Welfare to Work: Are There Enough Jobs?
Claudia Melgosa is fast becoming a welfare success story. In seven months, the 27-year-old mother of two has landed work, vaulted to a better job at a Glendale storage company and moved up to a $9-an-hour customer service position.
Easing herself off public assistance after five years, Melgosa represents a transformation that state welfare officials hope to replicate thousands of times in coming years, as new laws force recipients into the work force in staggering numbers.
But that prospect is disquieting to workers such as Carlos Sabala, 47, a Santa Monica hotel employee who has toiled at low-wage jobs since he was 5. For Sabala, who earns $7.18 an hour doing housekeeping, the image of tens of thousands of newcomers elbowing others for jobs portends revolutionary changes in his working life.
“It will be harder for us that already have the jobs. We have to be more careful, do more, because we know there’s a lot of people out there that are going to come looking for our jobs,” said Sabala, who, despite his concerns, favors the idea of welfare reform. “If management doesn’t like what you’re doing, they’ll kick you out.”
Melgosa and Sabala are unwitting players in a broader drama: Landmark welfare reform, which took effect in California in January, requires an estimated 700,000 aid recipients statewide to find work within two years. And it will put welfare recipients, predominantly single mothers, in direct competition for jobs now held by poor workers, who labor in some of society’s most thankless and least rewarding jobs.
How this new rivalry plays out will help determine the success of welfare reform, one of the most ambitious social policy undertakings in decades. And, as Sabala fears, it could significantly alter the fortunes of the state’s most vulnerable workers.
“What you are going to see is a lot of bumping going on at the bottom end of the labor market,” said Manuel Pastor, an economist and chairman of Latin American studies at UC Santa Cruz, who has studied poor communities in Los Angeles.
Advocates of welfare reform argue that the economy will create enough jobs to absorb thousands of aid recipients looking for work. Others, including some economists and the workers themselves, fear that the onslaught of this new labor force will drive down wages, increase the use of part-time employees and push the working poor deeper into poverty--and possibly onto the welfare rolls.
California’s working poor consist of 2.3 million adults who toil at jobs ranging from flipping hamburgers to cleaning hotel rooms. The group is commonly defined as those whose yearly wages amount to less than 1.5 times the federal poverty level, which is $16,050 for a family of four. So a four-person family with an income of less than about $24,000 would fall into the category. Most make too much to qualify for welfare, but they still are considered poor.
The working poor outnumber the state’s welfare-receiving poor nearly 3 to 1, according to a Times analysis of U.S. Census Bureau figures. Most of them, the data show, are better off financially than welfare recipients, although a small portion survive on less money than they would collect through government assistance.
Nearly two-thirds of the state’s working poor are Latino. Most are married, and a large majority have yet to reach 40 years of age.
Welfare families by contrast are headed predominantly by single mothers, most of whom do not hold even part-time jobs. Latinos and whites account for two-thirds of welfare families in California; African Americans and Asian Americans compose one-third, more than their proportion among the working poor.
Melgosa and others like her are the vanguard of the mass migration of welfare mothers into the work force. Job counselors and others say these early birds tend to be slightly better educated and more ready for work than most welfare recipients, 52% of whom lack a high school diploma. Although Melgosa never graduated from high school, she had computer and secretarial skills from earlier jobs.
The real tidal wave of job seekers--many of whom lack skills and recent work experience--started in January when the clock began ticking for welfare recipients.
California’s robust economy, many experts contend, is still not creating enough jobs, particularly at the low end, to absorb this massive influx of new, mostly unskilled, workers. This has prompted some to liken welfare reform to a game of musical chairs, with recipients grabbing jobs once held by the working poor.
“You’re going to have some women essentially becoming welfare recipients because a welfare recipient has gotten the job that they otherwise might have gotten or kept,” said Jennifer Wolch, a USC geography professor who has studied how the poor in Los Angeles will be affected by welfare reform.
California Federation of Labor President Tom Rankin said the Legislature tried to protect the state’s working poor from this job displacement by prohibiting employers from firing workers in order to hire welfare recipients, who might be willing to accept lower wages.
But he contended that the new law, passed last summer, has few teeth and that most poor workers don’t know enough about their legal protections to protest if they are fired. Nor will the law provide any protections for the working poor who are seeking new jobs and now must compete with thousands of welfare recipients.
Many business executives disagree with those who worry about welfare recipients displacing workers. They argue that the marketplace will absorb new job seekers.
More than half of the state’s business leaders plan to hire welfare recipients and nearly half plan to expand their work forces in 1998, according to a survey by the California Business Roundtable in October.
“I see [hiring recipients] as a positive. It’s the right thing to do for the community,” said Nancy Meraz, district human resources manager for Sears in Orange County and part of Los Angeles County. “[There] is a shrinking and aging work force. We are always looking for friendly and motivated people in our stores. The more applicants we can draw and hire, [the better].”
Wage Stagnation a Key Concern
Competition for jobs is expected to be most vigorous in Los Angeles and other metropolitan areas, where The Times’ analysis found that 95% of poor workers in California live. Large numbers of them are clustered in some of the same economic sectors--such as manufacturing and retail--in which welfare recipients with low skills and poor education are expected to seek employment.
Already, Los Angeles County welfare officials report that manufacturing, personal services, retail and office jobs top the list of occupations in which welfare recipients found work during the first half of 1997. And interviews indicated that these sectors are continuing to attract large numbers of applicants.
Economic analysts believe that the abundance of job seekers may cause stagnant wages and more part-time hiring at the expense of full-time jobs.
Increasingly, the working poor, who generally need at least 40 hours of employment a week to get by on low wages, may find that the only jobs available are part time, experts say.
“The odds are this influx will more than likely increase the incidence of part-time work in a market that is already saturated,” said Jean Ross, who has been studying the working poor for the California Budget Project, a nonprofit research group based in Sacramento.
Mothers themselves may contribute to this tendency by seeking only part-time employment in the early years of their transition from welfare to work. In many California counties, welfare laws will initially allow them to continue getting assistance as long as they engage in a minimum of 20 hours of work or related activity a week. (The Los Angeles County requirement is 32 hours.)
“It’s likely that many of today’s full-timers will find themselves splitting that full-time job with a part-timer who is a welfare recipient,” said Michael Hout, director of the Survey Research Center at UC Berkeley and a sociology professor.
Mara Manus, director of Chrysalis, a nonprofit Santa Monica job-training and placement service for the poor, said she is already seeing more contract and part-time jobs. “Employers are taking advantage of the fact that they can move people into temporary positions so they don’t have to pay any of the benefits,” she said.
Even now, census data show that, statewide, more than a third of retail-trade jobs and nearly that percentage of construction jobs held by the working poor are part time.
Some predict that a proliferation of part-time jobs will make the struggle to find enough hours of work increasingly difficult. “They want the hours. It’s just not there,” said Doreen Lugo, a Los Angeles shoe store manager.
Indeed, Michelle Caston, a working mother with two children, has trouble scraping by on the $5.15 an hour she earns as a clerk in an Eagle Rock gift store--not just because she’s making the minimum wage, but because she can only get 25 to 35 hours of work a week.
Relatives pitch in by taking care of her children, ages 12 and 3, Caston said. It also helps that she pays only $200 a month in rent for a subsidized low-income apartment in Pasadena. “I don’t know if you’d be able to make ends meet if you don’t have families to help out, or low-income” housing, said Caston, 32.
‘Junk Jobs . . . Don’t Pay Enough’
Some economists expect that the downside of an expanding supply of new workers will be a depression of wages.
“Actually the economy is doing pretty well at creating jobs; it’s just that they are junk jobs. They don’t pay enough,” said Hout of UC Berkeley.
But businesses say that focusing only on entry-level positions ignores the opportunities they give the newly employed to use them as springboards to posts that pay better and offer more responsibility.
A perception that fast-food jobs lead nowhere causes many openings to go unfilled, said Michael Woleslagle, a recruiter for Taco Bell who attends job fairs in hopes of hiring women off the welfare rolls. “People come up to me at job fairs and say they won’t take any job for under $8 an hour. I say to them, ‘That’s pretty shortsighted. Good luck.’ ”
Woleslagle said that while entry-level positions start at minimum wage or slightly higher, full-time employees can get a range of benefits that include medical and life insurance and company stock options, plus opportunities to move into supervisory positions. “The job has a stigma attached to it; low pay, low benefits, no future. That’s not true,” he said.
The problem is, experts say, that too few employers offer on-the-job training programs to help entry-level workers rise into more highly skilled positions. “Moving people into the labor force is really a very positive thing,” said Pastor of UC Santa Cruz. “What is discouraging is when you do it and you realize that first job may be as good as it gets.”
That disappointment can be heard in workplaces where former welfare recipients have discovered that entry-level work hasn’t been the boon they had hoped.
One production line worker at a Los Angeles electronics manufacturer said she sometimes finds cash even scarcer now than when she was getting by solely on welfare. She said she plans to take computer classes that the company offers in hopes of moving into office work before the upcoming scramble begins for entry-level jobs.
“I would like to have a better job than this--better than $5.27 an hour,” said the 23-year-old woman, who spoke on condition her name not be used. “To me, this is the bottom. To get a job at a desk--that’s the highest to me.”
The woman, who lives in Van Nuys with her daughters, ages 4 and 2, still receives some public assistance but hopes to be off welfare entirely this year.
Like her, many women will find themselves straddling the two worlds of welfare and work. Welfare officials in Los Angeles have already reported that sizable numbers of recipients, eager to get a jump on the new welfare requirements, have been making the move into the job market.
Some, like Irma Avila, a 39-year-old clerk at the Pioneer supermarket in Echo Park, still receive some welfare but consider themselves part of the working world. The mother of a 10-year-old son, Avila said it was tough finding work even before welfare reform. She searched for weeks only to be told by employer after employer, “No openings, not now.”
Avila was tossed into unemployment last year when her employer, the J.J. Newberry retail chain, went bankrupt. It was the second time in the last three years that she was buffeted by corporate turmoil. She lost an earlier job when another retailer closed.
The $5.15 an hour she earns in her current position came as a relief, but making ends meet remains a struggle. She pays a friend $1.50 an hour--more than a quarter of her own earnings--to care for her son. The $450 she receives each month in welfare helps pay the rent on her subsidized apartment near USC. Avila hopes that recent turnover at the supermarket will mean more hours for her; she works just 30 a week now.
For those on all sides of the welfare-to-work issue, there is much more at stake than simply paychecks. For Melgosa, the welfare mother who has found job success at the storage company, and Sabala, the hotel employee, having work also provides independence and an identity.
Melgosa no longer has to rely on her mother to pay her bills, and for the first time in her 5-year-old daughter’s life, she can afford the price of tickets to take her to Disneyland.
Sabala finds keeping his coveted job at the hotel tantamount to preserving his very self-image.
“I was trained as a young person to work and to accept labor as everything,” he said. “As I work at [the hotel], I think of it as a gem. I’m getting paid to work. Personally, inside, I really like it because it keeps my sanity.”
*
NEXT: Class war could be brewing between the working poor and welfare poor.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Who Are the Poor?
Three out of four poor families in California receive no welfare benefits. About half receiving welfare also worked part of the year. The following are comparisons between welfare families and working poor families, commonly defined as those with incomes less than 150% of the poverty level.
Gender
Poor families headed by women are much more likely to receive welfare.
Male*
Welfare Poor with Children: 19%
Working Poor with Children: 64
*
Female
Welfare Poor with Children: 81
Working Poor with Children: 36
* Includes married couples and solo male head of families.
***
Ethnicity
Latinos make up nearly two-thirds of the working poor and only slightly more than one-third of those on welfare.
Latino
Welfare Poor with Children: 37%
Working Poor with Children: 64
*
White
Welfare Poor with Children: 33
Working Poor with Children: 24
*
Black
Welfare Poor with Children: 15%
Working Poor with Children: 5
*
Asian
Welfare Poor with Children: 14
Working Poor with Children: 6
***
Age Group
Two-thirds of working poor families are headed by people under 40. Heads of welfare families tend to be a little younger than those of working poor.
18-29
Welfare Poor with Children: 36%
Working Poor with Children: 27
*
30-39
Welfare Poor with Children: 39
Working Poor with Children: 41
*
40-49
Welfare Poor with Children: 17
Working Poor with Children: 25
*
50-59
Welfare Poor with Children: 8
Working Poor with Children: 7
***
Family Type
Two-parent families typify the working poor, while families headed by single mothers account for three-quarters of the welfare poor.
Husband & wife
Welfare Poor with Children: 22%
Working Poor with Children: 68
*
Male head
Welfare Poor with Children: 4
Working Poor with Children: 9
*
Female head
Welfare Poor with Children: 75
Working Poor with Children: 23
***
California families
Not poor: 78%
Poor
Job income only: 17%
Welfare and job income: 2%
Welfare only: 3%
***
Education
Lack of education characterizes welfare families and the working poor. Half of the poor have less than a high school education.
Les than high school
Welfare Poor with Children: 52%
Working Poor with Children: 51
*
High school graduate
Welfare Poor with Children: 31
Working Poor with Children: 25
*
Some college
Welfare Poor with Children: 17
Working Poor with Children: 18
*
College graduate
Welfare Poor with Children: 2
Working Poor with Children: 7
***
Children
There is a link between poverty and the number of children in a family. More than a third of welfare families and working poor families have three or more children.
One
Welfare Poor with Children: 27%
Working Poor with Children: 30
*
Two
Welfare Poor with Children: 33
Working Poor with Children: 33
*
Three
Welfare Poor with Children: 21
Working Poor with Children: 22
*
Four or more
Welfare Poor with Children: 19
Working Poor with Children: 16
***
Household Type
Solo family
Welfare Poor with Children: 78%
Working Poor with Children: 76
*
Related families
Welfare Poor with Children: 4
Working Poor with Children: 8
*
Family plus others
Welfare Poor with Children: 15
Working Poor with Children: 15
*
Other
Welfare Poor with Children: 3
Working Poor with Children: 2
Note: Percentages may not add up to 100% due to rounding
Source: Los Angeles Times data analysis by Richard O’Reilly and Sandra Poindexter, based on Census Bureau Current Population Surveys of California, 1993-97.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Where the Poor Work
Low-paying jobs are found in every industry, but they are not evenly distributed.
*
Employment by major industry category
Retail trade is the segment with the largest percentage of low-paying jobs.
Other: 37%
Transportation: 3%
Agriculture: 10%
Retail: 23%
Construction: 8%
Manufacturing: 16%
Wholesale trade: 3%
*
Retail employment
About half of the low-paid jobs in retailing are found in restaurants and bars.
Apparel stores: 4%
Grocery stores: 10%
Other: 26%
Vehicle dealers: 3%
Department stores: 7%
Restaurants and bars: 49%
*
Restaurant and bars
More than a third of the employees of bars and restaurants are poor. There is no gender difference between poor workers and those earning more. But there are ethnic and racial differences. Whites are less likely to be poor, while Latinos are more likely. Illustration shows what percentage of workers in specific jobs are poor.
*
Bartender: 40%
Table assistant: 44%
Cashier: 41%
Manager: 14%
Cook, other food preparer: 50%
Kitchen supervisor: 19%
Waitress / Waiter: 35%
Other jobs: 26%
*
All restaurant workers
Latino
Poor: 50%
Not poor: 50%
*
White
Poor: 25%
Not poor: 75%
*
Black
Poor: 37%
Not poor: 63%
*
Asian
Poor: 33%
Not poor: 67%
Note: Percentages may not add up to 100% due to rounding.
Source: Los Angeles Times data analysis by Richard O’Reilly and Sandra Poindexter, based on Census Bureau Current Population Surveys of California, 1993-97
