National Employment Law Project

Comments on TANF Reauthorization

Thank you for providing us this opportunity to comment on the reauthorization of the Temporary Assistance to Needy Families (TANF) program. The National Employment Law Project (NELP) is a non-profit research and advocacy organization specializing in workforce development and low-wage employment issues. NELP works closely with policy makers and community-based organizations to support programs focused on ensuring that a transition off of welfare is also a transition into a job that provides the financial security and personal dignity that every person deserves.

TANF’s Primary Goal Should be Moving Participants into Jobs that Lift them Out of Poverty

· Reducing Caseloads Has Not Meant Increasing Self-Sufficiency

Leaving welfare does not necessarily mean gaining adequate work. Five years of experience with the TANF program put in place in 1996 have shown that one cannot equate moving people off of welfare with moving them into stable employment, let alone employment that actually improves their family’s well-being. At any given time, about one-third of those who have left welfare are unemployed, and one third of those who are working are not working full-time.[1] Only 8% of welfare leavers have been able to sustain continuous employment over a period of four years.[2] And even in a significant number of families with a full-time worker, low wages mean skipped meals, forgone medical care, and inadequate child-care.[3]

These data were disturbing enough in an era of unprecedented economic growth, and they must be taken as a very stern warning of what we can expect in the much stormier waters that now surround us. The next phase of welfare reform must recognize these facts by orienting federal policy toward programs that successfully propel people toward jobs offering secure employment and opportunities for advancement rather than simply casting them adrift and wishing them well.

· Increased TANF Funding is Needed to Move Participants Into Adequate Jobs

Current levels of TANF funding have been insufficient to enable TANF participants to achieve real economic security through work. The drop in cash assistance caseloads does not mean that less money is needed. First, families that have moved into unsteady, low-wage jobs continue to need non-cash assistance -- such as transportation, child-care, and training -- that supports job retention and advancement. Second, those remaining on the rolls have more serious barriers to employment and thus require more intensive, and costly, services. Third, the roll reductions of the past five years came in the midst of a booming economy. With a recession now upon us, it will be harder for families receiving assistance to find work, and workers who lose jobs will increasingly turn to the TANF-funded safety net, as recent reports already have shown.[4] Moreover, by providing preventive assistance and non-cash work supports, TANF can play an important role in helping struggling low-wage workers keep their jobs rather than turn to welfare. More, not less, TANF funding is in order.

Work Activities Should Enhance Recipients’ Employability, Not Punish Them for Being Poor

· TANF Recipients Need Education, Training, and Programs that Overcome Barriers to Employment

Under the current definition of acceptable work activities, a monthly average of nearly 60% of TANF recipients nationwide were not engaged in work as of 1999. Given the strong emphasis on work-first, this clearly indicates that the definition of work activities is too narrow to address the needs of those with barriers to employment. Such barriers include poor health or disability, lack of a high school diploma, limited work experience, exposure to domestic violence, substance abuse, and limited English proficiency. According to the General Accounting Office, in order to move those with multiple barriers to employment into the workforce “states will need to provide work-preparation activities tailored to the needs of their hard-to-employ recipients.”[5] The definition of work activities should therefore be expanded to include vocational training without the current arbitrary 12 month limit, all levels of education, and participation in activities designed to address domestic or sexual violence, mental illness, substance abuse, or disability. NELP also recommends rescinding the 30% cap on the number of TANF recipients participating in educational activities that states are permitted to count towards their work participation rate.

· The Civil and Worker Rights of All Participants in Work Activities Should Be Protected Vigorously

Any TANF legislation must include stepped up efforts to ensure compliance with important civil rights and workplace protections. Like all low-wage workers, but especially those in the most vulnerable jobs, it is critically important that their rights to basic employment protections are vigorously monitored and enforced.

Unpaid Work Experience Should Not Be Forced On States That Prefer More Successful Approaches

We note our grave concern over the proposals from some quarters that New York City’s experiment with across-the-board, unpaid work experience, or “workfare,” be transformed into a national mandate.

· Unpaid Work Experience Does Not Help Participants Achieve Self-Sufficiency

In working closely with Community Voices Heard, a New York-based membership organization representing workfare participants, we have seen the results of workfare firsthand.[6] Simply put, the City program has been implemented in a way that uses dead-end work as a means to push people off the rolls by making public assistance less attractive, and by sanctioning those tripped up by bureaucratic red tape,[7] but without making any serious attempt to improve welfare recipients’ prospects in the private labor market. Pre-TANF research showed that such programs were ineffective at improving the quality of jobs that participants found[8], and there is no evidence that more recent programs have done any better. Under these circumstances, there is no cause to mandate, or even promote, unpaid work experience when TANF is reauthorized. States currently have the flexibility to choose to implement work experience, and there is no cause to make TANF more rigid in this respect.

· Unpaid Work Experience Undermines Workers In Regular Employment

Not only does unpaid work experience fail to help those participating in it, but it also threatens those already employed in stable, relatively well-paying public employment. By using workfare workers to provide important public services that would otherwise be delivered through the state and local workforce, unpaid work experience poses a serious danger of displacing workers in good jobs, as has been well-documented to have occurred in New York City.[9] With a recession putting increased strain on state and local budgets, more protections are needed to ensure that strapped state and local governments are not tempted into using federal TANF dollars as a way to shrink their payrolls.

Transitional, Wage-Paying Jobs Programs Should be Maintained & Promoted

· The States Are Increasingly Turning to Transitional Jobs Programs and Having Great Success

There is a work-centered approach that shows more promise for those with barriers to employment than unpaid work experience. Publicly-funded jobs programs make a real, wage-paying job – where the employee has the rights, responsibilities, and remuneration of any other worker – the core of a transitional program that integrates real-world job experience with training during the work-week.[10] States as different as Vermont, Pennsylvania, and Washington, to name just a few, have been implementing these programs,[11] largely with funds made available through grants from the Welfare-to-Work program.[12] Evaluations of these programs, like Washington State’s Community Jobs program, have demonstrated effectiveness in raising participants’ earning capacity and placing them into unsubsidized employment. After leaving Washington’s program, for instance, participants had annual earnings nearly 20% greater than other participants in the state’s WorkFirst programs.[13]

Moreover, transitional jobs programs like the one recently legislated by the New York City Council possess two of the characteristics that the National Evaluation of Welfare-to-Work Strategies has identified as ingredients in a successful program: (1) integrating a focus on rapid placement into jobs with the provision of education and training to upgrade skills, and (2) making sure that participants’ first placement is into a good job, not just any job.[14] We urge the Department to take seriously the results of the national evaluation that it commissioned, and take note of its finding that a strict “work-first” approach leaves welfare recipients no better off than if they had been left to their own devices.[15] In order to continue these successful jobs initiatives, the Administration should support efforts to maintain and expand funding for these programs to operate at the state and local levels

TANF Should Be Part of the Social Safety Net That Protects All American Workers In Hard Times

· Support Unemployment Insurance Reforms That Protect Those Who Have Recently Left Welfare

At a time when low-wage workers are already being battered by the recession, it is critical to keep in mind that people who leave welfare for work at best find themselves in the same rocky boat as other low-wage workers.[16] Low-wage workers are often the first fired when layoffs occur, placing a premium on their ability to access the UI system. Yet, because of the eligibility rules in most states, low-wage and women workers often have the hardest time collecting benefits. For instance, 60% of unemployed American workers are not collecting unemployment insurance benefits because of out-dated restrictions, restrictions that are especially likely to affect recent entrants into the workforce.[17] Thus, as part of TANF reauthorization, we urge the Administration to support proposals that seek to reward the states that have adopted UI systems that are adequately equipped to meet the needs of people leaving welfare.

· Modify Time Limits In Light of Rising Unemployment

For those who’ve left welfare, lost their jobs, and are ineligible for unemployment insurance, TANF is their only option. TANF time limits, however, threaten to leave unemployed workers without the protection of either unemployment insurance or welfare. Similarly, when people with solid work histories are losing their jobs in droves, it is unreasonable to expect people with multiple barriers to employment to be finding work. Time limits should be suspended during times of recession and high unemployment. Moreover, persons doing their best to move toward self-supporting employment should not be limited in their ability to access TANF, the safety net of last resort. NELP supports the Mink bill’s (H.R. 3113) “compliance stops the clock” language and the bill’s suspension of time limits during periods of high state unemployment.

· Restore Coverage for Legal Immigrants

NELP strongly supports restoring the safety net for recent legal immigrants, who may need a helping hand upon their arrival in this country, in order to fully integrate themselves into the American workforce. The Mink bill removes all barriers to legal immigrants’ access to TANF, including waiting periods and deeming requirements.

Thank you for considering these comments.

[1] Pamela Loprest, 1999, Families Who Left Welfare: Who Are They and How Are They Doing? Washington D.C.: The Urban Institute (available on-line at http://newfederalism.urban.org/html/discussion99-02.html); Pamela Loprest, April 2001, How Are Families That Left Welfare Doing? A Comparison of Early and Recent Welfare Leavers, Washington D.C.: The Urban Institute (available on-line at http://newfederalism.urban.org/html/series_b/b36/b36.html).

[2] National Evaluation of Welfare-to-Work Strategies: The Experiences of Welfare Recipients Who Find Job, 2000, U.S. Department of Health and Human Services, Administration for Children and Families, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Education, Office of the Under Secretary, Office of Vocational and Adult Education, prepared by Karin Martinson (available on-line at http://www.mdrc.org/Reports2001/NEWWS_PE_Experiences/NEWWS-PE-Experiences.htm).

[3] Loprest, How Are Families That Left Welfare Doing?; Boushey, Heather and Bethney Gundersen, 2001, When Work Just Isn't Enough: Measuring hardships faced by families after moving from welfare to work, Washington, D.C.: The Economic Policy Institute (available on-line at http://www.epinet.org/briefingpapers/hardshipsbp.pdf).

[4] Jennifer Paynter, “States Cut Back on Transition to Work Aid As Caseloads Rise,” Employment & Training Report, Vol. 33, No. 11, November 12, 2001.

[5] Welfare Reform: Progress in Meeting Work-Focused TANF Goals, Testimony of Cynthia M. Fagnoni before the Subcommittee on Human Resources, Committee on Ways and Means, House of Representatives, Washington, D.C.: General Accounting Office, GAO-01-522T, p. 8.

[6] Laura Wernick, et al., 2000, The Work Experience Program (WEP): New York City’s Public Sector Sweat Shop Economy, New York City: Community Voice Heard (available on-line at http://www.cvhaction.org/Publications.html).

[7] Jason Turner, Testimony Before the Subcommittee on Human Resources of the House Committee on Ways and Means, Hearing on Welfare Reform and Work, April 3, 2001. (available on-line at http://waysandmeans.house.gov/humres/107cong/4-3-01/4-3turn.htm) (noting that work experience achieves caseload reductions primarily by pressuring public assistance recipients to close their cases and that the programs lead to sanctions about as often as they lead to work experience).; Wernick, The Work Experience Program (WEP).

[8] Thomas Brock, David Butler, and David Long, 1993, Unpaid Work Experience for Welfare Recipients: Findings and Lessons from MDRC Research, New York: Manpower Development Research Corporation.

[9] Maurice Emsellem, 2001, Testimony Before the Subcommittee on Human Resources of the House Committee on Ways and Means, Hearing on Welfare Reform and Work, April 3, 2001 (available on-line at http://www.nelp.org/pub68.pdf).

[10] Clifford Johnson, 1999, Publicly-Funded Jobs For Hard-to-Employ Welfare Recipients, Washington: Center on Budget and Policy Priorities (available on-line at http://www.cbpp.org/714wtw.htm).

[11] Johnson, Publicly-Funded Jobs For Hard-to-Employ Welfare Recipients.

[12] Clifford M. Johnson and Lana Kim, 1999, Competitive Welfare-to-Work Grantees Utilize Publicly-Funded, Transitional Jobs to Aid Hard-to-Employ Welfare Recipients , Washington, D.C: Center on Budget and Policy Priorities (available on-line at http://www.cbpp.org/9-17-99wtw.htm).

[13] Annette Case, et al., 2000, Community Jobs Outcomes Assessment and Program Evaluation, Seattle: Economic Opportunity Institute (available on-line at http://www.econop.org/CJReport2000-ExecutiveSummary.htm).

[14] National Evaluation of Welfare-to-Work Strategies: How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs (Executive Summary), 2001, U.S. Department of Health and Human Services, Administration for Children and Families, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Education, Office of the Under Secretary, Office of Vocational and Adult Education, Prepared by Gayle Hamilton, et al. (available on-line at http://www.mdrc.org/Reports2001/NEWWS_FinalReport/NEWWS_FinalReport_ES.htm).

[15] How Effective Are Different Welfare-to-Work Approaches?

[16] Boushey & Gunderson. When Work Just Isn't Enough; Loprest, How Are Families That Left Welfare Doing?.

[17] Preparing for Recession in the States: Strengthen the Unemployment Insurance System, November 2001, New York: National Employment Law Project (available on-line at http://www.nelp.org/pub91.pdf).