Fixing to Change: A Best Practices Assessment of One-Stop Job Centers Working With Welfare Recipients. Economic Support for Working Families

 

If "successful" One-Stop service delivery models are defined as those that lead parents from welfare to self-sufficiency, then the focus of the One-Stop programs needs to expand beyond employment services to include a wider array of economic supports for parents who work for low wages. Many of these supports are clearly acknowledged in the welfare-to-work process, including the provision of child care, health care, and transportation assistance. However, in most of the One-Stop models assessed by this report, these benefits are phased out after welfare recipients find employment that raises their incomes past the threshold for cash assistance.

In most cases, health care coverage (generally Medicaid) is phased out for adults 12 months after termination of cash welfare assistance.(26) Child care and transportation assistance are somewhat more problematic, generally tied to JTPA enrollment and thus dependent to some degree on local design. In most cases, funds for child care seemed to be adequate for participants in the focus groups with the exception of children with health needs, although availability of child care to match many low-wage work schedules and geographical locations is still a problem. In most cases, the added funding for child care that accompanied the federal legislation has helped make the process of job search more palatable, but the reality of the low-wage labor market is that most families who have made the transition from welfare to low-wage work cannot often afford unsubsidized child care. Even some states that have dramatically increased child care funding from their own resources, such as Washington, still find that these combined federal and state resources fall far short of the support that is needed.(27)

Housing assistance is also problematic. Nationally, over 30 percent of AFDC recipients also received federal housing assistance in the late 1980s.(28) This proportion seemed to vary considerably in the sites visited, based on anecdotal information provided during focus groups. Tarrant County seemed to be the only location where most current welfare recipients lived in public housing or received Section 8 housing assistance. This is not surprising, since it was by far the largest urban area included. It would appear that the overlap between cash welfare assistance and public housing assistance declines as the service delivery areas become more rural. As a result, most of the current program participants in the focus groups did not receive housing assistance. Under most publicly financed housing assistance programs, housing costs are kept to 30 percent of a household's monthly income, and families are rarely ever forced out of publicly owned housing. However, some families earning higher incomes may loose their eligibility for tenant based Section 8 assistance, but generally only after their incomes rise above 80 percent of the area median family income.

Because federal Food Stamp and Earned Income Tax Credit (EITC) assistance eligibility is based on income rather than other program eligibility, this support continues to be available to many parents who find low-wage work. Thus, the real household budget challenges for parents working at low-wage jobs continue to be child care, housing, and health care.

Of the sites visited, Kenosha seemed to have the most complete set of economic supports available to serve parents trying to reach self-sufficiency via low-wage employment. Wisconsin's W-2 program is designed to provide both health care and child care for working families on a sliding fee scale based on income, rather than program eligibility. Additional economic supports, such as Food Stamps, can be accessed at the One-Stop as well. Economic service workers in Kenosha (and Waukesha as well) note that the caseloads for these programs have remained relatively constant while welfare caseloads have dropped over time. This pattern illustrates the importance of these services in maintaining working families as they acquire the work experience and on-the-job skills necessary to earn higher wages. Nonetheless, several welfare advocates continue to question whether the levels of co-payments for some of these services are appropriately scaled, recognizing that many families may not reach self-sufficiency until their income reach or exceed roughly 200 percent of poverty.(29)

This concern was repeated in most of our site interviews. One-Stop caseworkers continually raised the question of whether welfare reform meant moving families from welfare to low-wage work, or from welfare to self-sufficiency. Most of these workers tried hard to prepare families for the struggles of making ends meet once they left the TANF program, making sure they understood issues of eligibility for other assistance programs. However, given the lack of resources for follow-up education and training, many of these workers remained skeptical of whether a higher proportion of their clients would achieve long term self-sufficiency, and many expressed concern about the prospects for higher need clients who now make up a larger proportion of their current caseloads.

Thus, the availability of economic support services is often critical to achieving self-sufficiency for working parents. Although many of these services are provided by state or local public agencies, it is important to note that in some states roughly half of the funding for these services is provided by federal aid.(30) Planned reductions in discretionary federal spending by roughly 10 percent (adjusted for inflation) during the next 5 years may mean that some of the federal aid for these services will be at risk, and that the demands on state resources to provide these support services may grow over time.(31) Certainly as some of the states achieve significant reductions in welfare caseloads, state policy makers will need to be increasingly concerned about the roll of these and other support services (such as mental health and substance abuse treatment) if they expect the caseload decline to continue.

Footnotes

26.  Children might continue to be covered under Medicaid, depending on family income and the level of coverage in a given state.

27.  Richard Brandon and Carol Naito, Financing Child Care in Washington State, Human Services Policy Center, University of Washington, October 1997.

28.  Sandra J. Newman, "The Implications of Welfare Reform for the Housing Assistance System," Paper presented to the 1995 APPAM Research Conference, Washington DC, November 1995.

29.  James McIntire, Richard Brandon, Robert DeWeese, Carol Naito, Julie So, and Abhay Thatte, Policy Choices for Working Families in Washington: A Baseline Analysis of State Economic Support for Working Families, Fiscal Policy Center, University of Washington, March 1997.

30.  Ibid.

31.  James McIntire and Julie So, Impacts of the 1998 Budget Agreements on King County, Fiscal Policy Center, University of Washington, June 1997.