Since its origins, it has been CFED gospel that any worthwhile reform of an anti-poverty policy, program, or project, on the federal, state, or local level, must not just lead to cuts in caseloads or transfer payments but should lead to lasting escapes from welfare or a dead-end, low-paying, benefit-less job. For a number of years, despite reductions in the size and shape of America's safety net, we seemed to be making progress.
A full employment economy during part of the Clinton Presidency generated wage gains for those at the bottom of the income scale. Better work supports, such as extended health benefits and child care subsidies, were increasingly provided. And there seemed to be a growing consensus that improved access to longer-term training, real credentials, and post secondary education at community and four-year colleges were the real ticket out of poverty for both the unemployed and the working poor.
Now, a new book, Putting Poor People To Work, by Kathleen Shaw, Sara Goldrick-Tab, Christopher Mazzeo, and Jerry Jacobs, has documented a recent switch in policy philosophy that "work-first", rather than a human capital strategy, is the primary labor force approach for the economically struggling. Job search assistance in most states almost always trumps the education option for both the Temporary Assistance to Needy Families (TANF it ended "welfare as we've known it") and the Workforce Investment Act (WIA it replaced the Job Training Partnership Act). Only 14 states allow education or training as a "stand alone" activity for welfare recipients. (For the rest, you must be working and attending school.) The number of those on TANF who applied for Title IV student aid for attending college declined 38 percent in the late 1990s, while nationally the number of applicants for fiscal aid rose. In Pennsylvania, the number of TANF participants attending college dropped 98 percent!
The educational and training offerings are shorter-term for TANF and WIA, making it harder to start on a real career or to experience a significant increase in employability. Moreover, WIA, unlike JTPA or earlier federal workforce development programs, is open to all Americans, not just the poor. Consequently, the number of low-income participants in WIA has dropped from 98 per cent to 68 percent. Moreover, WIA requires clients to go through a sequential series of services, starting with the "core" program a package of help with resume writing, job application skills, identification of work opportunities, job clubs, et cetera. If the job hunter does not succeed, she or he then is eligible for "intensive" services more of the same, but escalated a bit. Only after a number of weeks of failing to land a job again does the recipient have a right to apply for training and postsecondary educational funding. Further, in most states, this is "one-size-fits-all": at its start, applicants do not undergo any deep employability assessment that might lead to an earlier shift to the education track. The low numbers of trainees in the two programs, coupled with very heavy performance monitoring requirements and the payment schedule, has radically decreased community college participation, especially in TANF efforts. The other major effect of these tougher accountability measures in WIA has been "creaming", which means helping those that have the best chance to make it, not the neediest recipients.
The causes of these changes include the following. There has been a rightward shift in Republican philosophy and their dominance in Congress, as well as a very effective effort on the part of the Heritage Foundation, Charles Murray, and others to convince policymakers and the populace that low workforce attachment, illegitimacy and a culture of poverty are the real problems, not skills, the structure of opportunity, family stresses, a lack of financial assets, and discrimination.
Other non-Conservative sponsored research has taken its toll too. The negative findings of training evaluations, using random assignment have seemingly weakened the human capital case. In addition, the cost-benefit calculations that suggested that adult retraining does not pay a good societal return, especially relative to early childhood education and well-structured middle school interventions to build the "soft skills" of at-risk youth, along with their cognitive learning;, have not helped either.
The significant fall in the welfare caseloads, following the enactment and implementation of TANF, appears to say: "these folks could have worked before" and "these people should simply go to work this is the most direct way to leave poverty behind.
Implementation details have reinforced this shift as well. Social workers play a strong role in many states in steering WIA and TANF applicants toward "work first". The dampening effect on community college participation caused by tough and complicated accountability measures and reporting guidelines (with no extra money to cover such costs) does not help matters either.
The fall in the amount of available training dollars was also caused by the shift in monies to cover the establishment of one-stop shops for housing a range of workforce, job search, counseling, adult literacy, English instruction, safety net, and human services.
The authors are outraged by the "work first" coup, arguing that, while we are doing more to help the middle class to attend college, we're essentially saying that "the poorest among us deserve not education but palliatives." Second, the United States is being penny-wise and pound-foolish, as it lets "short-term results block long-term opportunities for the poor." (We pay less now, but more later. True, TANF rolls are down, but self-sufficiency has not advanced much, at all.) Third, the authors argue that the full record of expert advice and experience, case study research, and in-depth institutional assessments should be drawn on as well when reaching policy judgment. A small number of studies with the most objective data should not negate all other research. Moreover, they critique the random assignment studies on the basis of their superficial aggregation, compared to the scores of other studies (albeit without adequate "controls") that are richer in data that document success with TANF and WIA clientele. (This more nuanced case for their position still needs some bolstering.) Fourth, they remind us that there is a looming skill shortage facing America and an upgraded pool of the formerly poor could help to address it.
Finally, numerous studies have quantified the contribution of education (through its impact on human capital formation) to total economic growth. In reviewing these, Roland Sturm of the Rand Corporation concludes that "regardless of the particular calculation, education and its effect through labor quality are generally found to be among the most important contributors to economic growth.
Moreover, education's contribution to economic growth is increasing over time. Due to rapid advances in technology, ideas are increasingly being substituted for physical matter in the creation of economic value. In this environment, those enterprises that add value by increasing the "conceptual content of output" are the ones that generate higher returns for owners and pay higher wages to workers.
Is there a place in this new economy for the poor? Only if we don't give up and commit to act on the following big idea:
The long-term health of the American economy and the welfare of our society depend on our ability to invest in and draw upon the talents of and visions of all the people. Read the book.