Throughout the years, reformers have revisited the concept of welfare recipients earning their benefits. Under the 1996 Federal Welfare Law, welfare no longer is a one-way handout. The law established designed standards and work requirements. To comply, the states must adhere to the following requirements. Welfare recipients are required to work a prescribed number of hours to receive benefits. States address the work requirement by reducing their caseloads and not process more welfare recipients through their assistance systems. State must move recipients into employment in the private sector. The problem lies in the fact that a significant number of people have a hard time finding employment.
One way the federal government help in this situation is to subsidize position that these people can fill in state and local governments, non-profit organizations or through private sector employers. It is the concept behind community service jobs. The Federal Welfare Law requires states to place welfare recipients in community service jobs in exchange for welfare benefits. Those in a community service job are in a “pay after performance” system. The beneficiary will not receive AFDC benefits until the community service job, here after referred to CSJ, has been completed satisfactorily. If the recipient fails to work the prescribed number of hours, his/her welfare benefits will be reduced accordingly (Bloom, 1997)
What is a CJS? It is a temporary bridge between unemployment and private sector jobs. Where the unemployed can gain paid work experience in a real job. Typically, there is a time limit to the position since it is only meant as a point of passage toward full-time employment. This approach not only helps the previously unemployed gain skills and experience to obtain unsubsidized employment, but also helps participating employers provide useful services. The New Hope Project tries to link people to regular employment through subsidized community service jobs and job search assistance. CSJS are a vital component of the success of the New Hope Project.
The recently enacted national welfare act requires able-bodied, working age welfare recipients placed in jobs as an alternative to welfare. This is not a new goal for welfare policy. For many years, politicians have tried different strategies to create incentives and opportunities for people to chose work over welfare. According to Richard Nathan, the 1996 welfare reform act created the strictest work requirements on welfare recipients. They must go to work after two years of welfare assistance and after five years if they have not become self-sufficient through work, and if they are unable to locate work they are still removed from the system. (Nathan, 1996).
Beginning in the 1960s, welfare reform policies sought to shift AFDC gradually from an open- ended income support program to one that assists recipients in preparing for and finding jobs. Since the early 1970s, at least some groups of AFDC recipients have been required either to work in exchange for their benefits or participate in activities intended to prepare them for work. At first, federal reforms funded employment and training services for AFDC recipients and changed the rules of welfare to increase the financial incentives to work. Over time, the notion of “mutual obligation” for the state and welfare recipient began to replace the original vision of AFDC (Bloom, 1997).
Under this view, governments provides income support and services designed to promote employment, but recipients, in turn, are required to work or prepare for work and self-sufficiency; those who fail to comply with these mandates face sanctions such as reductions in grants. This compromise sought to make welfare transitional while preserving its safety net function.
The Family Support Act (FSA) of 1988 was the last federal welfare reform prior to the 1996 legislation. The FSA emphasized training, education and work for AFDC recipients through the, Job Opportunities and Basic Skills Training (JOBS) program. JOBS became a central feature of the FSA in part because of the favorable evaluations of many state “workfare” demonstration programs that were undertaken in response to the Reagan Administration’s emphasis on work. Participating in JOBS meant agreeing to a reasonable “employability plan” the state devised, as long as the state provided child care, transportation, and other work-related expenses.
However, if the state did not have the appropriated funds to provide JOBS slot the recipient was not punished. Any recipient who complied with the imposed JOBS requirements continued to receive a welfare check. For the first time, required states to ensure that a specific proportion of AFDC recipients were participating in employee-related activities each month, through the Job Opportunities and Basic Skills Training (JOBS) program (Bloom, 1997).
In 1996, federal welfare law increased the percentages of welfare recipients required to participate in work-related activities, while simultaneously narrowing the definition of an acceptable work-related activity. It decreased the emphasis on education, training, and job search, and to increased the focus on work. Consequently, both the House and President Clinton proposed legislation, the Proposed Work and Responsibility Act (WRA) and the Proposed Personal Responsibility Act (PRA) respectfully, endorsing the merits of work.
The proposed Clinton Plan reflected the consensus embodied in the Family Support Act of 1988 that welfare recipients should be moved from cash assistance into employment and extends the JOBS participation mandate to a larger portion of the caseload. By farthe most significant change was the creation of a time limit to receiving AFDC benefits. It was called the “two years and work” provision. A two-year limit was placed on unrestricted cash assistance that would restrict for AFDC recipients with a lifetime maximum of 24 months. At the expiration of the 24- month time limit, the Clinton Plan would have required recipients to leave the JOBS program.
Recipients then became eligible for a new subsidized job program called “WORK,” assuming he or she had not refused an offer of an unsubsidized job without good cause. WORK would offer subsidies to public or private employers to encourage them to take on AFDC recipients in work-like positions. WORK participants are required to change assignments every twelve months, and would receive an intensive reassessment every two years. They would not be eligible for the Earned Income Tax Credit (and thus would always have received lower earnings than someone in comparable unsubsidized work), but are eligible to receive AFDC benefits if their WORK wages were low enough. They also could be eligible to continue receiving Medicaid and subsidized childcare.
The Proposed Personal Responsibility Act (PRA) repeals the entitlement to welfare benefits and replaces it with a block grant to states. States previously had to create and fund entitlement to welfare benefits within federal guidelines in order to be eligible to receive partial reimbursement from the federal government. The PRA abolishes any requirement that states contribute any funds of their own, as well as any individual entitlement to receive benefits, and essentially fixes the block grant in nominal dollars. While the PRA imposes few constraints on states’ abilities to spend their own funds to provide welfare benefits the restrictions on the use of the federal block grant funds are striking.
Under existing law, the federal government creates a mixture of entitlement criteria, which presumptively require the states to award benefits, and conditions on participation, which prohibit states from providing AFDC benefits to certain individuals. Under the PRA, the conditions on participation — the restrictions on who may be helped with federal funds — are toughened. (Bloom, 1997) Because of changes in federal assistance policies, states responded strategically to the changed incentives attached to federal funding.
Although the broad goals of welfare reform-reducing dependency, supporting children, and controlling costs-are likely to remain similar, enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) dramatically changes the fiscal and administrative context for states as they seek to attain these goals.
In order to receive a full TANF grant, states must meet demanding participation standards; large proportions of welfare recipients must be in work or work-related activities. In addition, federal funds can not be used to assist most families for more than five years. + States will bear more of the fiscal consequences of their policy choices. Unlike the old system, in which state expenditures were matched by the federal government on an open-ended basis, federal funding for the TANF block grants is essentially fixed for six years. Meaning states can keep the savings achieved from moving recipients off welfare, but also they will bear the increased costs if spending increases.
Finally, while many states may receive more initial federal funding under TANF than under AFDC and JOBS, over time the value of TANF block grant will decrease because the grant will not be adjusted for inflation. Together, these and other provisions of the law raise the stakes for states and recipients and magnify the need for effective work strategies. To avoid negative consequences states need to excel in linking recipients with employment and ensuring that they stay employed.
In the 1990s, states, operating under federal waivers, began testing a variety of new reform strategies. Many states have built on earlier approaches, expanding the mutual-obligation vision by demanding more recipients, and providing generous financial incentives to encourage and reward work. Some states are reducing the scope of the government’s obligation by imposing time limits on welfare receipt; this is intended to make welfare less of an option and to put more pressure on recipients to become self- sufficient (Bloom, 1997). The Wisconsin Works; W-2 as it came to be known, was an ambitious state initiative to welfare reform.
The central ideas behind W-2 is to guarantee income support to needy persons who cannot work, guarantee employment for those who can, assurance of affordable childcare and affordable health care. The program gives a glimpse at what state welfare system will look like using federal block grants. W-2 contains four main strategies. First, the plan links virtually all cash assistance to some form of employment. Second, the plan calls for reducing linkage between assistance and services such as ability to be employed.
The highest rung moves recipients into unsubsidized employment. The next lower rung is “Trial Jobs,” subsidized employment, for persons unable to obtain unsubsidized employment. The third rung is Community Service Jobs (CSJs) in nonprofit and for-profits agencies, to assist participants into unsubsidized employment or a Trial Job. The bottom rung, W-2 Transitions, is “for those legitimately unable to perform independent self-sustaining work even in a CSJ.” (Wiseman, 1996) The program is designed so as one moves up the rungs, income also rises.
New Hope’s goals are to increase employment in the Milwaukee communities, reduce poverty, and decrease the number of welfare recipients. It seeks to achieve these goals through a simple offer: Participants who work full time, defined as 30 hours per week, are assured of earning above poverty, access to subsidized child care and health insurance, and a paid community service job (CSJ) if they are unable to find unsubsidized employment. This mix of work-conditioned incentives and services makes New Hope unique among welfare reform.
The management and operations of the CSJS involved a partnership between New Hope, the sponsoring worksite agencies, and the Milwaukee Private Industry Council (PPIC). New Hope staff developed CSJ positions in sponsoring agencies, referred participants, and monitored both the participants and the worksites. A list of sponsoring worksite agencies is shown in Table 1. New Hope participants that were unable to find work in the regular labor market have the option of taking a CSJ that pays minimum wage. These jobs enable participants to quality for New Hope’s earnings supplements, health insurance, and childcare assistance, so long as participants work an average of 30 hours per week in each month. Positions are located in private, nonprofit social service agencies throughout Milwaukee.
Although the positions were created for the New Hope participants, the jobs were not guaranteed. Participants had to interview for the positions and had to perform satisfactorily in order to keep the job. They report to work as scheduled by the requirements of the worksite.
