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8-23-06

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Welfare reform 10 years later: Time to face W2’s shortcomings

by Charity Eleson, executive director, Wisconsin Council on Children and Families
Long before former President Clinton declared that he would "end welfare as we know it," leading to the creation of the nation’s welfare reform law, Temporary Assistance for Needy Families (TANF), Wisconsin officials had been experimenting with different ways of moving welfare recipients into jobs.

Wisconsin’s welfare reform efforts, which led to the creation of Wisconsin Works (W-2), greatly influenced changes at the national level, and it’s fair to say that TANF, which marks its 10th anniversary on August 22, is due in large part to what went on right here at home.

The most dramatic development since TANF passage, and indeed before that in Wisconsin, is that thousands of individuals left welfare. In July of this year, fewer than 7,200 families were receiving W-2 cash assistance, which is only about one tenth of the comparable caseload in 1991. Pointing to this caseload reduction, some have labeled the reforms an unqualified success.

They argue that people have moved into the workforce and remained there, providing for their families and even gaining self-sufficiency. However, recent data suggest a much murkier picture and point to: increasing numbers of W-2 participants losing their jobs and moving back to the program; a majority of participants obtaining jobs that are low-skilled and low wage, keeping them mired in poverty; and a significant percentage of participants working for temporary employment agencies.

These outcomes suggest that W-2 is due for a change. The package of services offered to the poor working adults on the program undoubtedly reduced the caseload, but achieved far less success in helping poor families escape poverty.

The most significant challenge as TANF and W-2 move into their second decade will be to face these shortcomings head on. Rapid attachment of low-skilled individuals into low-quality jobs will not, by itself, serve families, employers or taxpayers well.

We need to retool W-2 so it functions as an effective workforce development tool by helping employers get the skilled workers they need and helping families get the job skills and job opportunities they need to lead them out of poverty.

For many W-2 participants, and for a much larger population in our state with similarly low skills and education levels, education and training options that are well designed and relevant to the labor market represent the best option for moving out of poverty and toward self-sufficiency.

The education credentials and skill levels that research overwhelmingly shows to be effective in raising employment numbers and wage levels amount to roughly a year of postsecondary education and a post-GED credential. In other words, completion of a technical diploma or certificate program in a field in which those skills are in high-demand. This level of skills also appears to match what many of the family-supporting jobs in today’s economy require.

The reality is, however, that many W-2 participants and others are not prepared to enter this level of educational programming.

Our challenge is to learn from other states’ experience in weaving together Adult Basic Education (ABE) with vocational and technical training to produce better results for low-skilled, low-income adults who, with the right mix of remedial, basic skills and job skills training can compete successfully for higher paid jobs in the workforce.

A number of states have taken great strides in improving the effectiveness of their ABE offerings by: (1) making the coursework relevant to actual in-demand jobs (contextualizing); (2) helping students to make the transition from ABE to certificate and technical diploma programs that appear to make such a significant difference in employment and wages; and (3) offering enhanced support services at the technical colleges for these students as they balance the many obligations of family, work, and schooling. This package of reforms could significantly improve the employment and wage outcomes for low-skilled workers.

Wisconsin’s welfare reform activities clearly helped shape the nation’s landmark TANF legislation a decade ago, leading to thousands of men, women and children leaving welfare. Now, a decade later, it’s time for Wisconsin to lead again, but this time with innovations that produce better outcomes for families, employers and taxpayers.

Charity Eleson is the executive director of the Wisconsin Council on Children and Families, a statewide nonpartisan, nonprofit, child advocacy organization.


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