in giving people the tools, support, and experience they need to find and keep work in the private sector.
A Public Consensus for Programs That Make Work Possible
67% of registered voters endorse "replacing welfare with a new employment system that connects welfare recipients to private sector jobs" as opposed to "strictly enforcing time limits to move families off welfare."¥
A near unanimous 95% of voters believe that parents moving from welfare to work should be guaranteed access to child care,† 89% feel the same about health care,† and 87% support providing job training*.
For people unable to find private sector employment, an overwhelming 74*-87%† support creating public service jobs rather than cutting off their public assistance.
*
K.R.C. Communications Research, "Kaiser/Harvard Survey on Welfare Reform" (Henry J. Kaiser Family Foundation & Harvard School of Public Health, 1995)†
Geoffrey Garin, Guy Molyneux, and Linda DiVall, "Public Attitudes Toward Welfare Reform" (Peter D. Hart Research Associates and American Viewpoint, 1994)‡
Peter D. Hart Research Associates, National Employment Law Project Update (Summer/Fall 1997)¥
Stuart Campbell, "Interim Report on Polls" (Coalition on Human Needs, 1997)See also Katherine McFate, "Neglected Voices: What low-income Americans think of welfare reform," (Joint Center for Political and Economic Studies, 1997)
Prepared by Maurice Emsellem and Noah Zatz, National Employment Law Project
