New View of Job Effort for Welfare Recipients

In a major reappraisal of Los Angeles County’s welfare-to-work effort, a research group long critical of the program is finding that participants are earning substantially more money and moving toward self-sufficiency.

But the group that conducted the new government-funded study, the Economic Roundtable, concluded that most participants still earn too little to lift themselves and their families out of poverty.

“We’re seeing progress that we haven’t seen before, and that’s encouraging, but we still have only one-third of participants above the poverty threshold,” said Daniel Flaming, a coauthor of the report and president of the Economic Roundtable.

Flaming called on local public officials to develop training and economic development strategies that could better attack poverty. He urged officials to do more to channel aid recipients and other low-wage workers into the jobs and industries offering the most long-term promise.

“We’re used to being in a position where our beaches and sunshine took care of our economic problems, but the laissez-faire approach has stopped working for us,” he said.

The Economic Roundtable report, which cost $251,500 and was conducted over 10 months, was commissioned by the Los Angeles city Housing Authority. The aim is to use the findings to revise the job-training strategies of the independent city agency, which provides employment-related help every year to hundreds of people receiving housing assistance, including welfare-to-work participants.

Yet the study’s most provocative findings may come from the sections that review the experiences of 5,700 L.A. Housing Authority residents who went through the county’s welfare-to-work program from 1990 to 1997. The county program is believed to be the biggest welfare-to-work effort in the country.

Just a year ago, the Economic Roundtable issued a report for the county that found higher employment rates but no evidence of long-term earnings progress from the county’s program. That was at odds with the findings of another research organization, Manpower Demonstration Research Corp., which saw evidence of widespread benefits from the county’s welfare-to-work program.

Flaming said the Economic Roundtable has shifted its stance on the earnings trend in this year’s report because it has evaluated new data that include all of 1999. “What we’re seeing with the ’99 data is progress toward self-sufficiency that we haven’t seen before,” he said.

Among the 5,700 workers, average annual earnings reached $11,432 in 1999, up 19.9% from $9,531 in 1998 and more than double the decade’s low of $5,350 in 1994. To adjust for inflation, all figures were converted into 1999 dollars.

The size of the earnings improvement, Flaming said, is too dramatic to have resulted solely from the city’s economic comeback in the late 1990s. The study, at least in some respects, echoes other recently released research on the national effect of welfare reform legislation passed five years ago. The county began experimenting with welfare-to-work in the late 1980s.

Yet Flaming, like critics of welfare reform nationally, argued that the progress has been too little, despite the increased earnings. He continues to contend, as he has for several years, that the county has put too much emphasis on simply pushing people off welfare into jobs. Instead, he says, the county should expand job training to achieve better long-term results.

The Economic Roundtable report said that only 32% of the 5,700 workers were earning more than $13,424 in 1999, the level required that year to keep a single parent with two children above the federal poverty level.

David K. Clark, assistant director of the city’s Housing Authority, shared Flaming’s concern about the workers’ earnings levels. Even with the gains in the late 1990s, he said, “We don’t know whether it’s enough of an improvement to help those families weather an economic downtown.”

Among other things, the study identified jobs that are most likely to lead welfare-to-work participants in Los Angeles to economic self-sufficiency.

To find those jobs, it used payroll records from employers in Los Angeles and other data to identify occupations that require one year or less of training and no more than a high school education, provide annual pay averaging $25,000 or more and grew overall by 5% or more in the city from 1997 to 1999.

Some of the jobs meeting those criteria were bus and truck driver; utility customer-service representative; some kinds of sales representative; bill collector; typists using word processors; and various clerical positions, including billing, bookkeeping and accounting clerk.

The complete report by the Economic Roundtable is free via the Internet at https://www.economicrt.org.