More Social, Family & Housing Policy Plays

The lasting success of welfare reform will ultimately depend not only on moving recipients and former recipients from welfare to work, but into work that pays. Although most former welfare recipients are making well over federal minimum wage, many of these "leavers" are still not earning enough to pull their families out of poverty. Studies have found that although roughly two-thirds of leavers are working, their median wage is only about $7 an hour.

These findings have led policymakers to debate the best strategies for promoting job retention and career advancement among both working recipients and leavers. Much of this discussion has also focused on the appropriate role and timing of training and education for welfare recipients.

Some advocates still favor an "education first" approach that would put recipients into long-term training or education before getting a job. But, as the Job Opportunities and Basic Skills (JOBS) program of the late 1980s demonstrated, education first is relatively ineffective compared to "work first" in moving recipients into the job force.

Education and training can be critical to ensuring that recipients and leavers stay on the job and move on to better ones. Training may also be essential in getting some recipients to become job-ready. However, education and training should not serve merely to prolong a recipient's stay in dependency. Education and training should supplement and bolster work, not be a substitute.

Several states are already following this model with pilot initiatives that would give working leavers and working recipients greater access to part-time post-secondary or vocational education so they can acquire the skills necessary to move up the job ladder.

Pennsylvania has established Individual Training Accounts for low-wage workers. The program provides low-wage workers and unemployed individuals with funding to pursue post-secondary education. The program is funded through the Workforce Investment Act and is running at the local level. Since its implementation in 1999, Individual Training Accounts have helped more than 15,000 individuals.

And through a public-private partnership, the "Thumb Area Michigan Works! TOOL CHEST" program also delivers an earn-and-learn system that awards participants with vouchers that they can use toward reaching their employment and training goals. Each participant receives a debit account that they can spend on education, training, or other support services from local public or private schools. The vouchers may also be used at local retailers to buy career clothing, safety equipment, and other job-related supplies.

In an effort to accurately evaluate such programs, the U.S. Department of Health and Human Services has partnered with MDRC. The findings from this project will help to determine exactly how different programs work, their effectiveness, and whether the cost of implementation will be worth the benefits. Currently, project sites include Florida, Illinois, Minnesota, Ohio, Oregon, Tennessee, Texas, South Carolina, California, and New York City. MDRC released their first evaluation in October 2006 focusing on the programmatic effects of the Chicago Employee Retention and Advancement Project (ERA) site. Through a random assignment study, they found that those who participated in the ERA program were more likely to find a better job and were more likely to no longer need welfare.

New Democrats should encourage the funding of local initiatives such as these that aim to provide all low-wage workers with access to opportunities for education and career advancement. Their approach will provide recipients and leavers with not only greater access to education and training, but provide it in a context that makes the most sense -- a job.

Resources for Action

Wisconsin Department of Workforce Development
http://www.dwd.state.wi.us/

Florida Jobs Business Incentives and Services www.floridajobs.org/onestop/resources/bidirectory1.htm

Thumb Area Michigan Works! Tool Chest
www.thumbworks.org/programs_toolchest.asp

Employment Retention and Advancement Project
www.mdrc.org/project_14_9.html

Additional Reading

Bloom, Dan; Richard Hendra; and Jocelyn Page. "The Employment Retention and Advancement Project: Results from the Chicago ERA Site" MDRC, October 2006. http://www.mdrc.org/publications/441/overview.html

Anne Kim, "Up the Ladder: The Role of Training and Education in Promoting Job Advancement for Welfare Recipients," Progressive Policy Institute, March 2002
www.ppionline.org/ppi_ci.cfm?
knlgAreaID=114&subsecID=143&contentID=250289

Contacts

Dr. Marvin N. Pichla
Executive Director
Thumb Area Employment and Training Consortium
3270 Wilson Street
Marlette, MI 48453
(989) 635-3561
(989) 635-2230 (fax) pichlam@thumbworks.org

Katie McMinn Campbell
Policy Analyst
Progressive Policy Institute
600 Pennsylvania Ave., SE, Suite 400
(202) 546-0007
(202) 544-5002 (fax)
kcampbell@ppionline.org