A Public-Private Partnership To Hire Welfare Recipients
By Jennifer Petersen/AllPolitics
WASHINGTON (Aug. 12) -- States have gone their separate ways in establishing programs to assist welfare recipients move from the assistance rolls to the payrolls, but the national Welfare to Work Partnership is bridging differences between states with corporate cooperation in an effort to provide jobs for the nation's welfare recipients.
A year after welfare reform, with many of the nation's welfare and former welfare recipients still jobless, the Clinton Administration announced in the spring of 1997 that the Welfare to Work Partnership would combine federal and corporate efforts to provide jobs for many of those still on welfare.
The program, headed by Eli J. Segal, initially recruited 100 companies.
By 1998, the program had enlisted 5,000 companies to help hire welfare recipients. But with some of these companies only promising to hire one new employee off the welfare rolls, the number may look more impressive than it is.
President Bill Clinton said he was aiming for 10,000 companies to join the partnership. He also committed the federal government to hiring off the welfare rolls, setting a goal of 20,000 hires between the federal government and its contractors.
Businesses are attracted by the good public relations and the bottom-line benefits. The Welfare to Work Partnership says involvement in the program makes economic sense for companies and communities. The more people who have paying jobs, the partnership argues, the more people will be able to spend money and reinvest in the community's economic health.
But the federal subsidies don't hurt either. Companies who hire employees off the welfare rolls are eligible for federal wage subsidies and the Work Opportunity Tax Credit (WOTC), designed to encourage businesses to make jobs available to people on welfare, as well as any tax incentives in place at the state level.
It seems that the move has so far been good business. The New York Times reported in May 1998 that the new workers hired off of the welfare rolls are providing a pleasant surprise for their employers by staying with the companies longer than average employees.
The longevity of welfare hires was attributed in part to the work requirements of welfare reform. Welfare recipients are also eligible for a variety of benefits as they make the transition to working full-time. Programs such as child care, and continued eligibility to Medicaid and food stamp benefits are designed to make the transition easier and more successful, and may have the added benefit of making employees more likely to stay in one job longer.
For their part, many companies have aided the transition by offering "buddy system" training or internships in order to bolster skills and orient workers to their new environments.
The Welfare to Work Partnership, and its successes, began during a period of low employment and economic prosperity, leading critics to wonder whether the success will weather an economic downturn. The Welfare to Work Partnership reported that 71 percent of partnership employers say that their businesses or industry faces a labor shortage. Critics suggest that these shortages will not last forever, and that the last welfare hires will also be the first fires when the next economic slump hits.
The partnership was formed by top officers at United Airlines, Sprint Corporation, Burger King, Monsanto Company and United Parcel Service in response to Clinton's challenge to the private sector to initiate programs for hiring people off the welfare rolls.
Since its White House launch, the program has been touted as an example to business owners of the benefits of hiring people off welfare.