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