Workfare Isn't Working, Advocates Insist To City

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Fernando Le’Bron has provided legal assistance to welfare recipients since the 1980s. Ever since welfare reform took hold in New York City a decade ago, he’s seen a steady increase in the percentage of his clients on public assistance who are unable to work because of a physical or mental disability or a substance abuse problem. This is in part a reflection of the city’s success in moving “work ready” people—those who do not have a physical or mental barrier to employment—off of welfare and into jobs. Viewed from this perspective, the city has had success in promoting greater self-sufficiency.

But the story of welfare reform hardly ends there. Le’Bron, a paralegal with the Queens Legal Services Corporation, says that though his clients nowadays have more complex needs than ever, they are at greater risk of being “sanctioned,” or punished through a reduction in benefits. The Human Resources Administration (HRA), the city agency that administers cash assistance, “has been very proficient in sanctioning people,” Le’Bron said. “They haven’t been so successful in helping them avoid sanctions in the first place.”

A recent report by the nonprofit group Community Voices Heard (CVH), a membership organization of low-income people, found that HRA’s efforts to place work-ready clients in sustainable jobs through the three-year-old Back to Work program has hit a wall. The report suggests that the high sanction rate and poor job placement and retention rates demonstrate that HRA needs to re-think the shape of its “work-first” approach to welfare. Coming at a time when work itself is harder to find than it used to be, some are paying attention.

“There’s a prevalent philosophy that people are better off not on welfare, since it encourages dependency,” said Vicky Lens, a professor at Columbia University’s School of Social Work. “Many [welfare clients] were working but lost their jobs, and the reasons are more complex” than HRA’s current approach is designed to address, Lens said.

In an interview last week, Deputy Executive Commissioners Seth Diamond, who heads HRA’s Family Independence Administration, and Barbara Brancaccio, who heads the agency’s press office, disputed CVH’s charges point-by-point. “The numbers they have aren’t accurate. It’s misleading,” Brancaccio said. “We understand the role of advocates in city government. But the assumption that it’s the intent of people in this agency for people to fail couldn’t be any further from the truth.”

CVH’s report, Missing the Mark, is the latest of several recent evaluations critical of HRA. A recent report by Public Advocate Betsy Gotbaum found that people faced a number of barriers in accessing HRA services, and an audit by Comptroller William Thompson found flaws in HRA contractor oversight.

“With a series of different reports by both government offices and NGOs, we hope there will be enough cumulative pressure to shine some light on this huge agency that serves the most disenfranchised,” said Sondra Youdelman, CVH executive director and one of the report's authors.

Diminishing returns

In the decade since welfare reform was implemented in New York state, HRA has significantly reduced the welfare rolls. As of last month, the number of New Yorkers receiving some form of cash assistance stood at 336,765—a 5 percent decrease from the same time a year ago and a 27 percent decrease since Bloomberg took office in 2002. HRA's website also points out that's the lowest number since 1963. Federal law requires welfare recipients to participate in “work activities” – which can include a job, job training, a job search or education activities – unless they are on disability or SSI, Supplemental Security Income.

Serving an average of 13,000 people in any given month, Back to Work is the largest HRA “workfare” program, and serves the people whom HRA Job Center staff determine to have no health and language barriers that would keep them from working. (The other two programs are Begin Employment, Gain Independence Now, or BEGIN, which provides basic skills and literacy instruction for clients who are not English proficient; and WeCare, which serves those with physical or mental barriers to employment.)

But the fact that HRA determined Back to Work’s client base to have no major health or language barriers to employment doesn’t mean that finding and keeping a job is going to be easy for them. CVH found that three-quarters of the nearly 1,000 clients it surveyed reported having a major obstacle to finding a job, such as unstable housing, difficulties finding childcare, and low levels of education.

Criticism of Back to Work generally breaks down into three objections: The program is not finding people sustainable jobs; vendors who are charged with actual service delivery are not helping people overcome the challenges that make it hard to turn their lives around; and people are being sanctioned out of the program well before it works for them.

A major contributor to these trends, CVH argued, is the performance-based focus of HRA's contracts with the seven vendors that operate the Back to Work centers—America Works, based in Brooklyn; Goodwill Industries, based in Queens; Arbor, based in Staten Island; and FEGS, N-PAC/Seedco, CEC and Wildcat, all based in Manhattan. The program is funded at $159.6 million over three years, and HRA’s contracts run through June 2009. The prospect of contract renewals – and the hope of affecting that upcoming process – is one reason CVH released its report last month.

The group maintains that only 8 percent of participants who begin the program are placed in jobs for a minimum of 30 days, versus the agency’s target of 13 percent, and only 2 percent hold these jobs for 180 days, versus HRA’s target of 5 percent. Of those referred to the program from Job Centers, CVH says that only 20 percent actually start the program, far below HRA’s projection of 52 percent. On top of this, CVH found that over half the people who were placed in jobs by Back to Work vendors ended up back in the program within nine months, which it saw as evidence that a work-first model that doesn’t emphasize career building won’t get people off welfare. (Being “in the program” means showing up for three days a week of work experience, like performing parks maintenance, and two days of in-class training; the goal is that these required weeks will lead to placement in a secretarial, technical or other job.)

“It is clear,” CVH researchers concluded, “that while HRA recognizes the high level of barriers to employment facing Back to Work clients, they have not shifted the model of services to reflect this reality. Instead, vendors are encouraged to quickly place participants in any job they can get.” CVH found that 75 percent of clients felt the program did not address the problems that made finding and holding a job difficult.

Some critics see this as the consequence of HRA’s intentional inaccessibility, complex requirements, and an approach that trivializes hardships. “HRA is not a welcoming bureaucracy. It’s in part meant to deter people from the rolls,” says Vicky Lens.

These trends appear to be compounded by a stagnant job market that has hit low-wage, low-skilled labor sectors hard. “In this frightening fiscal environment, there just aren’t going to be enough quality jobs to refer people to,” Youdelman said. “Now is the time to re-think the whole system, and how HRA is investing in its programs. The goal should be to get people trained and educated and launched on a career path, not a short-term fix.”

Not quite career planning

Back to Work was designed in the context of complex federal rules that specify how jurisdictions can spend Temporary Assistance for Needy Families (TANF) funds on welfare administration. The federal government requires states to place 50 percent of all cash assistance recipients in work-related activities or else face stiff penalties. Many of the things that would best serve those with barriers to employment – like help in locating housing, child care, or substance abuse and mental health treatment – are only considered “work activities” for a short period of time, according to federal rules.

“One of the very big problems is that the state doesn’t get any credit towards the required work participation rate for almost all the activities that make progress towards self-sufficiency,” said Elizabeth Lower-Basch, a senior policy analyst for the D.C.-based Center for Law and Social Policy, which analyzes policy affecting lower-income Americans.

A state can place up to 30 percent of its welfare caseload in education and job training programs that count toward the work participation rate, but CVH found that less than 2 percent of Back to Work clients are using these opportunities. Advocates are calling for HRA to allow welfare clients to pursue off-site vocational training programs that match their personal career goals—for example, using federal money to pay for an associate’s degree to become a carpenter, mechanic, or paralegal. “If you want people to get a career and not just a job, you have to make sure people are up-skilling their education with a high school diploma or associate's degree,” said Jeremy Reiss, director of workforce mobility initiatives at the Community Service Society.

HRA considers CVH’s numbers here, as in most places, misleading. According to Family Independence Administration chief Diamond, HRA staff at Job Centers determine whether people want to go into training activities full-time; if so, they’re referred to the agency’s Training Approval Group, which provides full-time vocational education for around 300 people a week (rather than Back to Work). He feels advocates place too much stock in full-time training and don’t see the value of a blended program. “Our primary focus is getting people into employment activities, and the best way to do this is to combine work and training into one single program,” Diamond said.

While part of HRA’s reticence regarding education and training is rooted in ideology, Diamond also sees an equity issue. “If a middle-class family can’t access education without working, is it fair for people on cash assistance to participate in the same services without working?” he asked.

The issue of underutilization of education capacity illustrates a larger tension. Advocates have long argued that Back to Work denies clients control over their own destinies. They feel clients are pressured to take the first job found by vendors, and if they don’t they’re likely to be sanctioned. In its report, CVH quoted a client, Anita Walton, who faulted Back to Work for interfering with the completion of her degree in secretarial studies. “If I hadn’t been constantly pressured to get a job instantly, attend programs like the Back to Work Program, do a WEP assignment, and constantly be sanctioned unjustly, I might be done with my degree by now and already be working in a good-paying job,” Walton told CVH researchers.

City policy makers have questioned whether HRA designed Back to Work to effect long-term life changes or just comply with federal guidelines. Brooklyn City Councilman Bill de Blasio, chair of the General Welfare Committee, which has legislative oversight of all HRA programs, has expressed concerns about HRA’s effectiveness in getting clients on the right path. “While I commend HRA for attempting to improve its job placement programs over the years, I think the data speaks for itself,” says de Blasio. “Until HRA provides people with real education and training opportunities that prepare them for living-wage jobs, we are just rearranging the deck chairs.”

Too quick to sanction?

Federal welfare guidelines also require cities and states to sanction welfare recipients who don’t comply with the work rules. This means if you’re late to a Back to Work meeting, or have a dispute with someone at a Job Center or vendor office, you may be issued a “failure to comply” notice, which is a precursor to a sanction.

Critics of HRA have long thought the agency’s sanctioning process exceeds legal standards. CVH's report states that 68 percent of Back to Work applicants, and 28 percent of recipients, received a “failure to comply” notice while in the program—and 60 percent of these were later found through administrative hearings to be in error. CVH pointed to these data to explain the low number of people referred to the program who actually engaged in it or remained connected.

Diamond stressed that HRA has worked very hard to streamline the appeals processes for sanctions and failures to comply. He didn’t specifically address the 60 percent error rate found by CVH, but did emphasize that linking this rate to data around engagement and job placement is based on faulty logic. Many of the people referred to the program didn’t ultimately participate since they were deemed ineligible for any number of reasons—not necessarily because they were sanctioned out of it, Diamond explained.

Vicky Lens believes the problem with the sanctioning process is both philosophical and procedural. “What happened here and elsewhere is that sanctions have become a punitive tool,” Lens said. Someone might be sanctioned if they miss a meeting in order to attend some other mandatory appointment with another city agency, like a housing court hearing. “It undermines the whole goal of welfare reform—to make people more self-sufficient. Instead it just makes their lives harder and achieving their goals less likely.”

Contracting complications

The CVH report suggests that the sanctioning process has a negative effect on Back to Work vendors’ ability to help clients. Vendors are supposed to help clients connect with what are called “transitional benefits” – things that help with covering rent, transportation and medical bills—but CVH found that their priorities may be elsewhere.

In its report, CVH quoted vendors (who remained anonymous to avoid compromising their organizations’ contracts with HRA) who suggested vendors’ role in the sanctions process consumed all else. “We have to spend a lot less time actually helping to get employment and providing clients with the case management they need to address barriers,” a vendor told CVH. “[I]nstead we have to spend time doing data entry and collecting time sheets and calling places to make sure absences are excused.”

In designing Back to Work, HRA provided the program’s vendors with a series of milestone incentives that encouraged the seven organizations to place people in long-term jobs, and gave them incentives for working with people who have been sanctioned.

Some outside observers, however, think these incentives are counterproductive. “The problem with performance-based contracts [that don’t provide a base rate for overhead costs] is that vendors often have to make a cost calculus in order to keep their own program running,” Youdelman said. “From their perspective, if I can get a good return by only working with a quarter of the people, then why don’t I just find those most ready to work and just push everyone else out” by getting them into the first available job, she explained – regardless of its quality or their interest in it, or by sanctioning them out of the program.

Barbara Zerzan, director of the Center for Benefits and Services at the Community Service Society and the former head of an HRA-contracted welfare-to-work vendor (not one of the current Back to Work group), believes that vendors generally don’t want to issue sanctions but find themselves with no other recourse. “These vendors are so stressed out, they’re dealing with so many people. If they see the first sign of someone not cooperating, they sanction,” Zerzan said.

Diamond argued that the assumption that HRA wants to sanction people is fundamentally counter-intuitive. The more people who are sanctioned by the agency, the greater risk HRA faces of failing to meet federal work placement guidelines. Diamond recognizes that there’s no specific measure for the sensitivity of case managers, but the emphasis on job retention makes case management essential. “To realize the goals of keeping people in jobs, vendors have to provide this help to get people to stick with it,” he said.

The next step

At this point, CVH calls for HRA to revise its contracting structure in a way that pays vendors for helping people get transitional benefits, make job placements more individually tailored and increase emphasis on education and training, address what it sees as an unfairness in the sanctioning process, and improve oversight and transparency.

It's not clear that the agency is interested in integrating CVH's critiques and suggestions. After HRA strongly criticized CVH’s last report, which focused on the WeCare program, CVH sought to partner with the agency on this report. CVH and HRA went back and forth for a number of months over a possible research partnership. HRA at first agreed in principle to participate, but then backed out when it deemed the researchers proposed by CVH would not be sufficiently unbiased.

HRA spokeswoman Brancaccio believes the agency’s critics don’t see the whole picture. “It’s old news to us. This is just another report with no real methodology,” she said. “We tried to work with them. Their numbers are not accurate. We can refute any of it.”

– Matt Schwarzfeld

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