Economic Development Center

7325 palmetto street
campus box 71b
new orleans, la 70125
504.483.7675
 
 

Welfare-to-Work

Thousands of people who are most dependent on their government checks are losing their benefits. Getting them trained and into real jobs is proving to be the toughest part of welfare reform.

The $3 billion Congress has allocated for Welfare-to-Work may be spent on finding jobs only for people with little education, long-term welfare dependency or histories of drug abuse - those with resumes most likely to repel employers. But local officials are finding a deeply ingrained unwillingness on the part of many welfare recipients to accept the program, and businesses that would enjoy tax breaks for hiring these people have been slow to respond. As a result, most of the job-training contracts have gone to social services agencies that can't offer participants jobs.

In Louisiana, the lion's share of Welfare-to-Work financing is a $45 million mix of federal block grants and matching state money received last year. The state Department of Labor administers the money, parceling it out over two years to various geographic areas in the state and spending almost a quarter of the total, $10.7 million, in New Orleans.

That pot is administered by the Orleans Private Industry Council. The private industry councils, which exist throughout the state, are quasi-government agencies that were involved in various job-training programs before being tapped to supervise Welfare-to-Work. Under those terms, OPIC recently has signed what it describes as "job readiness/job placement" contracts with nine local groups.

Despite the state's assurances, OPIC, with a board of directors appointed by Mayor Marc Morial, faces criticism for its handling of Welfare-to-Work. Only a fraction of the money it has received has been put to use. As of mid-June, its contracts totaled $1.9 million, or 34 percent of the initial $5.6 million grant it received in June 1998, and it is due to receive another $5.1 million this summer. But its job-training programs are helping only a few of the thousands due to lose their monthly checks under a 1997 welfare-reform rule that stops benefits after two consecutive years and five years over a lifetime.

Since January, more than 1,600 people whose benefits are running out have been referred to OPIC, almost half of the 3,446 people statewide who reached their benefits-cutoff deadline through the end of June, records show. If the pattern holds, 3,200 people will have been referred to OPIC by year's end.

Though there are 1,215 job-training slots available among OPIC's contractors, only 535 welfare recipients have signed up. And of those, only 250 are enrolled in job classes, according to OPIC officials. In other words, fewer than 20 percent of those who might fit the Welfare-to-Work criteria have pursued employment through it.

Morial, among others, has criticized the pace of Welfare-to-Work's development. At a meeting of his welfare task force in April, participants said the mayor lashed out at what he considered a lack of activity. Though Morial later downplayed the outburst, he acknowledged his concern.

Welfare professionals said one thing hindering the process is the strict "two out of three" eligibility criteria recipients must meet. To participate, most people must have spent at least 2 1/2 years on welfare. They also must have two out of three other problems: substance abuse, a poor work history or low education skills, defined as no high school diploma and poor reading ability.

The Clinton administration is asking Congress to change the rules so more people could qualify, and if those rules are relaxed, the size of the programs would quickly increase, officials said.

OPIC Executive Director Louis Saulny acknowledged that the programs have not run smoothly as he would have like and participation has fallen far short of the goals he, Morial and other officials have set.

ROCKY START
A fraction of the money that the Orleans Private Industry Council has for job training has been used.

 THE PARTICIPANTS

THE PROGRAM
1,600
Potential participants who have been referred to OPIC
5.6
Money OPIC received last year for Welfare-to-Work programs 
1,215
Job-training positions now available with OPIC 
$1.9 MILLION
Money used for job-training programs so far
535
Recipients signed up
$3.7 MILLION 
Money not yet put to use
250
Recipients actually in job training
 
WELFARE-TO-WORK
Contracts awarded by the Orleans Private Industry Council:

 PROVIDER

 TRAINING

START DATES

AVAILABLE MONEY*

TRAINING POSITIONS

Delgado Community College/Ritz-Carlton

Hospitality

Dec. 12, 1998

$251,334

75

Total Community Action

 Job readiness & placement

April 5, 1999 

$173,841 

80

Marriott

Hospitality 

May 24, 1999

$131,530

60

Tulane/Xavier University

 Job readiness & placement 

May 24, 1999

$279,303

200

Goodwill

  Job readiness & placement

May 24, 1999

$300,000

300

 Southern University at New Orleans

  Job readiness & placement

June 7, 1999

$95,171

15

Opportunity Industrialization Center

  Job readiness & placement

June 14, 1999

$161,335

75

Archdiocese/Philip Matthew Hannan Inc.

  Job readiness & placement

June 14, 1999

$290,676

60

Urban League**

  Job readiness & placement

N/A

$261,324

350

 TOTAL

$1,944,514

1,215
*Maximum funding if all positions are filled **The Urban League contract has not been finalized
Source: Orleans Private Industry Council
 
WELFARE ROLLBACK
Since welfare reform, the rolls in Louisiana have been shrinking.
Number of people on welfare
 Jan. '99
 34,178
Jan. '98
 46,593
Jan. '97
60,226
Source: Louisiana Department of Social Services
 
WELFARE FACTS
 
Training-program details
 
What job-training help is available for welfare recipients who don't qualify for Welfare-to-Work?
They are eligible for training through FindWork programs, the largest component of welfare reform. The Office of Family Support in Orleans Parish has arrangements with 30 agencies, which run 36 FindWork job-training programs. Most of those who left the welfare rolls through government job-training programs over the past two years did so through FindWork.
 
Do recipients get paid to participate in a Welfare-to-Work program?
Yes, but not in all cases. Recipients aren't paid for "job preparedness" training, but are paid for actual work they preform in those courses. For example, participants in Total Community Action's "job-preparedness" program are paid minimum wage for those hours they work in the TCA office. In addition, some programs involve subsidized employment or the state pays some salary. Also, those participating in Welfare-to-Work qualify for an exemption to the benefits-cutoff deadline, and thus continue to receive their welfare checks.
 
Once you leave the welfare rolls, do you continue to receive any other forms of public assistance?
Yes, if you are working, money for transportation, child care and counseling is available. There are no hard and fast rules for how long such assistance is available, but state officials are thinking about limiting it to six months to a year. Former recipients usually are eligible for Food Stamps and Medicaid.
Sources: Department of Social Services, Department of Labor
 

This site was prepared by the Janine Bradley, Administrative Assistant of the Economic Development Center at Xavier University in accordance with guidelines issued by the Economic Development Administration. The statements, findings, conclusion and recommendations are those of the web master and do not reflect the views of the Economic Development Administration.