wage-based welfare

Wed Sep 1 21:50:05 CDT 1999

[ed:  the author of this editorial sent me this copy, and since we have had
a number of discussions on welfare reform on this list, I thought some of
you might be interested in this.  And, of course, it's reprinted with the
author's permission.]

From: dreier at tiger.cc.oxy.edu

This article appeared in yesterday's Los Angeles Times Opinion section.

	Peter

Sunday, August 29, 1999 

Treat Welfare Recipients Like Workers: Pay Them a Wage 
By PETER DREIER and FERNANDO GAPASIN

The Los Angeles County Board of Supervisors, responsible for implementing
federal welfare reform, has an important choice to make: Will it help move
current welfare recipients wage-earning jobs or will it assign them chores
that keep them in penury and undermine their ability to become
self-sufficient? 

In October, a new welfare-to-work program, Community Service Work, will go
into effect in the county. By late next year, between 5,000 and 10,000
welfare recipients must participate to continue receiving benefits. This is
part of the state's plan to give welfare recipients, mostly mothers with
young children, public-service jobs if they are unable to find work within
18 months of signing a  welfare-to-work plan.   When these recipients go to
work, will they continue to receive a  welfare check or will they actually
earn a paycheck? Under either a  grant- or a wage-based system, the county
subsidizes participants'  income, but the differences are important if we
really want, as  President Bill Clinton promised, to "end welfare as we
know it."   

In some states, former welfare recipients are deployed to undermine  the
wages and job security of existing workers. In New York City,  for example,
they replaced 7,000 unionized municipal  parks-and-recreation employees. In
Mississippi, they work off their  $165 monthly workfare grant in
sweatshop-like conditions for  employers such as Tyson's Chicken.   In
contrast, in Washington and Vermont, as well as in Detroit,  Baltimore,
Indianapolis, Oakland, Philadelphia, San Francisco and  Seattle, public
officials adopted a wage-based approach to  community- service jobs. Former
welfare recipients earn wages  ranging from the minimum to $8 an hour.   

California law requires work assignments to be in the public sector or
with private nonprofit employers; to provide participants with job skills
that can lead to a regular job; to address unmet community needs;  and to
avoid displacing regular employees. State law allows counties  to decide
whether to use the "work for your grant" approach or a  wage-based one.   

Despite the recommendations of the county's Public Social Services
Commission and Community Service Work Group, it appears that the
Department of Public Social Services, which runs welfare programs,  intends
to recommend a grant-based approach to the supervisors.   

For years, the county has used a grant-based approach, known as  workfare,
for people on general relief. Although recipients must work  alongside
regular employees, they are not considered employees.  L.A. County General
Hospital, for example, has used more than 60  recipients a day to help keep
the hospital running. But the hospital has  failed to provide them with the
same protections they are required, by  federal law, to give regular
employees. As a result, some recipients  have been exposed to hazardous
materials.   

The Board of Supervisors should learn from this flawed approach  when
devising its community-jobs program. Its goal should be to  create a ladder
for former welfare recipients to climb out of poverty.  A wage-based
program, rather than a work-for-your-grant system, is  the best way to
achieve this result. Under this approach, participants  earn taxable wages
and pay into Social Security. This would generate  more local revenue than
if they received a grant. Most important,  employees would then become
eligible for the federal Earned Income  Tax Credit, which allows low-wage
workers to receive an additional  $3,000 a year to earn their way out of
poverty. Making community  service workers eligible for the tax credit
could channel millions of  federal dollars into local communities.   

The wage-based approach changes a welfare recipient into a
paycheck-receiving employee. As the state Legislative Analyst  Office
noted, it permits workers to acquire a formal work history,  which would
boost their appeal to future employers and their chances  of moving into
regular full-time jobs. The legislative analyst also noted  that this
approach may "increase recipients' self-esteem and  confidence in seeking a
job in the labor market."   

Initially, the wage-based approach may cost slightly more in county  funds,
but these costs would be more than offset by the additional  flow of
federal earned-income credits into the county's economy and  the greater
likelihood that participants would move sooner into the  mainstream work
force.   Equally important, community-service workers can help meet county
needs without displacing existing employees. For example, they can  staff
neighborhood after-school programs, do outreach for  social-service
programs and help rebuild infrastructure in low-income  communities.   

By adopting a wage-based approach to ending welfare, the board  would not
only help welfare recipients move into the mainstream  work force, it would
also provide taxpayers with a more efficient  approach to reform. Also, by
giving people the opportunity to gain  experience, skills and wages, it
would contribute to the region's  economic prosperity and business climate.

Peter Dreier is Professor of Politics and Director of the Public  Policy
Program at Occidental College. Fernando Gapasin is Professor of Labor
Studies at UCLA