State Welfare Reform Finds Ongoing Success

At a time when the nation is reconsidering its welfare system, new research shows that California’s welfare work program not only moves recipients into jobs but, once employed, they steadily earn more, reducing the need for government assistance.

In the second year of an exhaustive study on the state program known as GAIN (Greater Avenues for Independence), a national research organization reported today even greater success for the program than it had a year ago, especially in counties that placed their heaviest emphasis on job search activities rather than education and training.

For the first time, the study also showed that the GAIN program in several counties--Alameda, Butte and Riverside--was having a substantial impact on longer-term welfare recipients, the group considered the most difficult to move into the work force.

In Los Angeles, where the program produced mixed results last year, the study found that the county had made a modest improvement in helping single-parent recipients find jobs.

The research, commissioned by the California Department of Social Services, appears just as the Clinton Administration is calling on experts throughout the nation to help it prepare proposals to drastically reshape the nation’s welfare system. With the new documentation showing its effectiveness, the California GAIN program is virtually assured of becoming an important focus of the welfare debate.

It is also expected to serve as a model for other states that are either preparing to embark on a welfare work program or are planning to expand a pilot effort. Welfare work programs became a national objective in 1988 with the passage of the Family Support Act, which created Job Opportunities and Basic Skills Training (JOBS). JOBS provides up to $1 billion a year in federal assistance to states that have such programs.

With the nation’s biggest welfare caseload and one of its most ambitious work programs, California’s GAIN program accounts for about 12% of the federal government’s JOBS spending. The $249-million California program serves 125,000 recipients--about 42% of those who are eligible--and is paid for with matching state, federal and county funds.

The research was performed by the highly regarded Manpower Demonstration Research Corp., a nonprofit, New York-based research organization.

For Gov. Pete Wilson, the new data comes two days before the Legislature considers the Administration’s proposal for welfare changes that include a $69.4-million expansion and redesign of the GAIN program. To reach more recipients, Wilson has proposed that all counties orient their program more toward work and job search and less toward long-term education.

His plan would model the program on a statewide basis after the work-oriented Riverside County program, which showed the strongest results in all areas of the new study.

“You talk about somebody who is happy,” said Social Services Director Eloise Anderson. “I like to go to the (bargaining) table (with the Legislature) with data that can back up what we’re doing. This validates our approach.”

The authors of the study cautioned that several more years of research would be needed before a verdict was reached on all of the programs. James Riccio, a senior research associate and lead author of the report, said some counties, especially Los Angeles, have designed their program to be more long-term and may have better results over time.

Established in 1985, California’s GAIN program helped influence the 1988 Family Support Act and the philosophy behind it. Both embraced the idea that the acceptance of government aid carried an obligation for recipients to obtain work as soon as possible. GAIN attempted, as no other program had, to provide an array of services including education, training, job search assistance, transportation and child care.

Although the program as now designed is supposed to be mandatory for all except single parents with very young children, in some counties there is only enough funding to serve certain groups.

The new study of GAIN examined 33,000 recipients in six counties--Los Angeles, Riverside, Alameda, Tulare, Butte and San Diego. It compared the group that participated in the program with a control group that did not.

The results showed that in the second year of the study, the GAIN participants earned 24% more than members of the control group. This was an improvement over the first-year findings, which showed the GAIN group earning 17% more than the control group.

While GAIN has produced welfare savings, these have not been enough to offset the costs of the program. Nor has the two-year study produced much evidence that the program has been successful at moving recipients totally off the rolls. Researchers said recipients may need years of job experience before they are able to completely leave the welfare system.

Riverside showed markedly better results during the two-year period than any other county, with its GAIN participants producing earnings 55% higher than the control group. San Diego, Alameda, Butte and Los Angeles showed much stronger results in their second year than the first, supporting Riccio’s contention that some counties needed more time for their programs to develop.

Except for Tulare, the only county where the GAIN program appeared to have little or no impact on the employment of welfare recipients, each of the counties showed welfare savings. Counties are able to reduce welfare payments as recipients earn more money in the private sector. The research found that overall the GAIN group received 6% less in welfare payments during the two-year period than the control group.

Both Riccio and Anderson attributed the high success of the Riverside program to a number of factors, including an emphasis on job search, the use of sanctions against parents who showed poor attendance, and a can-do spirit that the program was able to instill in its recipients and workers.

“They (Riverside officials) didn’t view the recipients that came in as having a deficit,” said Anderson. “They viewed these people as having something going for them, and the program was just going to give them some more things.”

Riccio said he believes the results in Los Angeles may have lagged far behind several of the other counties because its GAIN program was targeted toward long-term recipients. Among all the counties, he said, Los Angeles had the highest number of recipients in GAIN who were considered in need of basic education--81% for single-parent families and 92% for two-parent families.

Although the study generally showed that even in a depressed economy a welfare work program can produce results, researchers said the disappointing findings in Tulare County may indicate “that when the bottom falls out economically there is nothing that can be done to counter that.”

Tulare County is in an agricultural area hard hit by unemployment and a devastating freeze.

California’s Welfare Work Program

A six-county study shows that welfare families who had state-run training, education and job search help made more in part-time income than those not in the GAIN program. The money earned as a result of GAIN help meant higher savings to the state in the form of reduced welfare benefits.

County 2-year earnings 2-year earnings % Change by GAIN recipients by non-GAIN recipients *Alameda $3,553 $2,821 +17 *Butte 4,997 4,171 +20 *Los Angeles 2,998 2,890 +4 *Riverside 5,883 3,784 +55 *San Diego 5,965 4,906 +22 *Tulare 4,324 4,439 -3

Source: Manpower Demonstration Research Corp.