Job Programs : States Show Way Out of Welfare Rut

Until last June, Zara Richards, 32, and her five children had spent the last 16 years in Bridgeville, Del., mired in poverty and tethered to public aid.

But after completing a mandatory, state-run program for recipients of Aid to Families with Dependent Children, Richards, who had never held a job in her life, was hired as a home nursing aide at $700 a month and turned her life around.

“It feels so good to be off welfare,” said Richards, who gets an additional $150 monthly in child support payments. “I’ve changed my whole life style. . . . I have food all the time. I don’t have to worry about when I’m gonna pay my next bill. And I don’t have to sit around and wait for a welfare check.”

Step to Nursing Career

For Diana Sanchez, 23, of Fresno, Calif., the last seven months have been “like a dream come true.” She and her 7-year-old daughter had floundered on welfare for six years, but in February, she started working after three months in a mandatory training program for AFDC recipients. The big payoff comes next month, when she will enroll, with state welfare assistance, in an 18-month course to be trained as a licensed vocational nurse.

In Chicago, Cornelius Mitchell, 38, and her two sons struggled on AFDC for four years after she was laid off from her job at a bank. A year and a half ago, after she completed Illinois’ mandatory training program for welfare recipients, Marshall Field’s department store hired her as a sales clerk at $4.25 an hour plus commission. A few months later, after a good sales period, she received a two-week paycheck for $1,100--nearly three times the amount of the AFDC grant she had been receiving.

“I almost had a fit when I got that check,” she said. “I love it. I love it. The program has opened doors to things that I just couldn’t have gotten without it.”

‘Welfare-to-Work’

Across the nation, thousands of long-term public aid recipients such as Richards and Sanchez and Mitchell are now moving off the welfare rolls and into jobs because their states have initiated so-called “welfare-to-work” programs.

With varying degrees of support and financial commitment, states from Maine to California have embraced the welfare-to-work approach. It means supplementing aid programs with job placement systems, mandatory training and provisions for child care in the hope of saving money eventually by reducing the welfare rolls.

More than half of the states now have some kind of welfare-to-work program, many with uplifting names like Project Chance in Illinois, First Step in Delaware and GAIN in California.

And a consensus has begun to emerge among the usually opposing factions in the welfare debate, that, while such programs are not a panacea, they can have a significant impact on the poverty in which one of every four American children lives.

Since February, the National Governors’ Assn. has been unanimously urging the White House and Congress to revise the nation’s public aid system to include strong work provisions and support systems similar to those now run by the various states. So also has the American Public Welfare Assn., an organization of those who administer such programs on the state level.

“I’ve been in the welfare business for 20 years, so I never characterize a program as a miracle drug,” said Randy Valenti, director of Illinois’ welfare-to-work program. “But I think of all the programs that I have seen, this is the first time in my memory that both Republicans and Democrats, liberals and conservatives, welfare recipients as well as administrators and the private sector are beginning to feel that maybe this will make a difference.”

Requiring welfare recipients to work or to look for work is not new.

When Aid to Families with Dependent Children was established in 1935 under the Social Security Act, it was regarded primarily as a way to enable widows to stay home and care for their children. As the welfare-dependent population and the nation’s attitude toward women in the workplace have changed, so have the rules. In 1962, Congress began allowing the states to require aid recipients to work in exchange for their AFDC grants.

WIN Program Shrinking

In 1967, Congress established the Work Incentive program, also known as WIN, of job training and placement to help AFDC recipients become self-supporting. Many current state programs were established with the use of WIN money for demonstration projects, but those funds have steadily dwindled as President Reagan has trimmed spending on the program.

Although the welfare-to-work programs have generated enormous attention, their impact, so far, has been relatively modest.

Manpower Demonstration Research Corp., a nonprofit organization that evaluates social programs, conducted a five-year study in eight states and found that the programs increased the number of people who got off welfare by an average of just 5%.

“They are an answer to the problem of poverty, but not the answer,” Judith Guerone, president of the organization, said. “We did find savings of up to 11%, but the general lesson is that (programs result in) modest reductions in welfare.” Still, proponents cite a number of reasons welfare-to-work programs are attractive.

“That 5% might not sound like much,” said Valenti of Illinois, “but against our budget of nearly $4 billion in state and federal funds, that’s a lot of savings.”

Greater Potential Seen

Most of the state programs studied did not concentrate on the long-term welfare dependents, those who use most of the benefits and are the most difficult to place in jobs. Proponents of welfare-to-work programs say, however, that if they were expanded and focused on those at the bottom--high school dropouts, single mothers, the chronically unemployed--their impact could be greater.

A Harvard University study found that nearly half of the nation’s 3.5 million welfare families are likely to get off public aid within two years, but about 25% of those at the lower end of the economic scale tend to stay on welfare for nine years or longer and account for half the nation’s $19-billion welfare expenditure.

“That’s where you get more bang for your buck,” Guerone said. “ . . . There is the possibility that, with remedial training, more support systems and training, there could be higher savings.”

There also is a growing consensus that welfare recipients should be required to work like everybody else.

Conservatives, eyeing reduced welfare rolls and the tax savings, and liberals intrigued by the prospect of instituting national education and job-training programs for poor families, have seen their agendas begin to converge around welfare reform legislation that is winding its way through Congress.

Reform Plan in House

In the House, a bill introduced by Rep. Harold E. Ford (D-Tenn.) and cleared by three committees would require every able-bodied AFDC recipient with children age 3 or older to enroll in job search, education and training programs. The legislation also would increase the federal welfare budget by $5.1 billion over five years, provide for day care of trainees’ children and allow for extension of Medicaid benefits.

In the Senate, Daniel Patrick Moynihan (D-N.Y.) has introduced a similar proposal along with 41 senators, including seven Republicans. His bill, which would raise federal welfare expenditures by $2.3 billion over five years, also has a much-heralded provision for automatic deductions of support payments from the paychecks of men whose children are on AFDC. The Senate measure is before the subcommittee on Social Security and family.

In response to the Democratic bills, an initiative sponsored by 100 Republican congressmen was introduced last month. It would require women on welfare whose children are 6 months or older to participate in employment programs and calls for federal funds only for remedial education programs. The Republican version makes little provision for training, day care or Medicaid extensions.

Proponents of the two Democratic packages say that while their bills call for additional federal support up front, reductions in the welfare rolls would offset the costs.

“We ought to be able to do this,” Moynihan said. “If we don’t, it will be because the White House has put its back against it.”

Reagan ‘Workfare’ View

The Administration has a number of “philosophical” disagreements with the proposals, said Gary Bauer, assistant to the President for domestic policy.

President Reagan is adamantly opposed to incorporating funds for the care of aid recipients’ children into the national budget, Bauer said, and also opposes extending mandatory federal welfare benefits to households in which both parents are present.

Nor does the President agree, he said, that extensive training and education are needed. He said the Administration believes a simple work requirement as a condition for receiving benefits could probably accomplish just as much.

Aside from ideological questions, Bauer said, the White House opposes spending more on welfare because it must grapple with a $160-billion budget deficit.

“We don’t believe that the major problem with welfare is that it’s under-funded,” he said. “If states want to initiate these programs, they should pay for them. A number of these states have budget surpluses. (The federal government in) Washington does not.”

As his centerpiece of welfare reform, Reagan has long espoused his “workfare” policy, which offers no long-term training or other support, but simply requires welfare recipients to report to jobs to receive benefits. He has cited as “tremendously successful” the program he started as governor of California, which he claims moved 76,000 Californians off the welfare rolls and into paying jobs.

A study of the Reagan program conducted by the California Employment and Development Department found, however, that it was not a success. Of the 182,735 people identified for workfare, only 9,627 were placed in program jobs--such as serving as school crossing guards or picking up litter--over the three-year life of the program. In fact, the study also found that in counties that did not have workfare, a larger proportion of aid recipients got off welfare. The program was discontinued a few months after Reagan left office.

Delaware’s Gov. Michael N. Castle, a Republican who is helping to spearhead the National Governors’ Assn. efforts for welfare reform, said he held beliefs similar to the Administration’s until he took a close look at a welfare-to-work program in his state. He said he was so impressed by the benefits and the attitudes of the recipients that he decided to let the state support the program completely after it lost about one-third of its federal support.

“My own feeling was that if you trained welfare recipients, they basically would slip back to the welfare circumstances after it was all said and done,” Castle said. “It never occurred to me that it would be an uplifting enough experience for them that their attitude would be, ‘Hey, I am being offered something and I appreciate it.’ I must admit that I was surprised by that. A lot of these people are really hard-core. They really want to work but they need training and education.”

Focus on ET

One of the programs cited most often and widely emulated is Massachusetts’ ET, for Education and Training, launched by Gov. Michael S. Dukakis late in 1983, after experiments with workfare in the previous state administration and during Dukakis’ earlier term in 1974.

“Workfare just didn’t work,” Dukakis said.

Under ET, all welfare recipients with children 6 years old and older must register for the program but participation is voluntary. Participants are funneled through job-search or training and educational programs while the state defrays their child-care and transportation expenses.

So far, state officials said, the program has placed 40,000 welfare recipients in jobs and saved millions of dollars. The average length of time recipients stay on welfare has been shortened from 40 months to 26 months, and the number of people staying on welfare for five years or longer has been reduced by 25%.

Between October, 1983, and January, 1986, the state’s AFDC caseload declined by 4.1%, from 88,414 to 84,828. Without ET, state authorities estimated, the caseload would have risen to at least 93,200.

The Massachusetts Taxpayers Foundation, a conservative government-watchdog operation that is skeptical of those claims, conducted a yearlong study of the program after watching its budget escalate from $18 million in 1984 to nearly $64 million for 1988.

Scot Keefe, senior research associate, said the study found that by moving people into jobs at a faster rate, the program had saved the state $150 million over four years.

“We were surprised,” Keefe said. “It is very effective.”

Aside from the savings, Keefe said, the taxpayers’ group was impressed with the kinds of jobs the participants landed.

“They’re not yuppies by any means,” he said, “but the average ET graduate makes about $13,000 a year. That’s $4,000 greater than the average welfare grant, including food stamps. People are being trained as word processors, nurse’s aides--not the kind of jobs that people can go into from welfare without training. And without the program, they wouldn’t have that.”

Skeptics, however, note that since the program started, a booming economy in the state has cut the Massachusetts unemployment rate from 7.5% to 3%. They argue that new jobs--not ET--are behind the program’s apparent success.

Certainly a booming economy has aided in the welfare decline, Keefe said, but ET has still made a difference.

“Our study found that the ET program is 64% as effective as job creation,” he said. Without ET, he said, 7,500 job openings must be developed before 100 people will get off welfare. “With ET, you need only 4,800 (new) jobs,” he added.

In Illinois, where unemployment hovers just above the national average at 7%, state officials said their program, Project Chance, is an example of what can be done without a rapidly expanding economy. Within the last two years, 75,000 Project Chance participants have found jobs, director Valenti said, and the state expects to place an additional 65,000 workers in 1988.

As of July, Valenti said, the state’s welfare caseload had declined about 4% from a year ago, and the state’s general assistance caseload had fallen off by 11%.

Under Project Chance, able-bodied recipients of federal welfare and those receiving money from the state’s general assistance program go first into a job search operation, then, as needed, into training and education. Child care expenses are paid, and, if necessary, extended along with Medicaid benefits for six months after a recipient goes to work.

“So far, we’ve found that 70% of the people we’ve placed are still on the job,” Valenti said. “For those that have come back onto the rolls, the biggest reason is lack of medical benefits and the expense of day care.”

The programs are contracted out to various organizations that are paid according to their ability to train and place participants.

For example, in Rockford, where unemployment is 17% because of plant closings and layoffs, Opportunities Industrialization Center is training Project Chance participants for clerical, industrial and food-service positions. The Business Institute, part of the Chicago City College system, trains others in data processing and retail sales.

On Chicago’s West Side, Rapid Bus Co., which provides buses and drivers for the school system, trains and hires Project Chance participants. One agency, Chicago Commons, has established a screen and shade manufacturing business run by Project Chance participants that is to be turned over to the employees in two years.

There are individual success stories everywhere.

Shirley Benton of Chicago, a single mother with three boys, is working as a printer with a graphic arts company after seven years on welfare. Phillip Calhoun of Wilmington, who struggled between part-time jobs and public aid to support his wife and two children, was hired at $7.87 an hour by a tire company. Two months later, he was promoted, with a raise to $9.83 an hour.

Cerise King, 30-year-old divorced mother of two who had been on welfare four years, started work this month as a part-time school bus driver for Rapid Bus Co. She will be making only $100 a week, just a little more than the $347 a month she received from AFDC, but she is encouraged.

“I feel like you have to crawl before you walk,” said King, who will continue to get food stamps. “This has opened the door. Maybe I can use (experience) to get a job driving for the Chicago Transit Authority, or United Parcel Service or the post office.”

Employers who were nervous about hiring welfare recipients at first sing the program’s praises.

“I have nothing but compliments for it,” said Karen Monahan, personnel manager at J. C. Penney in Chicago. The 13 former aid recipients the retailer hired for commissioned sales now are ranked among the top 10% of sales associates.

“I think they are hungrier, more aggressive,” Monahan said. “I think that’s because they have seen the other side.”

Marshall Field’s now has about 45 Project Chance graduates in sales, clerical and data-processing jobs, said Mary Kiener of personnel.

“It’s proven for us to be an excellent source of really skilled people,” she said. “They’re walking into the jobs with all of the skills necessary. These are people who have a different motivation to work. They really need the job.”

While Project Chance moves people off welfare, it and similar programs often do not move former recipients out of poverty.

The average salary of a Project Chance graduate is $8,448. While that’s more than the $6,888 that a family of three averages on welfare, they and their children are still poor.

Many of the jobs filled through Project Chance pay the minimum wage or slightly more, and many are part-time positions.

“One of the problems is that there is a lot of entry-level work that does not pay above the poverty-line wage,” Manpower president Guerone said. “In most cases, people may be moving off of welfare, but not out of poverty.”

Valenti agrees that entry-level jobs are not the answer but says they represent a start.

“If I convince a mother to take an entry-level job, I don’t think that’s the end,” he said. “We’ve got to leave her with the understanding that she is still a low-income person. If you take a $4-an-hour job, it’s still better than $342 a month on welfare, but it’s not the American dream. It’s not the end of the line.

“What we’ve got to consistently try to do is make it possible for that mother who can’t afford, on $4 an hour, to go to school at night or on the weekend, to take advantage of programs like that.

“Everybody has to start somewhere, but they can’t be locked into those positions forever and forgotten.”