National Evaluation of the Welfare-to-Work Grants Program: Final Report. Compensation

09/01/2004

The elements of employment compensation considered in this evaluation are the hourly wage rate and fringe benefits, with a focus on health insurance, paid sick leave, and pensions.(45) As in the previous subsection, the findings reported here are based on the principal job held by WtW enrollees who were employed two years after program entry.

WtW enrollees in seven of the study sites had a mean nominal wage rate on their primary job of about $8 per hour (Exhibit IV.7). West Virginia, Baltimore County, Boston, and Milwaukee were the exceptions to this pattern. Although enrollees in West Virginia had more favorable employment outcomes than those in many of the other study sites, their mean hourly wage rate ($6.40) was notably low. In contrast, the mean wage rates for WtW enrollees in Baltimore County ($9.89), Boston ($10.02), and Milwaukee ($9.91) were well above those for enrollees in the other sites. In all sites except West Virginia, over 90 percent of enrollees earned wages greater than the minimum wage of $5.15. West Virginia had the greatest proportion of enrollees earning wages below the minimum wage (12 percent) and below $8.00 per hour (87 percent).

The mean hourly wage rate on the principal job held two years after program entry was essentially unchanged from the year before in about half of the study sites, but was higher in the others (Exhibit IV.8). Where there was an increase, it was not dramatic, except in Milwaukee where it exceeded $2 per hour. In the other sites where there was an increase, it was in the $0.40-$0.80 range, which generally represents about 5 to 10 percent of the first-year wage. In Milwaukee, the mean hourly wage was $2.17 higher at the end of the second year than at the end of the first year, but this site exhibited a large decline in employment between the two years (about 8 percentage points, the highest among all sites). The observed increase in the mean hourly wage was partly the result of enrollees with low first-year wages losing their jobs by the end of the second year. In fact, of the enrollees who had been employed at the end of the first year, those who were still employed at the end of the second year had first-year average wages over $1 higher than those who were no longer employed.

Overall, fringe benefits were available to only modest proportions of WtW enrollees on their principal job two years after entering the program (Exhibit IV.9).(46) Consequently, the self-sufficiency of most enrollees, to the extent that they achieved it, was precarious  contingent on remaining healthy and continuing to work.

Paid sick leave either was or tied for the most common of the three key fringe benefits in most study sites, followed by a pension plan. Health insurance was the least common. Rates of availability of these three benefits ranged across the study sites as follows:(47)

  • Paid Sick Leave. The availability of paid sick leave ranged from a low of 25 percent in West Virginia and Milwaukee to a high of 62 percent in Baltimore County and Boston.
  • Pension Plan. The availability of a pension plan ranged from a low of 21 percent in West Virginia to a high of 50 percent in Phoenix.
  • Health Insurance. Participation in an employers health insurance plan ranged from a low of 16 percent in West Virginia and Yakima to a high of 47 percent in Baltimore County.

In general, there was little change over time in the availability of fringe benefits other than health insurance (Exhibit IV.10 and IV.11). Across the study sites, health insurance coverage on the principal job held two years after program entry was about the same or somewhat higher as on the principal job held at the end of the first year. Three sites  Chicago, Nashville and Philadelphia  exhibited increases 5 percentage points or more in the prevalence of health insurance among employed enrollees.

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