Fixing to Change: A Best Practices Assessment of One-Stop Job Centers Working With Welfare Recipients. What Happens When the Economy Goes Bust?


The shift in focus from economic dislocation to welfare-to-work has been a major transformation in the One-Stop concept, resulting in part from the general improvement in the national economy. No longer are the One-Stops that we examined inundated with experienced workers looking to retool their skills to find high wage employment. True, many of these systems continue to assist experienced workers in this process, but most have turned the focus of their organizations and resources onto the task of moving welfare clients into long term employment. But what happens when the business cycle inevitably turns down, employers stop hiring, and the surge of unemployment, even among experienced workers, floods the One-Stop system? Will the focus of One-Stop systems shift back to experienced workers, or will increasing TANF rolls provoke an even greater frenzy of welfare-to-work services, even if the prospects for employment have declined?

In terms of the sheer volume of client flows, it is entirely possible that many One-Stops will be able to serve much greater numbers of experienced job seekers than before via easier access to self-service job search tools. In many cases, the services provided to the cyclically unemployed clientele may have actually improved since the last recession, due to better access to labor market information and computerized job search systems. However, one area of potential conflict is in the use of on-site facilities, such as the One-Stop's resource room and computers and other office equipment made available to all job seekers. A significant influx of cyclically unemployed but more experienced workers could tend to displace those seeking to move from welfare to work, or vice versa. For example, many job clubs for welfare recipients use the resource room for resume preparation and job search activities. Under high demand, it may become necessary to schedule these limited facilities for such designated uses, limiting the access of other job seekers.

Unfortunately, as the ranks of the unemployed grow in a recession, the TANF rolls are also likely to increase as TANF recipients find fewer employment opportunities. If the recession lasts too long, more and more families may exhaust their unemployment benefits without finding employment, forcing them to rely on TANF assistance. These circumstances will place much greater stresses on the staff intensive activities of One-Stop systems, especially those intended to provide one-on-one or small group job counseling for TANF recipients.

In the past, increases in TANF caseloads have been matched with increases in federal funds, however, now that TANF is no longer a federal entitlement these federal dollars are not likely to be forthcoming in the event of a recession. In fact, state revenues typically fall during a recession, creating fierce competition between education, transportation, corrections and other established state services for these limited funds - and any tax increases a state legislature is bold enough to propose. In this context, it is highly unlikely that many states or local governments will raise funding to address the needs of higher TANF caseloads. The lack of funding and increasing TANF caseloads will cause severe financial and caseload strains for most One-Stop systems during the next recession - very possibly creating the circumstances for yet another set of "welfare reforms" by states. To the extent that these "reforms" are driven by an inhospitable labor market and fiscal necessity, the quality of One-Stop services for TANF clients is likely to suffer.

Thus, when the next (inevitable) recession occurs, the factor that may have the greatest impact on the design, funding, and function of One-Stop systems may have more to do with the rate of growth in TANF caseloads than with the unemployment rate and the numbers of cyclically unemployed job seekers.


15.  PROMISE JOBS participants who do not meet the work requirements of the Family Investment Agreement are placed on the Limited Benefit Plan. The LBP provides three months of reduced benefits, followed by 12 months of no cash benefits for the entire family, although non-cash assistance such as Food Stamps and Medicaid continue. At the end of the six-month period, recipients can reapply for benefits, but must comply with their Family Investment Agreement. No reconsideration is given for subsequent failure to comply.

16.  Thomas Fraker, Lucia Nixon, Jan Losby, Carol Prindle, and John Else, Iowa's Limited Benefit Plan, Mathematica Policy Research, Inc., May 1997, p. 26. Note that these data are for Iowa as a whole, and not the Marshalltown service area.

17.  Ibid., pp. 32-39.

18.  Smart cards provide clients with a single identification card that carries with it most of their basic information (coded on the magnetic strip) to use with several different agencies. Michigan experienced some start-up difficulties in connection with their attempt to implement this concept.

19.  One group of clients that have particular difficulty in achieving self-sufficiency are those with several children, given the income needs of the family. A few clients in our focus groups had four or five children, which tends to raise their target wage.

20.  Note that Kenosha also reports only 23 percent recidivism rate for JOBS program completers. These two measures are not necessarily inconsistent - many of the welfare referrals may be for welfare applicants who never fully engaged in the JOBS program, but dropped out prior to completion of the orientation and motivation component.

21.  This is undoubtedly due in part to the methodology for drawing the completer focus groups. Although One-Stop managers were asked to invite a cross-section of former clients representing a variety of experiences and views, in reality, several of the former participants that actually showed up were likely those who had tended to remain in contact with One-Stop staff.