The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), enacted in August 1996, brought sweeping changes to the country’s welfare system. Through the elimination of the 61-year-old Aid to Families with Dependent Children (AFDC) program and the creation of the Temporary Assistance for Needy Families (TANF) block grant, the new law shifted the emphasis of the welfare system from providing ongoing cash assistance to placing welfare recipients in jobs. The infrastructure required to accomplish these two goals is quite different. A system focused on providing income support requires staff who are proficient in three key tasks: applying complex eligibility rules to a broad range of family circumstances, determining payment amounts accurately, and issuing cash payments to eligible families in a timely manner. In contrast, a system focused on helping parents find employment requires staff who understand the labor market and how to build relationships with the business community, who can teach unemployed individuals how to look for work, and who can link them with employers who have job openings. Although the balance between these two goals has shifted, welfare offices need to be proficient in both functions to succeed in the current environment.
Local welfare offices have relied on a number of different strategies to shift to a more work- oriented assistance system. Some have either expanded the role of former income maintenance (eligibility) workers to include more tasks related to helping welfare recipients find employment, or they have hired additional staff to perform these functions. Others have created closer alliances with or transferred primary responsibility for employment-related activities to the local workforce development system. Still others have increased their use of “intermediaries” — private or public organizations that act as brokers between the welfare system and employers. Intermediaries recruit, train, and place recipients with employers, often following up to make sure that job placements are successful. Intermediaries appeal to businesses because they serve as an efficient link between the company and the welfare system. They relieve the company of administrative burdens, ensure that prospective employees are job-ready, and, in some cases, help resolve difficulties with child care, health insurance, and transportation. For welfare offices, intermediaries provide a practical way to tap existing expertise in linking job seekers with employers.
Although it is perceived that many welfare offices are using intermediaries to link welfare recipients with jobs, very little is known about how widely they are used, who these intermediaries are or how they operate. To better understand the characteristics of intermediary organizations and their role in linking welfare recipients to jobs, the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (ASPE) contracted with Mathematica Policy Research, Inc. (MPR) to conduct the exploratory research documented in this report. This research has four purposes:
The devolution of responsibility for the design and implementation of welfare programs to state and local governments makes understanding the role of intermediaries extremely complex. Thus, we begin our analysis of the role of intermediaries in Chapter II with a discussion of how much responsibility localities transfer to intermediaries, how they organize the work of intermediaries and how they reimburse intermediaries for the services they provide. Chapter III then offers a detailed discussion of how intermediaries link welfare recipients with jobs. This chapter discusses how welfare recipients are linked with intermediaries, describes the services intermediaries provide to welfare recipients and explains how intermediaries build relationships with employers and eventually link welfare recipients with jobs. Chapter IV concludes the report with a summary of the lessons learned from this analysis and a discussion of what the findings imply about future research on welfare employment efforts. Before presenting our findings, in the next section we describe our approach to studying the role of intermediaries and briefly describe their characteristics.
Intermediaries are not new to the welfare system. Prior to the implementation of TANF, some welfare offices used intermediaries (often referred to as employment and training service providers) to operate all or part of their Job Opportunities and Basic Skills training (JOBS) programs. Intermediaries also provide services to welfare recipients and other low-income job seekers through the Job Training Partnership Act (JTPA) programs. In addition, some community-based organizations act as intermediaries, helping unemployed community residents (some of whom are welfare recipients) find employment, often in conjunction with participation in other programs.
Given the broad range of organizations that might be classified as intermediaries in any one community, we sought to develop a definition of an intermediary that would allow valid comparisons across communities. After considering several definitions, we established two criteria that an organization had to meet to be classified as an intermediary for purposes of this study:
In an effort to maintain a focus on intermediaries who link welfare recipients with jobs we explicitly excluded two potentially large groups of organizations that often are thought of as intermediaries: (1) organizations that provide only supportive services (such as child care, transportation, food, clothing or legal assistance) and (2) organizations that offer only education or training services without a job placement component [such as Adult Basic Education (ABE), English as a Second Language (ESL) and General Equivalency Diploma (GED) programs and some community college education, vocational education or training programs]. While narrow in some respects, this definition made it possible to gather and compare information on the universe of intermediaries within select communities in a relatively short time frame and with modest financial resources.
To distinguish the various roles intermediaries play in helping link welfare recipients with jobs we classify intermediaries into two groups, primary and secondary intermediaries. Primary intermediaries provide job search and placement assistance, and sometimes case management, to most TANF recipients who are mandated to find employment. Secondary intermediaries operate work experience, education, training, supported work, job retention, advancement or other specialized employment programs for a more limited pool of recipients.
| What Is an Intermediary? | |
|---|---|
| Intermediary | An organization that has responsibility for linking TANF recipients with jobs through a formal relationship with the state or local entity responsible for the administration of TANF or Welfare-to-Work employment programs. |
| Primary Intermediary | An intermediary that operates a job search and placement assistance program targeted to most TANF recipients who are required to find employment. |
| Secondary Intermediary | An intermediary that operates a work experience, education, training, supported work, job retention, advancement or other specialized employment program for a limited pool of TANF recipients. |
The devolution of responsibility from the federal government to the states for developing and implementing assistance policies for needy families has spawned a broad range of approaches to transforming the welfare system into a work-based assistance system. To capture the way intermediaries function in these diverse policy environments, we purposefully selected sites that would provide us with broad regional representation; a mix of large, medium, and small TANF caseloads; different approaches to moving welfare recipients into employment; and a diversity of administrative and service delivery structures. Using these criteria as our guide, we initially selected ten states to include in the study. Once we selected the ten states, we then selected two communities, one urban and one rural, in which to conduct our analysis.(1)
Except for a few of the rural communities, sites were not chosen based on their use of intermediaries. Once we selected the sites, we collected information on intermediaries in the geographic region covered by the administrative entity responsible for TANF employment programs. Especially in the urban areas, this often included the entire county or metropolitan area in which the city of interest was located.
To the extent possible, we include inter mediaries funde d with TANF and Welfare-to-Work (WtW) dollars from each of the sites in this study. TANF employment programs generally are targeted to the entire TANF caseload while WtW programs are targeted more narrowly to hard-to-employ TANF recipients. TANF employment programs usually are administered by the welfare department, although a state or local community can choose to transfer this responsibility to another organization, such as the Department of Labor or a local Workfoce Development Board. The WtW program is administered through the Department of Labor at the federal level and through the workforce development system at the state and local level. In the study sites, both programs were administered by the workforce development system in four sites; in the remaining sites, TANF employment programs were administered by the welfare department and WtW by the workforce development system.
As the data presented in Table I.1 show, the sites represent a broad range of demographic characteristics and economic conditions. (More detailed information on each of the sites can be found in Appendix A.) The population in the central cities of the urban sites ranges from 133,000 to more than one million residents. In the rural areas, the population ranges from 25,000 to 253,000 residents, with half of the sites populated by 100,000 or more people.
| Key Character- isticsa |
Phoenix AZ |
Little Rock AR |
San Diego CA |
Hartford CT |
Jackson- ville, FL |
St. Paul MN |
Omaha NE |
Cleveland OH |
San Antonio TX |
Richmond VA |
|---|---|---|---|---|---|---|---|---|---|---|
| Population (central city 1996) | 1,159,000 | 175,752 | 1,171,121 | 133,086 | 721,139 | 259,606 | 364,253 | 498,246 | 1,067,816 | 198,267 |
| Population (county 1997) | 2,696,198 | 350,426 | 2,722,650 | 825,141 | 732,622 | 484,354 | 441,006 | 1,386,803 | 1,332,547 | 242,987 |
| AFDC/TANF Caseloadb | 15,219 | 2,168 | 38,000 | 5,800 | 3,984c | 9,300 | 3,500 | 33,000 | 13,598 | 4,539d |
| Percentage of families that are femaleheaded (1990) | 11.8 | 14.5 | 11.2 | 27.6 | 13.4 | 13.0 | 13.3 | 22.7 | 15.7 | 19.8 |
| Percentage of families below poverty (1989) | 10.5 | 10.8 | 9.7 | 25.7 | 9.8 | 12.4 | 9.6 | 25.2 | 18.7 | 17.4 |
| Racial distribution (1990): | ||||||||||
|
81.7 | 64.7 | 67.1 | 40.0 | 72.7 | 82.3 | 83.9 | 49.5 | 72.2 | 43.4 |
|
5.2 | 34.0 | 9.4 | 38.9 | 24.4 | 7.4 | 13.1 | 46.6 | 7.0 | 55.2 |
|
13.1 | 1.2 | 24.5 | 22.1 | 2.9 | 11.3 | 3.0 | 3.9 | 21.8 | 1.4 |
| High school graduation rate among adults over 25 (1990) | 78.7 | 82.0 | 82.3 | 80.9 | 76.9 | 81.1 | 82.6 | 58.8 | 69.1 | 68.1 |
| City unemployment ratee | 2.9 | 3.6 | 3.7 | 7.5 | 3.3 | 2.5 | 2.4 | 8.4 | 4.1 | 4.8 |
| Notes:
a Data are from the 1999 Annual Metro, City, and County Data Book, unless otherwise noted. b Data gathered from individual site visits, unless otherwise noted. c http://www.state.fl.us/cf_web/wages/tme_line.XLS (September 1998). d Virginia Independence Program Monthly Report, March 1998. Virginia Department of Social Services. e The State of the Cities 1999, U.S. Department of Housing and Urban Development. |
||||||||||
| Key Character- isticsa |
Yavapai County AZ |
Jefferson County AR |
Napa County CA |
New London County CT |
Suwannee County FL |
Olmstead County MN |
Scotts Bluff County NE |
Columbiana County OH |
Uvalde TX |
Wise County VA |
|---|---|---|---|---|---|---|---|---|---|---|
| Population (1997) | 144,298 | 82,259 | 119,269 | 252,958 | 33,077 | 114,619 | 36,281 | 111,644 | 25,619 | 39,288 |
| AFDC/TANF caseloadb | 582 | 956 | 590 | 2,400 | 311c | 807 | 600 | 200 | 200 | 757d |
| Percentage of families that are femaleheaded (1990) | 7.0 | 16.0 | 9.2 | 9.6 | 11.3 | 7.5 | 9.0 | 10.3 | 12.2 | 12.1 |
| Percentage of families below poverty (1989) | 9.8 | 19.3 | 4.6 | 4.7 | 15.1 | 4.5 | 11.9 | 14.0 | 40.8 | 18.8 |
| Racial distribution (1997): | ||||||||||
|
97.2 | 53.1 | 94.0 | 91.9 | 81.4 | 94.2 | 97.0 | 98.1 | 98.6 | 97.2 |
|
.3 | 46.0 | 1.1 | 5.9 | 17.7 | 1.0 | .3 | 1.5 | .5 | 2.2 |
|
2.5 | .9 | 4.9 | 2.7 | .9 | 4.8 | 2.7 | .5 | 1.0 | .5 |
| High school graduation rate among adults over 25 (1990) | 78.9 | 65.9 | 80.7 | 80.9 | 63.8 | 88.0 | 74.3 | 71.8 | 56.1 | 52.1 |
| Unemployment ratee | 4.0 | 7.8 | 6.3 | 5.3 | 5.1 | 2.9 | 4.6 | 5.5 | 12.2 | 17.0 |
| Notes:
a Data are from the 1999 Annual Metro, City, and County Data Book, unless otherwise noted. b Data gathered from individual site visits, unless otherwise noted. c http://www.state.fl.us/cf_web/wages/tme_line.XLS (September 1998). d Virginia Independence Program Monthly Report, March 1998. Virginia Department of Social Services. e 1998 Statistical Abstract of the United States. |
||||||||||
In addition to having a broad range of demographic characteristics, the sites in this study also represent a variety of economic conditions. The percentage of families living in poverty ranges from a low of 4.5 percent to a high of 40.8 percent. The unemployment rate in seven of the urban sites is lower than the national rate of 4.2 percent. In the urban sites, the highest reported unemployment is 8.4 percent. In the rural areas, the unemployment rates tend to be higher than in the urban sites. Only two of the rural sites have an unemployment rate below the national average and two have an unemployment rate above 10 percent.
The number of families who receive cash assistance in the urban areas ranges from a low of 2,168 families to a high of 38,000 families. In the rural sites, the number of families receiving TANF assistance ranges from 200 to 2,400 families.
Because states now have more control over the design and implementation of their assistance policies and programs for low-income families, requirements for and services provided to families vary from state to state, and in some cases, from one locality to another within a state. Key work-related policies that guide the delivery of employment-related services in the study states are summarized in Table I.2. Undoubtedly, some of these policies will influence the work of intermediaries more than others will, but they all help to shape the environment in which intermediaries operate. How a state or locality defines its work requirements may influence the range of services an intermediary might provide and the pool of recipients to whom they will be provided. Sanctions and time limits may influence the ease with which intermediaries are able to encourage recipients to take advantage of the services they have to offer. The provision of supportive services may help to ease the transition to work and increase job retention.
| State | Work Requirement (Single Parent, FY 1999) |
Exemptions | Sanctions | Time Limits | Transitional Benefits |
|---|---|---|---|---|---|
| Arizona | 30 hrs/wk
Mostly job-search activities — education and training determined on a case-by-case basis |
Narrow
Youngest child younger than 3 months |
Full-family (TANF)
Progressive |
24 of 60 mos | Child care, Medicaid - 24 mos
Transportation Extended EID (Earned Income Disregard) |
| Arkansas | 25 hrs/wk
Broad range of initial activities for 6 weeks then education, training, work experience — must be combined with at least 20 hours of work |
Narrow
Youngest child younger than 3 months |
Full-family (TANF)
Progressive |
24 mos | Child care - 36 mos
Transportation - 2 mos Medicaid - 12 mos Expanded and extended EID |
| California | 32 hrs/wk
Up-front job search required — education and training allowed if employed |
Broad
Youngest child younger than 6 months |
Parent-only (TANF) | 60 mos
(Parent- only) |
Child care, Medicaid - 12 mos
Expanded and extended EID |
| Connecticut | 25 hrs/wk
Mostly job search activities — education and training allowed as clients near the end of the time limit |
Broad
Youngest child younger than 12 months |
Full-family (TANF)
Progressive |
21 mos | Child care - income eligible
Medicaid - 24 mos Expanded and extended EID |
| Florida | 25 hrs/wk
Job-search for a maximum of four weeks then education and training determined on a case-by- case basis |
Narrow
Youngest child younger than 3 months |
Full-family (TANF)
Immediate |
24 of 60 or 36 of 72 mos total | Child care - 24 mos
Medicaid, food stamps - 12 mos Expanded and extended EID |
| Minnesota | 30 hrs/wk
8 week up-front job search for most clients, although alternatives such as education or training can be pursued with approval — broad range of activities after up-front job search, including education and training |
Broad
Youngest child younger than 12 months |
Partial grant (TANF)
Progressive Vendor payments |
60 mos | Medicaid - 6 mos
Expanded and extended EID |
| Nebraska | No specific number of hours
Broad range of initial activities including education and training (up to 24 months), work experience, and job search |
Narrow
Youngest child younger than 3 months |
Full-family (TANF)
Immediate |
24 of 48 mos; 60 mos total | Child care - income eligible
Medicaid - 12 mos Expanded EID |
| Ohio | 30 hrs/wk
Varies by county — must meet state work requirements; emphasis on initial job search followed by work experience |
Narrow
Youngest child younger than 12 months |
Full-family (TANF)
Immediate |
36 of 60 mos; 60 mos total | Extended EID |
| Texas | 25 hrs/wk
Mostly job search — education and training allowed if employed |
Broad
Youngest child younger than 48 months |
Parent-only (TANF) | 12, 24, or 36 of 60 mos; 60 mos total | Medicaid - 12 mos |
| Virginia | 30 hrs/wk
3 month up-front job search required — if no employment, placed in work experience — education and training allowed if employed |
Broad
Youngest child younger than 18 months |
Full-family (TANF)
Immediate |
24 of 60 mos; 60 mos total | Child care, transportation, Medicaid - 12 mos
Expanded and extended EID |
Work Requirements. The study states rely on several different approaches to help TANF recipients enter the paid labor market. Three of the states allow at least some recipients to participate in a broad range of initial work-related activities including education and training, work experience, or job search. The remaining states require all clients to participate in job search initially, reserving participation in other activities — including education, training, and community work experience — for persons who are employed, for whom barriers to employment have been identified, or who do not find employment after a specified period of time. Practically speaking, the majority of recipients initially participate in a job search program, even when states allow a broad range of work-related activities.
Exemptions. Under TANF, states are free to decide who is required to participate in work activities, although for purposes of meeting federal work participation rates, the only families who may be excluded are those with a child under the age of one. Half the states in this study changed their participation policies so that fewer clients are exempted from participation than were exempted under JOBS. All of the sites exempt some recipients from participation, in some sites, however, these exemptions are defined quite narrowly.
Sanctions and Time Limits. Seven of the 10 study states have implemented full family sanctions to enforce participation in work or work-related activities, while three eliminate only a portion of the TANF grant for noncompliance with work requirements. Eight of the ten study states have adopted a time limit that is shorter than the federal 60-month limit. The shortest time limit adopted by any of the study states is 21 months. One of the states that has adopted the 60-month time limit only eliminates benefits for the parent.
Work Supports. To support families who find work, some of the study states have adopted policies to extend Medicaid coverage and provide child care or transportation assistance to families who find employment. Several of the study states also have enacted generous earned income disregards that allow families to continue to receive cash assistance while they are working. The majority of states expanded the earned income disregard that was in place for the first four months of employment under the AFDC program and also extended it beyond the first four months. Only one state did not extend or expand the earned income disregard for working families when TANF was implemented.
Intermediaries are operating not only within a changing policy environment but also within a changing administrative environment. The shift to a work-oriented assistance system has caused some states and localities to reconsider how to best align TANF employment programs with other employment services for the disadvantaged. As a result, the administrative structures for operating TANF employment programs are more varied and complex than the administrative structures that were in place prior to the implementation of welfare reform. While some systems continue to be administered by the welfare system, others are now administered by the workforce development system or by a newly created administrative entity. Since the implementation of welfare reform, over half of the study states substantially altered the administrative structure in their local areas (see Table I.3.).
| State | State or County Administered | State Administrative Oversight of Employment Services for TANF Recipients | Changes in Administrative Oversight as a Result of Welfare Reform |
|---|---|---|---|
| Arizona | State | Combined welfare and employment services system (with separate administrative divisions) | None |
| Arkansas | State | Transitional Employment Board (TEB) | New structure — state TEB and local Transitional Employment Assistance (TEA) coalitions |
| California | County | Welfare system | San Diego divided the county into 6 service delivery regions |
| Connecticut | State | Workforce development system | Responsibility for service delivery shifted from the welfare to workforce system |
| Florida | State | Work and Gain Economic Selfsufficiency (WAGES) board | New structure — state WAGES board and local WAGES coalitions |
| Minnesota | County | Welfare system | Olmsted County shifted responsibility for service delivery from workforce to welfare system |
| Nebraska | State | Welfare system | None |
| Ohio | County | Welfare system | None |
| Texas | State | Workforce development system | Responsibility for service delivery shifted from the welfare to workforce system |
| Virginia | State | Welfare system | None |
If we take these changes into account, the intermediaries in the 10 study states operate under one of four administrative structures.
Information for this study was gathered through site visits conducted between April and August 1999 by researchers from MPR and our subcontractor, the National Alliance of Businesses (NAB). During the site visits, two-person research teams met with staff from the welfare office, an agency from the workforce development system, selected intermediaries, and employers who actively hire welfare recipients through intermediaries. We obtained information on intermediaries with whom we did not meet through meetings with staff from the welfare office and workforce development system, written material collected during our site visits, and through an information request sent to individual intermediaries.
From the site visits, general information about intermediaries was collected and entered into a database containing information on all of the intermediaries in each site. This information falls into four key areas:
In all, the database includes information on 120 intermediary organizations in 18 of the 20 sites. (Two sites have no intermediaries that met our criteria for inclusion in the study.) In the sites with intermediaries, the number of intermediaries ranges from 1 to 29. Whenever possible, we have included intermediaries funded through TANF and the Welfare-to-Work program.
As the information presented in Figure I.2 shows, the intermediaries included in this study represent a broad range of organizations. (Examples of the kinds of organizations that are represented among these various categories can be found in Appendix B.) While a few sites rely only on nonprofit organizations, most use a mix of nonprofit, for-profit, and public organizations, as well as educational institutions to link welfare recipients with jobs. (A site by site listing of the number of intermediaries by type of organization is included in Appendix C). Still, the overwhelming majority of the intermediaries in the study sites are nonprofit organizations, accounting for 67 percent of the intermediaries overall and 74 percent of the intermediaries in the urban sites. The intermediaries in the rural areas are more equally split among the various types of organizations.
Figure I.2
Types of Organizations Acting as Intermediaries
Within these broad categories, the organizations that act as intermediaries bring a broad range of expertise to the task of linking welfare recipients with employment. The majority of the non-profit organizations are of two types: (1) local entities or local affiliates of national organizations (e.g., the Urban league, Salvation Army, Goodwill, etc.) that have a long history of providing employment-related services to disadvantaged populations and (2) organizations with expertise in addressing the supportive service, and sometimes the employment, needs of special populations such as ex-offenders, persons with disabilities, or persons who speak limited English. Only a few nonprofit organizations are new to the communities in which they provide services or have no experience providing employment services to or working with welfare recipients.
Represented among the for-profit intermediaries are organizations that have been providing employment services to welfare recipients for many years and organizations that are new to the employment service arena. Most of the for-profit intermediaries are large organizations with a national presence, although a few are smaller local organizations. The educational institutions that act as intermediaries include community colleges, adult education programs, and local school districts. The public or quasi-public agencies that act as intermediaries include city governments, local JTPA agencies and public housing authorities.
1. By the time we conducted site visits to the local communities, some of the caseloads had dropped below 500 families.
2. By the time we conducted site visits to the local communities, some of the caseloads had dropped below 500 families.
3. This information is site-specific. All other information in the database corresponds to a specific intermediary.
Top of Page
Contents of This Section
Table of Contents of Report
Executive Summary
Introduction
Defining the Roles and Responsibilities of
Intermediaries
Implementation of the “Intermediary”
Function
Lessons Learned and Next Steps
Appendix A: Site Descriptions
Appendix B: Examples of Organizations Functioning
as Intermediaries
Appendix C: Number of Intermediaries by Type of
Organization
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Last updated 02/03/04