Welfare Law’s Job Goal May Be Impossible

California must move nearly 1 million people off public assistance and into jobs in the next few years to satisfy new federal welfare guidelines. But the state confronts starkly forbidding hurdles that experts say may prove impossible to overcome. Consider:

* State unemployment hovers near 7%, with most of the 1 million people looking for work not on welfare, according to the state Department of Social Services. An additional 1 million people are not counted in the labor force but want to work, and there are nearly a half-million part-time workers who would like to work more hours.

* State employment forecasters project that an average of 300,000 jobs may be created annually if California continues to rebound from the stagnant economy of the early ‘90s. Despite the signs of economic rebirth, the current rate of growth remains lower than perhaps any other period since the Great Depression.

* Those on welfare exhibit a staggering deficiency of job skills. About two-thirds of adult Aid to Families With Dependent Children recipients are unable to pass a basic literacy test, one-half lack a high school diploma and more than 40% suffer from clinical depression, according to a recent UC Berkeley study.

If California fails to meet the federal guidelines that took effect Oct. 1, the consequences could be dire. The state must put 50% of its dependent population into jobs over the next five years or risk incurring $185 million in yearly penalties, a sum that could increase for each year of noncompliance.

“For a lot of these people the jobs won’t be there and it is going to be a very bumpy ride as they try to move into the work force,” said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp.

Even many officials who support the basic thrust of the new law agree that the state faces a daunting challenge because of the rapid welfare-to-work deadlines and sheer size of its welfare caseload.

Besides financial penalties, the failure to put people to work could reap untold social distress: Under a major provision of the law, most people on welfare can receive benefits for a maximum of five years during their lifetime, after which neither the state nor the federal government is obligated to offer assistance no matter what their circumstances.

Although the state is allowed to exempt 20% of recipients from the five-year limit, experts say that category is likely to be quickly filled by those with physical and mental disabilities and other problems that make them hard to employ.

Under the best scenario, the state is likely to continue shouldering significant costs for these recipients, say experts, either through direct welfare payments or subsidized government work.

The new federal law demands that 30% of all single-parent families and 75% of two-parent households be involved in work activities by 1998. Preliminary estimates by the state legislative analyst’s office show that California may be able to achieve work participation rates for all households but will have “great difficulty” in meeting the requirements for two-parent families.

The analysis concludes that after 1998, the state may be unable to meet the work participation requirements in either category. The estimates assume that the state will exercise its option to exempt parents with children under age 1 from the work requirements.

The work participation figures also include a host of activities that qualify under the federal law but do not necessarily mean someone has a job. Vocational training, job skills training and education related to employment count as work, as does secondary school education, community service and even some forms of previous work experience if sufficient private sector employment is not available. All these activities would necessitate government funding, but it remains unclear where the money would come from since the welfare overhaul limits the federal commitment.

State officials admit the challenges are huge.

“We are looking at developing statewide strategies and working with counties to come up with localized solutions that will meet local needs,” said William C. Jordan, chief of the state Department of Social Services employment and refugee programs branch. “It will be a tremendous challenge, but we think we are well-situated and have good possibilities.”

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If the timetables, numbers and definitions seem byzantine to the average observer, they are equally so to lawmakers attempting to interpret the new landscape.

The federal overhaul of the nation’s 60-year-old welfare laws giving states the responsibility to devise their own systems of public assistance has launched a furious search for answers to one of society’s most vexing problems.

Most economists, politicians and social welfare experts would agree that the best solution to welfare is jobs for everyone.

But once past that premise, the debate is confused and contentious.

If the private sector cannot accommodate the demand, should government create jobs to put people to work? Should people be forced to take low-paying entry-level jobs at the expense of training and education that might yield better-paying, more permanent positions? And is it the state’s responsibility to foster the upward mobility of welfare recipients through education and other services?

For California lawmakers now trying to chart a course through these choppy waters, there are few easy answers.

“It is simply not reasonable to assume that the market will magically respond to produce the jobs that this act requires California to have,” said California’s chief financial officer, state Controller Kathleen Connell, who has created a task force of business, labor and government leaders to come up with job strategies. “But it would be a grave mistake for us to do away with the welfare bureaucracy only to replace it with a job subsidy bureaucracy. It would be equally self-defeating to create what I call makeshift, artificial jobs.”

State Sen. Diane Watson (D-Los Angeles), however, has argued that government should be the employer of last resort. She plans to reintroduce a bill to establish a state employment program similar to the old Works Progress Administration, which provided jobs for millions during the Depression.

“It worked successfully then,” said Watson, whose Senate Health and Human Services Committee recently held a hearing on the welfare changes.

The problem of job placement may be exacerbated by local economies that continue to sag. In Los Angeles, for example, the unemployment rate is nearly 8%, with 359,000 people out of work.

At the same time, there are more than 255,000 other adults on welfare in the county who must find permanent jobs. But despite indications that it is beginning to emerge from the recession of the early 1990s, Los Angeles County still has 300,000 fewer jobs than it had before the downturn, said economist Kyser.

Meanwhile, the industries expected to provide the most growth in the region--motion pictures, international trade, production design, computers, business services and tourism, according to Kyser--are not a good match for unskilled welfare recipients looking for entry-level jobs.

Some rural counties are faring even worse, burdened with wildly varying seasonal employment. Tiny Glenn County has an unemployment rate of nearly 15%, while the rate in Imperial County tops 34%.

Jobs--their numbers and availability--are highly changeable and often less dependent on local economies than might be assumed. And even in the midst of high unemployment, there may be thousands of jobs that go begging and companies willing to hire low-skilled workers.

As an illustration, California has recently made changes in its workfare program--Greater Avenues for Independence (GAIN)--to focus it less on training and education and more on quick job placement, after a Riverside County pilot program achieved strong results.

Job placement in Los Angeles County increased by 113%, from 10,609 job placements in 1993 to 22,567 in 1995, despite high unemployment. Statewide placements increased nearly 162%, from 35,246 in 1993 to 90,000 in 1995, according to the California Department of Social Services.

Based on the experience of Los Angeles, Riverside and other U.S. cities, many analysts conclude that entry-level positions for low-skilled welfare recipients are available if an aggressive effort is made to match individuals with specific jobs.

“We have not found much relationship between successful programs and the state of the labor market,” said John Wallace, vice president and regional manager of the Manpower Demonstration Research Corporation, a New York-based firm that studies job training. “Where you have low job growth and low employment, you still have job turnover. The successful programs have been able to ferret where the jobs are.”

But Wallace agreed that California--and the nation--is entering uncharted territory as it attempts to replicate on a large scale the gains of individual job placement programs.

Other researchers note that the kinds of jobs most available for welfare recipients would not provide long-term stability. In Los Angeles County, which recently won a Ford Foundation grant to document its GAIN success as a model for other urban areas, program administrator John Martinelli conceded that a large number of the jobs pay the minimum wage, with the current salary of those employed under the program averaging $5.60 per hour.

“They go from being on welfare to being the working poor,” said Jean Ross, executive director of the California Budget Project, a nonprofit research group. “The fear is that people are more likely to end up in dead-end jobs. And when an employer restructures or goes through a change, they don’t have the ability to adapt. When you look back over a longer period of time, people don’t tend to retain those jobs.”

Some experts contend that illiteracy and other social deficiencies pose an insurmountable hurdle for many welfare recipients, and they are bleakly pessimistic about the chances of private industry absorbing the masses of needy.

“There are many adults in their 30s and 40s and research after research shows that they are not going to get jobs because they are going to be competing with a teenager or trainable youth,” said John Doyle, director of public affairs for the Employment Policies Institute, a Washington think tank that focuses on issues of wages and employment. “My argument is they are not going to get these minimum-wage jobs--forget about jobs paying $5 or $10 an hour--and it goes right back to illiteracy.”

Indeed, the characteristics of California’s welfare population of 2.7 million would seem to pose a dismaying challenge to job stability. According to the Center for Social Services Research at UC Berkeley, as many as 28% of the parents may have substance abuse problems and more than 25% say they or their children are so disabled that they cannot work full-time.

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Some welfare recipients themselves wonder whether the government truly wants to reform the system or simply remove people from welfare rolls.

“Once they have everyone in a job at $5.50 an hour, how much will they care about training and education?” asked Diane, a 36-year-old general relief recipient who has spent the last few years in and out of rehab houses, trying to kick a substance-abuse problem.

“They will have a lot more people in minimum-wage jobs with nowhere to go.”

But like many others on welfare, she also believes that some people need to be pushed from the dole. While she has some job skills--she has worked with computers, in restaurant management and as a chef--she is also realistic about what to expect.

“I think we all need to be encouraged to want to work again. We can’t all put on suits and go to an office. Some of us are going to be waiting tables and some of us are going to be cooking.”

Some union officials warn that employers will be tempted to displace their current workers with lower-paid welfare recipients, with a resulting decline in wages for both groups.

Many also fear the creation of a new class of low-paid employees ripe for exploitation.

“The county and the state should not be able to use the misfortune of welfare recipients to avoid paying them what the deserve,” said Alejandro Stephens, president of the Service Employees International Union, Local 660, one of the state’s largest labor organizations.

But others are more optimistic about the benefits of dismantling a bloated and unwieldy system in favor of local control, noting that the new welfare law gives states wide leeway to apply creative and often untested ideas.

California officials say they are mulling over a number of strategies and also considering ideas being tried in other states.

Wisconsin was one of the first states to begin tinkering with some of the fundamental concepts of welfare and is currently experimenting with privatizing many areas of public assistance. If a county government there fails to move enough people into jobs, for example, the state can elect to contract with a private company to take over the county’s welfare function.

“The arena of competition has awakened county bureaucracies,” said Larry Townsend, the former Riverside County GAIN director who is now a private consultant. “They want to keep their jobs.”

California officials say they may also consider the approach taken by Kentucky, which has announced a plan called RAP--Relocation Assistance Program--to pay moving expenses and first month’s rent for those unable to find work in their own communities and willing to relocate for a job.

Kentucky officials say the intent is not to rid the state of welfare recipients but to identify areas within the state where jobs may be more plentiful.

“We have some parts of the state where unemployment is a low as 2% and other parts where it’s double-digit,” said Kentucky’s Commissioner of Social Insurance John Clayton. “This is just one aspect of our welfare plan but we seem to have gotten more inquiries on it than any other part.”