Nudging Welfare Recipients Reforms Intended To Encourage Work Earn Mixed Reviews

As welfare reforms kick in this week, Inland Northwest employers will begin to notice some impacts. In the Spokane area, for example, some 10,000 welfare recipients are required to find jobs or lose their benefits.

Under the slogan, “Any job is a good one,” Washington’s WorkFirst program for the first time will shift most job training for welfare recipients from classrooms to factories and offices, a plan that has some business leaders concerned.

“I’m afraid we’re headed toward disappointment,” says Rich Hadley, president of the 2,200-member Spokane Area Chamber of Commerce. “If we have people searching for a job, who don’t have adequate education and training, how are they going to be able to earn more than minimum wage?

“And how are we going to present this to business owners in a way that doesn’t confuse and anger them?” adds Hadley, who has been meeting weekly with state officials who are implementing WorkFirst.

Signed into law just two months ago, Washington officials have barely had time to organize WorkFirst, let alone explain to the public how it will work.

Idaho’s tough, new Temporary Assistance for Families was adopted earlier, but has raised concerns that it too easily disqualified participants.

Reform was mandated by Congress last year to end an entitlement to public assistance.

Idaho’s TAF’s begins Tuesday, the same day that the first phase of Washington’s WorkFirst begins.

The reforms, if successful, could benefit employers and taxpayers in some ways, economists say.

For one, the appearance of thousands of additional job seekers may push the unemployment rate up - and wages down - as greater numbers of people chase the same jobs.

That may ease the already tight labor market and postpone pressure on employers to offer higher wages to attract enough workers, says economist Dennis Fusco, with the state Department of Employment Security. This could save business owners and consumers money, since manufacturers typically pay for higher wages by raising prices on their goods.

For another, nudging welfare recipients into the job market may reduce the $2.5 million that taxpayers spend monthly on public assistance grants in Spokane County. As participants leave the welfare rolls for higher-paying jobs, they may have more money to spend on cars, household furnishings, toys and other items that boost store sales and sales tax rolls.

“For the first time in many years, working will make sense if you’re on welfare,” says Don Ott, Spokane area administrator for Employment Security.

In Spokane County, about 7,000 single-parent households, and 1,200 two-parent households, receive some type of federal assistance, Ott says. In Idaho, there are 20,000 people statewide getting benefits.

Beginning Aug. 1, new applicants for public assistance in Washington will enter the WorkFirst program, triggering the clock on the amount of time they can draw benefits.

WorkFirst participants can receive cash assistance for up to five years, but must engage in a rigorous, state-supervised job search program. In Idaho, participants are given just two years of benefits.

If a welfare recipient can’t find a job in four weeks, case workers at the Washington Department of Social and Health Services will assess the participant’s needs and help organize a plan for getting work.

For some, that will mean short-term vocational training; for others, placement in a job where wages are subsidized by taxpayers. The remainder may have to complete unpaid community service.

“The best way to succeed in the labor market is to join it,” according to WorkFirst literature. “Participants are expected to accept the first available job.”

Steven Dammeier, production manager for Western Systems & Fabrication Inc. in the Valley, dreads the prospect of long lines of WorkFirsters coming through his factory.

“I hate it when people are shining me on just because they need to tell the state that they’ve been out looking for work,” says Dammeier, whose company builds and refurbishes steel garbage bins for cities and private industry. “I don’t have time for that.”

But Dammeier made an exception earlier this year when Frank Polito of Employment Security called to offer an employee who would cost the company $2 per hour less than other workers.

Polito was in charge of a WorkFirst pilot program that subsidized wages of people on welfare who needed on-the-job training to re-enter the job market. The wage subsidy would run three months.

Polito, an employment and training specialist, sent James Nelson of Spokane to Dammeier and Western Systems. Nelson, whose wife and baby boy were surviving on food stamps and cash assistance, seemed eager to work and Dammeier agreed to the experiment.

With minimal training, Nelson became Western Systems’s sandblaster and was given a raise to $8 an hour - enough to break free from all assistance except food stamps.

“I found a home here,” Nelson says of his new job.

Because of the speed with which WorkFirst has been organized, not all job seekers will be as warmly embraced by prospective employers. Many business owners are oblivious to the details of the program and don’t have time to figure it out.

“We’ve had a welfare system 60 years in this country, and now we’ve got 90 days to change it,” says the chamber’s Hadley. “You couldn’t find a corporation in this country that would try that.”

Hadley says employers need to be part of welfare reform for WorkFirst to succeed, not the final step in a participant’s job search. Business owners can help because they know where the jobs are and what kind of training will be needed for current and future employment, he says.

In an unusual intersecting of social services, government and business, Catholic Charities is seeking a grant to hire a full-time, private WorkFirst coordinator to help the needy find work. But the coordinator would work out of the chamber’s office.

“We’ve got to be willing to do things differently,” Hadley says.

Some employers are anxious for WorkFirst to send a parade of applicants at a time when good workers are in short supply.

“We’re excited about this,” says Sandie Rolphe, office administrator for Coeur d’Alene-based Hatter Investments, which operates a dozen Burger King restaurants in Spokane and North Idaho. “You never know where you’ll come up with some really good people.”

But Tom Droz, manager of Manpower Inc. in Spokane, argues that it will take more than “any job” to move people off of public assistance and into a career that pays a livable wage. Employers shy from people on welfare, he says, unless they can demonstrate a solid work history and job skills.

“Unskilled work is becoming scarcer and scarcer,” says Droz, whose company trains and places workers for a fee. “If you’re matching parts in a warehouse and you can’t read, you’re sunk. If you’re suppose to produce a letter and can’t type, forget it.”

The Chamber of Commerce estimates that only half of the WorkFirst participants will be in a position to work. The rest may never get completely off welfare because of disabilities, dependents or other reasons.

The majority of those who can work, Hadley says, need a high school diploma or vocational training. Single parents need help with child care and commuters need a ride to work.

“They’ve got two problems: child care and skills,” Hadley says. “Everybody assumes that anyone who is on welfare can go to work, but they can’t.”

So how the state manages these problems in the months ahead may determine the success of WorkFirst. It also may determine its favor among workers and whether employers are willing to hire them.

“Is the market ‘man’s best friend,’ or not?” Droz says. “I guess we’ll soon find out.”

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