The Evaluation of the Tribal Welfare-to-Work Grants Program:
Initial Implementation Findings

II. Special Circumstances of Tribes

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Contents

1. Legal Status of Tribes and Indian Self-Determination
   1. Self-Determination and Devolution
   2. Self- Determination and Welfare Reform
   3. Adaptation of TANF Rules
   4. Political-Legal Status and Barriers It Poses to Business Development and Employment
2. Socioeconomic Circumstances in Indian Country
   1. Barriers to Business Development and Job Creation in Indian Country
   2. Cultural-Historical Circumstances of Tribes That Limit Employment and Economic Development
   3. Tribal Efforts to Overcome Barriers to Economic Development

Endnotes

Tribes have circumstances different from those of other communities in the United States. The legal status of tribes, Indian self-determination and self-governance, historical/cultural factors, and socioeconomic conditions influence economic and business development and associated job creation efforts in Indian country. The special circumstances of tribes affect almost every facet of welfare reform in Indian country.

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A. Legal Status of Tribes and Indian Self-Determination

The legal status of tribes affects their economies, relations with governments (federal, state, county, and local), and relations with private-sector businesses. The legal-political status of Indian tribes is reflected in treaties, legislation, and administrative and judicial decisions. Collectively, these treaties, statutes, and administrative and judicial decisions are often referred to as "Indian law." ⁽¹⁾

Early in its history, the United States regulated many aspects of Indian affairs, by military conquest, treaty, and legislation. The U.S. government regulated where tribal members could live (for example, reservations), hunt, and fish. Laws were passed that encouraged (or required) tribes to adopt particular forms of government, policies, or procedures. ⁽²⁾ In some cases, children were forced to leave their families to attend Bureau of Indian Affairs (BIA) boarding schools, where non-Indians prescribed the language they spoke, the religion they practiced, and the material they studied. ⁽³⁾ A goal of federal policy was to eliminate the language, traditions, religion, and customs of the tribe and to replace them with those of European descent. ⁽⁴⁾ The United States also established trust responsibility for Indian tribes. In an 1831 Supreme Court case, Chief Justice John Marshall held that Indian tribes are "distinct political communities that [are] domestic dependent nations" whose "relation to the United States resembles that of a ward to his guardian." ⁽⁵⁾

In the 1970s, federal policy shifted to support Indian self-determination, with passage of the Indian Self-Determination and Education Assistance Act of 1975 (ISEAA). This law was subsequently amended and expanded to promote Indian self-governance, and a series of presidential proclamations and directives has supported a "government-to-government" relationship between the United States and tribes. Starting in 1975, tribes have had the option of taking over operation of all or a portion of their education and, subsequently, their health programs. In addition, tribes have been able to operate education, training, and employment programs such as JTPA and JOBS, funded by DOL and DHHS, respectively. PRWORA gave the tribes the opportunity to take responsibility for the relatively small WtW and NEW programs, as well as for the relatively large TANF program. At each step, Congress and federal agencies have consulted with tribes and have provided for tribal operation of programs associated with welfare reform.

1. Self-Determination and Devolution

Tribal self-determination has brought welcome opportunities, but also challenges, to tribes, much as it has to states and the federal government. ⁽⁶⁾ Program responsibilities for social welfare programs have "devolved," or been shifted, from the federal government to both states and tribes. Both states and tribes have generally welcomed this devolution, because it gives them greater discretion over program eligibility, benefits, and rules, in TANF as well as in other programs. For tribes in particular, however, this devolution brings special challenges:

• Tribes generally lack the information resources and infrastructure that states, counties, and the federal government have. For example, tribes wishing to operate their own TANF program must depend on states for information they need to construct their TANF plan and budget--for example, the number of tribal members (and other Indians living on or near the reservation) currently receiving TANF and receiving Aid to Families with Dependent Children (AFDC) in 1994. Many tribes also lack the information, telecommunication systems, and trained staff required to operate social welfare programs.
• As program resources and responsibilities devolve to tribes, the tribes may lose national, cross-tribal advocates such as the Indian Health Service (IHS) and the BIA. These agencies have advocated on behalf of all tribes to Congress, to the Office of Management and Budget, in courts, and in other venues. As resources and programs devolve from the federal government to individual tribes, national attention to and advocacy on behalf of all tribes may diminish.
• As tribes assume responsibility for and operate TANF and other welfare programs, they must negotiate and work with states and counties, and such negotiations are often difficult. Relations between tribes and states have often been strained, in part because of conflicts over sovereignty and jurisdiction, access to tribal lands by non-Indian state residents, tribal members' treaty-based rights to hunt, fish, and gather on "off-reservation" land, water rights, mineral rights, and other issues. Tribes have traditionally looked to the federal government to help resolve such issues. Cooperation between tribes and states on aspects of welfare reform such as child support enforcement and tribal administration of TANF programs must often overcome the historic tensions in state-tribal relations. ⁽⁷⁾

Tribal self-determination and self-governance pose challenges and dilemmas for states and the federal government as well. States may not face a legal requirement to support tribal programs, but the progress of tribal self-governance and program operations does create new pressures on states to cooperate in new ways. For the federal government, devolution serves the goal of increasing tribal self-governance, but treaty-based trust responsibilities still require that the federal government fund health, education, and welfare programs or provide goods and services specified in treaties. ⁽⁸⁾ The federal position on its trust responsibilities inherent in treaties with tribes is complex and subject to changes by Congress. ⁽⁹⁾

2. Self-Determination and Welfare Reform

Welfare reform promotes Indian self-determination and self-governance by providing for tribal operation of TANF, NEW, CCDF, CSE, and WtW programs. Many of the WtW grantees in the study also operate NEW programs, JTPA/Workforce Investment Act (WIA), and other programs related to employment and training. All of the WtW grantees in the study have considered submitting a TANF plan to DHHS; of the four grantees that have submitted TANF plans, all have been approved (see Table 2.1).

Because of the scope of the TANF program, the resources it requires, and the critical role of TANF for tribal members, the decision to take over operation of a TANF program is an important one for tribes. The Division of Tribal Services (DTS) in ACF is charged with reviewing and approving tribal TANF plans. DTS has supported tribal self-governance by helping tribes plan their own TANF program, and ACF has funded a project to develop materials to help tribes determine the benefits and costs associated with operating the TANF program.

In some instances, the interests of tribes and states may diverge on the issue of tribal TANF. For example, adequate funding of tribal TANF programs depends on state legislatures' willingness to maintain the state matching of federal dollars that was required in the AFDC program, the precursor to TANF. When a portion of the state's TANF block grant passes to a tribe administering its own TANF program, the state's required Maintenance of Effort level is reduced proportionately based on the fraction of the state's former AFDC caseload that has been transferred to the tribal program. States are not required to pass on any portion of the Maintenance of Effort funds to tribes. Thus, tribal TANF programs could receive substantially lower TANF funding than was directed to tribal members in FY 1994.

Table 2.1
Selected Welfare-related Programs Operated by Study Grantees

Program	CIMC	Cherokee	Kickapoo	Klamath	Navajo Nation	Nez Perce	Red Lake	TCC	TAT	White Earth
WtW	X	X	X	X	X	X	X	X	X	X
NEW	X	X	X		X	X	X	X	X	X
TANF				X	X	X		X
CSBG	X	X			X	X		X	X	X
JTPA/WIA	X	X	X	X	X	X	X	X	X	X
TERO		X		X	X	X	X	X	X	X
VOC. ED.		X	X	X	X	X	X	X	X	X
VOC. REHAB.		X	X	X	X	X	X	X	X	X
BIA GA		X	X	X	X	X	X	X	X	X
DEAP				X		X	X	X	X	X
CCDF		X	X	X	X	X	X	X	X	X
BIA GA = Bureau of Indian Affairs General Assistance CCDF = Child Care Development Fund CIMC = California Indian Manpower CoConsortiumrporation CSBG = Community Services Block Grant DEAP = Direct Employment Assistance Program JTPA/WIA = Job Training Partnership Act/Workforce Investment Act TAT = Three Affiliated Tribes TCC = Tanana Chiefs Conference, Inc. TERO-Tribal Employment Rights Office VOC. ED. = Vocational Education VOC. REHAB. = Vocational Rehabilitation

The ability to operate a TANF program is especially important to tribal self-governance because TANF is a relatively large program in number of clients served, number of program staff, and total expenditures. For the four tribes in the study that operate TANF programs, the aggregate TANF budget is more than 10 times the total of their WtW budgets.

3. Adaptation of TANF Rules

Tribal operation of TANF can improve the fit between eligibility rules, the traditional tribal economy, and special circumstances of the tribe. In some states, TANF rules are not ideally suited to promoting self-sufficiency in some tribal communities. For example, resource limits would make a family with a single car valued at more than a prescribed limit ineligible for assistance, and families could not own more than one car and one snowmobile. Tribes, in taking over TANF, have adjusted resource limits to recognize the role that such equipment plays in survival and subsistence. In Alaska, for example, native families may traditionally hunt together as a unit, and a family with three children would need more than one snowmobile to fish or hunt game, which may contribute a large share of the family's diet. Tribes have recognized such realities in their eligibility rules when they operate the TANF program.

Provisions of federal laws and regulations can complicate the operation of a tribal TANF program. For example, if more tribal members are currently eligible for TANF than the number receiving AFDC in FY 1994, there will not be enough federal funding to serve them. Tribes depend on states to provide the current TANF and 1994 AFDC utilization data. Without these data from the states, a tribe cannot determine the number of people to be served and whether the level of federal funding would be adequate. Identifying the number of tribal members receiving TANF or participating in other programs often is very difficult, primarily because state, federal, and other programs often do not determine and record a person's tribal membership. Determining the number of tribal members receiving services such as AFDC in 1994 represents an even greater challenge.

Despite these challenges, some indications of the direction of changes in tribal TANF participation are available. Three of the WtW grantees in the study reported significant increases in members eligible for TANF since 1994; one of the grantees reported significantly fewer members eligible for TANF, and the remaining six grantees lacked the necessary data to make such a determination. The increase in eligible TANF participants at the three study sites was attributed by tribal leaders to a worsening in the regional economy, improvements in the identification of tribal members, and inclination among tribal members to use services when they are delivered in culturally sensitive ways through program offices run by tribes on or near the reservation.

4. Political-Legal Status and Barriers It Poses to Business Development and Employment

The special political-legal status of tribes can contribute to barriers to business development and associated employment in Indian country in the following ways:

• Complex Business Site Leasing Process. Some reservations are "closed," (i.e., all land is owned by the tribe rather than by individuals) making it difficult or impossible for a private sector, non-Indian-owned business to purchase or lease land. If leasing land is permitted, the approval process may be complex and time-consuming, requiring years to complete, thus discouraging a business from opening on the reservation. If the land is held in trust by the United States, additional approvals may be required by the Secretary of the Interior, adding to the complexity of the process.
• Sovereign Immunity of Tribes. Because tribes have sovereign immunity, nontribal businesses and other entities cannot sue them in case of contractual or other disputes. Businesses may fear that they may not obtain a judicial remedy from arbitrary or unfair decisions made by a tribe associated with changes in tribal administration or other factors.
• Trust Status of Land. Land on a reservation may be held in trust by the federal government and, thus, cannot be bought and sold. Consequently, the tribe cannot use trust land as collateral to obtain a loan from a financial institution. Some businesses have refused to locate on a reservation if they cannot own the land where the business is located.
• Dual Taxation. While there are federal tax incentives designed to foster economic development on reservations, companies operating on reservations may be subject to dual taxation--by the tribe and by the state in which they are located.
• Lack of a Commercial Code Regulating Business. A tribe may lack a commercial code (i.e., laws and regulations governing commerce on the reservation). Lack of such a code can discourage banks from financing businesses. It also may discourage commercial development, because potential investors and developers require the structure and security such a code provides. Such concerns are amplified by the sovereign immunity of a tribe.

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B. Socioeconomic Circumstances in Indian Country

The socioeconomic circumstances of tribes affect the nature of the workforce, and the lack of jobs on many reservations is a serious handicap to moving people from welfare to work. While the circumstances of each tribe are unique, most tribes have experienced economic, education, housing, health, and other problems at levels of severity rarely seen in most other American communities. These problems are long-standing--many generations of American Indians and Alaska Natives have experienced them, and they reflect unique historical and cultural factors, as well as socioeconomic ones. Examples of the difficult socioeconomic circumstances in Indian country include:

• Unemployment on many reservations ranges from 40 to 80 percent. ⁽¹⁰⁾
• Fewer than 9 percent of Indians earn a bachelor's degree or higher (compared with more than 20 percent for all races). ⁽¹¹⁾
• Almost one-third (32 percent) of Indians had incomes below the poverty level (compared with 13 percent for all races). ⁽¹²⁾
• American Indian death rates from accidents, diabetes, liver disease, and tuberculosis are between three and five times that for all races, and the years of productive life lost are more than 1.5 times that of all races in the United States. ⁽¹³⁾
• Forty percent of reservation housing is considered substandard, compared with 5.9 percent of housing generally; 21 percent of reservation dwellings are overcrowded, and 16 percent lack adequate plumbing. ^{(14) (15)}

Tribes face the challenges of few jobs and a workforce with substantial personal barriers to employment. Among the study grantees, the percentage of unemployed people in the workforce ranges from 12 percent at Cherokee to 71 percent at Tanana Chiefs Conference, with six of the grantees having more than 50 percent unemployment (see Table 2.2). This is more than ten times the national rate of 4.2 percent. In 8 of the 10 study sites, the majority of the workforce has a high school diploma or equivalent, but the percentage of high school graduates in all sites is substantially lower than the national rate of 83 percent. No grantee in the study has a workforce with more than 9 percent having a bachelor's degree or higher, in contrast to the U.S. population, where 25 percent have earned at least a bachelor's degree.

Table 2.2
Grantee Labor Force, Employment, and Poverty Data

Grantee	Labor Force	Percent Unemployed	Percent High School Graduate or Higher	Percent Bachelor's Degree or Higher	Per-Capita Incomea	Number of TANF Recipients	Percent Below Poverty
CIMC	23,384	n.a.	n.a.	n.a.	n.a.	160	n.a.
Cherokee	2,366	12.0	63	1	$6,382	87	n.a.
Kickapoo	350	24.0	72	9	$4,831	10	n.a.
Klamath Tribes	735	42.0	63	3	$5,672	28	19.0
Navajo Nation	41,451	58.0	41	3	$11,835	27,000	33.0
Nez Perce	743	64.0	71	1	$6,102	109	n.a.
Red Lake	871	62.0	65	5	19,390	650	49.0
TCC	142	71.0	64	1	$6,927	174	43.0
TAT	1,059	61.0	70	1	$4,849	114	38.0
White Earth	765	55.0	61	1	$4,917	149	10.0
United Statesb	139.4 million	4.2	83	25	$24,314	5,780,543c	11.8
n.a. = not available. Source: Grantees and Tiller (1996). a Income listed for Navajo Nation and Red Lake Tribe is per household (per-capita data unavailable). b U.S. Bureau of the Census. "USA Statistics in Brief, 1999." http://www.census.gov/statab. Accessed 4/24/01. http://www.acf.dhhs.gov/news/stats/3697.htm. Accessed 4/24/01.

The low level of educational attainment represents a major barrier to employment of tribal members in many jobs in the economy and bodes ill for future employment. The per-capita income at each of the grantees for which data are available was below the poverty rate of $8,590 ($10,730 in Alaska) in the year 2000 (the $11,835 reported for the Navajo Nation is per family, not per capita). The percentage of tribal members with incomes below the poverty level ranges from 10 percent (White Earth) to 49 percent (Red Lake), compared with 11.8 percent for the United States as a whole.

In addition to limiting the transition from welfare to work, the lack of jobs and low income levels have other pernicious effects. Unemployment breeds more than poverty--it contributes to a sense of futility and a cluster of social ills. School dropout rates among Indians are high. Abuse of alcohol and other drugs is widespread; the mortality rate for Indians associated with alcohol-induced chronic liver disease is more than twice that of all races in the United States. Depression is common, and the suicide rate for Indians is 2.8 times greater than that of all races in the United States. ⁽¹⁶⁾

1. Barriers to Business Development and Job Creation in Indian Country

Basic infrastructure components needed to promote and support business development and associated job creation often are absent or underdeveloped in Indian country. The grantees participating in the study provide good examples of how shortcomings in transportation, electricity, telecommunications, computing, and workforce preparation affect economic development and welfare reform in Indian country.

While the emphasis on moving members from welfare to work has encouraged tribes to identify and try to remove barriers to economic development and job creation on tribal lands, significant barriers still exist. Few private-sector employers have been attracted to Indian country, and few tribally owned or sponsored enterprises have generated enough jobs to dramatically reduce unemployment on reservations. Barriers to economic development and job creation in Indian country include:

• Remote Location and Inaccessibility. Many tribes and Alaska Native villages are located far from urban markets and resources and from major road, rail, and airport facilities. This distance barrier is often compounded by extremes in weather--extreme heat in the summer or extreme cold in the winter--as in the areas served by the Tanana Chiefs Conference (Box II.1). Tribes often lack the infrastructure--such as public transportation, good local roads, and modern telecommunications--needed for economic development.

Box 2.1: Tanana Chiefs Conference, Inc. (TCC) — Subsistence Economy in an Extreme Environment In 1996, the TCC service population was estimated at 11,086 people-predominantly Indians, but also including Eskimos and Aleuts. The 43 Alaska Native villages where the majority of the TCC service population resides tend to have fewer than 500 inhabitants. Most of these villages-spread across an area only slightly smaller than Texas-are hundreds of miles from the nearest city, Fairbanks. They are accessible by bush plane, boat, or snowmobile, but not by road. Lack of transportation is a critical barrier to employment. Few village landing strips can be used after sundown for lack of landing lights. Life in the villages is harsh. Homes in the villages generally lack indoor plumbing, electricity, and telephones. Most villages have a common source of water (for example, washeteria), and water is hauled to each home from the central source. The climate is subarctic with long, harsh winters and short, warm summers. Summer highs range from 65oF to 80oF; winter lows are well below zero degrees. Extended periods of -30oF are common, as are annual snowfalls exceeding 50 inches. The economy of most of the TCC villages is subsistence based. It includes hunting (moose, caribou, porcupine, rabbit, and ptarmigan), freshwater fishing, and harvesting berries.

• High Crime Rate. High crime rates discourage business investment and development. Most of the study sites reported high crime rates and active youth gangs, and some tribal courts have a large backlog of criminal cases.
• Lack of Banks and Capital. Because of distance from financial centers and other factors, few financial institutions serve tribes, and few tribal members have savings or collateral needed for loans to finance business enterprises. Making matters worse, much of the money that flows into reservations is spent on goods and services available only off the reservation. Study informants estimated that 60 percent of dollars spent by tribes and tribal members are spent off the reservation.
• Undesirable Workforce Characteristics. Most of the study grantees have relatively small numbers and proportions of highly trained and educated workers and relatively large numbers of people lacking education beyond high school. It is commonly believed that relatively high proportions of people in the workforce have problems with substance abuse and other illnesses such as diabetes. Such workforce characteristics may discourage private-sector employers from investing in a reservation community.

2. Cultural-Historical Circumstances of Tribes That Limit Employment and Economic Development

The historical experience and cultures of tribes affect employment in Indian country. Relevant factors include (1) racism and discrimination against Indians; (2) values and expectations about cultural and environmental preservation, work, and development; and (3) limited English-speaking skills associated with English as a second language.

A history of being the target of exclusion, discrimination, and racist stereotypes can contribute, among Native Americans, to a suspicion about or rejection of non-Indian initiatives, programs, and enterprises. Tribal leaders and program managers at most of the study sites said that relatively few tribal members are employed by non-Indian businesses in "border towns" near reservations. The primary explanations given for low levels of employment of Indians in border towns were hostile attitudes of non-Indians toward the tribe and its members, rooted in a history of intergroup conflict and competition, racism, and employment discrimination against Indians. Informants described such prejudice and discrimination as less acute in some areas (for example, Alaska, North Carolina) and as more acute in others (for example, Idaho, North Dakota). In general, prejudice and discrimination were given more often as explanations for low levels of off-reservation employment of Indians but less often for low levels of investment in reservation economies.

Conversely, tribal members may have negative views and expectations about non-Indian, off-reservation enterprises and organizations, and these negative views can be a barrier to economic and business development on a reservation. For example, tribal members may see non-Indian, private-sector enterprises as exploiters of Indian resources and people rather than as employers, innovators, and producers. Many study informants expressed concern about protecting the environment from pollution and a desire to conserve tribal lands for the benefit of future generations. This concern is heightened by the sense that reservations seem to attract interests wanting to dispose of medical, radioactive, and other waste products. Thus, before obtaining tribal approval, private-sector investments must pass intense scrutiny to ensure the environment is protected. These considerations have led some tribes to adopt a "do-it-yourself" approach to business development and job creation, preferring to develop enterprises without outside partners or to limit the roles these partners play.

The tribes in this study did not focus in their economic development plans on sales of goods or services to federal or state agencies, despite federal legislation and policies promoting such sales. For example, all federally recognized tribes are included in "historically underutilized business zones" (HUBZones). Participants in this program can receive federal contracts through competitions limited to qualified HUBZone firms, or on a sole-source basis. HUBZone firms are also given a price preference in bidding during full and open competition over non-HUBZone large firms. A similar federal program, the SBA 8(a) program for minority-owned business, has special inducements for tribal participation. However, the HUBZone and 8(a) programs did not appear to play an important role in the economic development plans of the tribes or consortia in the study.

Informants at each study site stressed the importance of preserving the tribal culture and identity. These values go hand in hand with the desire for self-determination and self-governance and can sometimes pose a barrier to business and economic development on the reservation. Study informants expressed concerns that, without strict tribal control, economic and business development might be hostile to (or inadvertently damage) traditional tribal culture and values. Tribal culture is often seen as fragile and still recovering from systematic past efforts by both private sector and governmental interests to eliminate it. ⁽¹⁷⁾

While most American Indians and Alaska Natives speak English as their first language, there are those for whom English is a second language and who have limited English-language skills. Considerable variation exists in the degree to which English is the language of choice in Indian country. In many tribes, most members use English almost exclusively. In other tribes, most members use the native language. In the study sample, English was not the preferred language for many members of the Alaska Native villages comprising Tanana Chiefs Conference and for members of the Navajo Nation. When combined with low levels of education, the lack of English-speaking skills can represent a critical barrier to employment of tribal members.

Finally, there is a paradox of high unemployment, low income, and wealth for some tribes. For example, unemployment is very high in some Alaska Native villages, but many villagers are stockholders in multimillion-dollar Native corporations. In accordance with the Alaska Native Claims Settlement Act of 1971 (ANCSA), tribes and Native villages in Alaska have formed 13 regional for-profit Native corporations (e.g., Bristol Bay Native Corporation, Doyon, Limited, Arctic Slope Regional Corporation). The revenues of some of the regional Native corporations approach $1 billion, and they have invested in or purchased enterprises throughout the United States. Despite the success of many of the corporations, relatively few jobs have been created in the Alaska Native villages; rather, jobs tend to be created in cities, where there is greater demand for goods and services. Furthermore, with the aim of making profits for their stockholders, Native corporations have made investments outside of Alaska. The annual dividends paid to stockholders remain modest, generally less than $2,000 per stockholder. On some reservations, gaming has produced wealth for the tribe and has created jobs; however, especially for large tribes, the number of jobs created by gaming enterprises may be small in relation to the number of unemployed or underemployed tribal members.

3. Tribal Efforts to Overcome Barriers to Economic Development

Tribes have long worked to foster economic development. For example, archeological and historical evidence shows that extensive trading took place among tribes before the arrival of Europeans to the Americas, and there was extensive trading between tribes and early European settlers. The loss of land and resources and the forced removal to reservations dealt crushing blows to most tribal economies and fostered a dependence on federal welfare programs. ⁽¹⁸⁾

In more recent times, tribes have developed overall economic development plans with the support of federal agencies such as the Economic Development Administration and Minority Business Development Administration (in the U.S. Department of Commerce), and the Small Business Administration.

Despite many obstacles, tribal economic development efforts often have been innovative and bold. Many of these efforts have produced sorely needed revenues for the tribes. Nevertheless, the current pace of job creation compared to the number of jobs needed suggests that, for many years to come, a lack of jobs will continue to prevent many TANF recipients and others from securing unsubsidized employment.

The most successful examples of economic development in Indian country include gaming and tourism. All of the WtW grantees in the study (except for the two consortia) had considered developing gaming operations. ⁽¹⁹⁾ One of the tribes has rejected the development of gaming, and the other seven tribes have implemented gaming operations. Of the seven tribes that implemented gaming, four have achieved modest success, one has been extremely successful, and two appeared on the verge of achieving high levels of success. For the Cherokee, the tribal economy has been and continues to be transformed by the success of its gaming operations (Box II.2). Even for the Cherokee, however, unemployment on the reservation still exceeded 12 percent in1998.

Some tribes have successful, even economy-transforming, gaming operations, but many tribal gaming operations have been unsuccessful or have experienced only modest success. Location seems to be critical to the success of tribal gaming operations. Factors related to location are (1) the proximity of urban population centers to the casino, (2) the presence of other tourist attractions near the casino, and (3) the availability of alternate gaming venues. The success of gaming tends to be limited for tribes distant from urban centers and for tribes near alternate gaming facilities. Conversely, gaming tends to be successful for tribes with casinos located near nongaming tourist attractions. For example, the highly successful Cherokee casino is within a day's drive of population centers such as Knoxville, Tennessee; Asheville, North Carolina; and Atlanta, Georgia. It is located near the country's most-visited national park (Great Smoky Mountains National Park), and the park brings many potential customers to the area. Finally, there are few other gaming operations near the casino that compete with it for customers.

Box 2.2: Eastern Band of Cherokee Indians (EBCI) — Surging Economy Reduces Unemployment Until the 1990s, the Cherokee faced circumstances that blocked movement from welfare to work for many tribal members. There were few paying jobs on or near the reservation, many unemployed Cherokee had less than a high school degree or equivalent, and job creation and economic development were sluggish (as they were for the rural North Carolina counties surrounding the reservation). For many years, the tribe had operated a small bingo operation; after court decisions in the 1970s and 1980s limited states' regulation of gaming on Indian reservations, the tribe expanded its bingo operation and began to market it to the public. The enhanced bingo operation was so successful that the tribe built a 60,000-square-foot casino, which has yielded millions of dollars of profits each year for the tribe. The tribe and the casino have become the largest employers in the five counties contiguous with the reservation. The casino has transformed the Cherokee economy, drawing thousands of customers each day, and stimulating the creation of a variety of service businesses such as hotels and motels, restaurants, and grocery stores. These businesses, in turn, have triggered the birth of other businesses that supply needed goods and services. By 1998, the casino and related businesses helped to drive the unemployment rate among the Cherokee from more than 50 percent to about 12 percent (although this is a figure still more than twice that of the national rate in 1998).

At Cherokee, gaming has been associated with unprecedented growth and job creation in the reservation economy. Although many casino jobs are entry- and mid-level, the casino has stimulated many other jobs in the service and retail sectors. The effects of a successful casino can reverberate throughout the reservation. At Cherokee, there are about 50 motels in the area, 15 of which have opened in the past five years. In the past year, a number of restaurants and a supermarket have opened. These new establishments are adding a substantial number of jobs. The casino has generated unprecedented profits, and the tribe uses these profits to improve programs and infrastructure, to finance economic development initiatives, and to provide modest per-capita payments to tribal members.

Other tribal casinos have been successful also. While theirs are not as successful as the Cherokee casino, White Earth, Klamath, and Nez Perce have rapidly growing casinos and associated developments. The casino operated by the Kickapoo Tribe of Kansas provides a wide range of jobs, including those for dealers, food service workers, and tellers. Casino jobs at Kickapoo have good salaries and benefits (100 percent of health insurance cost is paid for employees, as well as 80 percent for dental, eye, and prescription coverage). The Kickapoo casino has been a source of jobs for nontribal community members as well--respondents at Kickapoo indicated that some local farmers who have gone bankrupt have taken casino jobs.

Other promising approaches to economic development and job creation in the study sites include:

• Applications of Advances in Science, Technology, Engineering, and Construction to Tribal Enterprises. Several tribes in the study had applied or were applying advances to the operation of a wide range of business activities. For example, both Red Lake and Cherokee were applying modern approaches to aquaculture and preservation of fisheries; Nez Perce employ advanced breeding and veterinary approaches to maintaining the Appaloosa breed of horses. Red Lake and Three Affiliated Tribes are applying sophisticated manufacturing to the construction of modular homes and aircraft components, respectively.
• Development of Key Infrastructure. The federal government and private sector enterprises are helping tribes develop infrastructure needed to support economic development in the vast areas some tribes inhabit (Box II.3). Projects include satellite-based and cellular telecommunications, sanitation facilities, and transportation infrastructure. For example, roads and landing strips funded by the federal government have dramatically improved access by airplane to Alaska Native villages. Air travel is now the principal mode of transportation between the villages and urban centers and is used for shipping supplies, travel, and tourism. The Navajo Nation, Three Affiliated Tribes, and White Earth operate community colleges that use satellite and Internet-based systems for distance learning.

Box 2.3: Navajo Nation — Vast Area, Large Population, Few Jobs The Navajo Nation includes portions of Arizona, New Mexico, and Utah, as well as three quasi-autonomous satellite reservations in New Mexico. The Navajo Nation is vast (roughly the size of West Virginia). It includes arid deserts, alpine forests, high plateaus, mesas, and mountains as high as 10,500 feet. Most of the 234,000 Navajos on the reservation live in traditional hogans, without indoor plumbing, electricity, or telephone service. While Interstate 40 passes through the southeast corner of the Nation and U.S. highways 160 and 191 pass through the reservation, many of the roads between Navajo communities are unpaved. There is no public transportation on the reservation. Consequently, lack of transportation is a critical barrier to employment on the reservation. The reservation has significant amounts of natural resources, including timber, coal, uranium, and land suitable for agribusiness. While all of these resources are being developed, there are far fewer jobs available than people looking for work.

These initiatives have improved economic prospects and created jobs on some reservations. However, the slow pace of economic development in Indian country stymies the goal of welfare reform--moving people from welfare to work. As described later in this report, dedicated efforts by TANF, WtW, NEW and other programs operated by states and by tribes have made some progress in identifying and removing barriers to the employment of American Indians and Alaska Natives residing on or near reservations. To a great extent, however, these efforts have been unable to place large numbers of program participants in unsubsidized employment. The result is that many tribal welfare recipients are now ready and willing to work, but few jobs are available.

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Endnotes

1.  See, for example, Cohen (1982).

2.  Indian Reorganization Act of 1934 (25 USC 461-479); Public Law 83-280 of 1953 (18 USC 1321-1326); Indian Civil Rights Act of 1968 (25USC 1301-1341).

3.  American Indian Policy Review Commission (1997).

4.  American Indian Policy Review Commission (1997).

5.  Cherokee Nation v. Georgia (1831).

6.  In this context, "tribal self-determination" is broader than the Indian Self-Determination and Education Assistance Act of 1975 (PL 93-638) and refers to broad tribal and federal policies that promote tribal control and self-governance.

7.  While there were treaties and other legal relationships between Indian tribes and European nations and, subsequently, individual American colonies, relations with the United States are expressed in the Constitution under the Indian Commerce clause, article I, section 8, clause 3: "The Congress shall have Power to regulate Commerce with foreign nations, and among the several States, and with Indian Tribes." The Indian Trade and Intercourse Act of 1790 brought nearly all interaction between Indians and non-Indians under federal control.

8.  The United States negotiated formal treaties with individual tribes until the Treaties Statute of 1871 ended that practice.

9.  In Lone Wolf v. Hitchcock, the court held that rights established by treaty or other documents can be abrogated by Congress pursuant to its plenary powers.

10.  Bureau of Indian Affairs (1997).

11.  U.S. Bureau of the Census (1990).

12.  U.S. Bureau of the Census (1990).

13.  Indian Health Service (1998).

14.  U.S. Bureau of the Census (1990).

15.  National American Indian Housing Council (1998).

16.  Indian Health Service (1999).

17.  Indian Health Service (1999).

18.  American Indian Policy Review Commission (1997).

19.  Two of the WtW grantees in the study--TCC and CIMC--were tribal consortia. Neither TCC nor any of its members had gaming operations. Several members of CIMC had implemented gaming operations, but CIMC as a consortium organization had not.

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