N.Y. Firm Studied for Welfare Plan Ideas : Reform: Since 1984, placement service has found jobs for 5,000 recipients. But experts warn it won’t help those who lack motivation.

As President Clinton prepares to overhaul the country’s welfare system, Administration officials are looking to the experience of a New York company that finds full-time jobs for welfare recipients and collects a fee from the government for doing it.

Since its creation in 1984, America Works has found jobs for 5,000 welfare recipients at an average annual salary of $15,000, plus benefits.

While the placement fees make the company a healthy profit, the relief from benefit payments still produces a net savings for the government, officials say.

“They’re doing exactly what you would want the welfare system to do,” said Bruce Reed, a presidential adviser and co-chairman of Clinton’s welfare reform task force. “We want to change the culture of the welfare office to try to put more in the business of doing what America Works does.”

To be sure, there are indications that the approach has limits. Some skeptics say it only works consistently for the cream of the crop--those most motivated to work. But Administration experts now think that it may provide one piece of the complicated puzzle of approaches they must assemble to replace the current maligned system.

Of particular interest to the White House is that the company has been able to provide follow-up services that help make the placements stick. They range from helping participants find child care to giving them money-management advice. Few programs run by the government or nonprofit groups do that.

The company collects its full $5,300 fee only for recipients who keep jobs more than seven months, and it gets no money unless the client stays on the job for four months.

The record so far shows that 65% are still working after seven months on the job. Participants either are referred to the company by the city’s welfare office or find it themselves through word of mouth.

Broad-scale application of the principles upon which America Works is based are likely to be necessary if Clinton is to keep his pledge to “end welfare as we know it.”

During the campaign and since, the President has said the task could be accomplished by placing a two-year time limit on some benefits and restructuring the system to make it easier for people to find jobs, Administration officials said.

“In the short term, we need to demonstrate it. Then it could be replicated elsewhere,” Reed said. “It could dramatically change the system over time.”

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One criticism of America Works--and of using it as a model for welfare reform--is the expense. The average cost per person in New York City for job placement services by public or nonprofit agencies is $3,000, compared to America Works’ $5,300. But the company and its supporters argue that America Works becomes more economical in the long run by keeping employees in jobs.

Welfare experts acquainted with America Works caution that it cannot help the many people on welfare who lack the drive to get a job and the discipline to keep it.

“It’s a very important program that we have a lot to learn from,” said Cathy Zall, the deputy commissioner of employment services for New York City, who refers people to the company. “But they pitch it as the answer to welfare as we know it, and I think that’s a little bit overstated. A lot of people are not ready to participate.”

Defenders of America Works point out that its clientele does not represent an unusual segment of the welfare population. The average client has been on public assistance for five years; 20% have not finished high school.

America Works’ founder, Peter Cove, acknowledges that his program--which has been operated in several other cities and now exists in Hartford, Conn., and Indianapolis--works only for motivated people. But he stressed that motivation can be created by giving someone a sense of opportunity.

A case in point might be Patricia Hill. When she stepped into the America Works office in Manhattan’s West Village on a referral, she was hardly the picture of determination.

“Two weeks ago, I came in here real negative,” said Hill, 28, who has two children and has been on welfare for eight years. “I thought I was just going to another training program to waste my time.”

Like other clients, she had attended training classes elsewhere before but claimed no jobs were waiting when she finished.

“Now I realize it’s time to get a job,” Hill said. “I’m 28 years old, I don’t want to be dependent on a public assistance check.”

About 35 welfare recipients, most of them single mothers, report to America Works each Monday in New York for a weeklong job-readiness boot camp, where the messages are loud and clear: Be punctual, dress professionally and have faith in yourself. Tardiness is not tolerated. Anyone who comes in late must reapply for the program, which has a waiting list of several months.

For five weeks the staff helps clients brush up on clerical and computer skills, math and grammar, teaches them how to fill out applications, design resumes and make good impressions on prospective employers. Then they send them on interviews with employers who have been courted by company sales representatives.

The representatives are paid bonuses based on the number of people they place in jobs.

America Works applicants are appealing to an employer because they remain on America Works’ payroll for four months, during which time the employer is not responsible for paying benefits or taxes.

The employer is under no obligation to hire the workers, but those that do are eligible for a tax credit of up to $1,400.

St. Martin’s Press publishing house has hired more than a dozen America Works clients for jobs ranging from mail room clerks to administrative assistants, paying between $13,000 and $19,000.

Shawn Giangeruso, a company personnel officer, said hiring people from America Works has eroded his prejudices about welfare recipients.