Further Progress, Persistent Constraints: Findings From a Second Survey of the Welfare-to-Work Grants Program. Context of the Welfare-to-Work Grants Program

06/01/2000

Welfare is not what it used to be. Three dramatic shifts have occurred:

  1. In the policy framework of assistance programs and their purpose,
  2. In the organizational roles of public agencies, and
  3. In the overall economy and scale of welfare programs.

Welfare Now Defined as Short-Term Step Toward Employment. Unlike the Aid to Families with Dependent Children Program (AFDC) that preceded it, TANF is explicitly defined as short-term assistance with an emphasis on preparation for employment. TANF recipients are required to work as soon as they are job-ready or have received assistance for 24 months, and most can receive federally funded TANF for only 60 months during their lifetime. States can impose even tighter time limits and penalties. Congress underscored its emphasis on work as the goal for TANF recipients by requiring states to meet steadily increasing requirements for the percentage of their TANF caseload that must be engaged in unsubsidized employment or other work activities. In fiscal year 2000, states must have 40 percent of their caseload in work activities; this requirement increases to 45 percent in fiscal year 2001, and to 50 percent in 2002. If states fail to meet there standards, they face financial penalties. Most TANF programs therefore stress job search assistance and encourage or require recipients to find employment rapidly, rather than promote participation in extensive education and training. At the same time, most states have chosen to reinforce work requirements and incentives by disregarding larger fractions of recipients' earnings in benefit calculations as a way of making work pay, and by dedicating increased resources to child care and transportation assistance to help offset the cost of working.

Organizational Roles Have Changed. PRWORA and the BBA have given states, and even localities, increased control over their strategies for moving welfare recipients into employment. PRWORA gives states a total of about $16.5 billion annually in block grants from DHHS through FY 2002, and establishes a broad policy framework for TANF programs, but leaves states great discretion in defining the combination of financial assistance and employment and support services they offer. The BBA gave primary responsibility for WtW programs to states' workforce development agencies; although they must use WtW funds only for allowed uses, they have considerable latitude in defining ways to promote job entry, retention, and advancement. States must pass 85 percent of their WtW funding to local private industry councils (PICs) or the equivalent agencies.(4) They also have great flexibility in program design. In effect, at the local level, the job of moving welfare recipients into employment is now shared between human services agencies, responsible for TANF and its work programs, and the workforce development system with its responsibility for WtW programs.

WtW Emphasizes Employment for the Most Disadvantaged. In concept, WtW programs were intended to complement the "work first" programs that states establish with TANF funds. TANF work programs would encourage entry into the labor market by recipients who were better prepared in their education, work history, and personal skills to find and succeed in employment. WtW grants would help states and localities focus special resources and program strategies on people who were particularly disadvantaged and were likely to have the greatest difficulty finding and holding a job.

Congress sought to concentrate WtW resources on those with the greatest need in two ways. First, WtW funding allocation formulas favor areas with the greatest need by incorporating measures of the concentration of poverty and benefit receipt. Second, Congress established spending rules that required grantees to serve primarily individuals who exhibited several specific indicators of disadvantage in the labor market. As originally enacted, the BBA required that WtW grantees spend 70 percent of their grant funds on (1) long-term TANF recipients or recipients within a year of reaching a TANF time limit, who also have two of three specific problems affecting employment prospects; or (2) noncustodial parents of children in a long-term TANF case, who themselves face two of the three specified problems.(5) The three problems specified in the original language of the BBA were (1) lack of a high school diploma or GED and low reading or math skills; (2) a substance abuse problem requiring treatment; and (3) a poor work history. The remaining 30 percent could be served if they met a set of less stringent criteria.(6)

Welfare Rolls Have Declined Dramatically. The welfare rolls, which began to shrink before passage of PRWORA and the BBA, have continued to decline in the first few years since passage. From January 1994 through June 1999, the total number of AFDC (and then TANF) cases declined by almost 50 percent, from 5.05 million to 2.54 million (U.S. Department of Health and Human Services 2000). This decline, in the view of most researchers, is due in part to the waiver-based experiments of many states in the early 1990s and, subsequently, to the new PRWORA policies, as well as, in large part, to the strength of the U.S. economy. Substantial fractions of those exiting the assistance rolls are going to work.(7)

Declining caseloads are leaving TANF agencies serving individuals with a greater concentration of employment barriers. Most TANF agencies visited in the early stages of this evaluation reported that many of the more educated, skilled, and motivated recipients have left assistance, and that the remaining caseload consists largely of individuals who face the kinds of multiple barriers the WtW program is intended to address, even if they do not always meet the eligibility criteria originally set forth in the BBA. Data from a recent New Jersey survey illustrate the differences between those who have left and those who remain on assistance. Of those in the survey sample who had left assistance for employment, 66 percent had high school diplomas, and 68 percent had worked in the past two years; of those who remained on TANF, the corresponding rates were only 48 and 46 percent, respectively (Rangarajan and Wood 1999).

 

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