Pioneer Plan Gets Folks off Welfare
Milwaukee welfare-to-work program wins praise from liberals and conservatives
MILWAUKEE — FOR former recipients of welfare such as Linda Wilson -- the sole breadwinner for her seven children and disabled husband -- the loss of a job often starts a steady slide back into poverty.
But after a recent layoff, Mrs. Wilson is back among the employed. Thanks to a unique Milwaukee welfare-to-work program that provides an unusually large pay subsidy, Wilson started work this month as a nurse's aide.''
''New Hope gave me a push to get a job and that's what's good about it. I needed a push and some guidance,'' Wilson says.
The New Hope Project aims to help people such as Wilson kick their dependence on public aid and attain steady employment.
In an era of sweeping federal and state welfare reforms, New Hope has won kudos from across the political spectrum for finding the middle ground between traditional government welfare programs and more miserly welfare-to-work initiatives of other states.
The program gives welfare recipients a financial incentive to get off the dole. Often people stay on welfare because minimum-wage jobs provide less income than welfare paychecks and benefits.
New Hope boosts working participants' take-home pay with a subsidy. It also pays most day-care and health-care insurance costs and gives counseling on how to get a job. Unlike some welfare-reform efforts, the emphasis is on getting people a job, rather than just off the welfare rolls.
If Wilson, for example, had gone from welfare to a full-time, minimum-wage job, her annual income wouldn't exceed $9,000. Although she declined to disclose her income on welfare, she says her income on New Hope ''has increased dramatically.''
New Hope runs into some opposition from critics who see it as an expensive cure. But for the most part, experts are ''unanimously enthusiastic about New Hope, because it adds genuine knowledge about welfare that we haven't had after years of experimentation,'' says Gary Burtless, an economist at the Brookings Institution in Washington.
Conservative lawmakers who reject New Hope as too costly should heed its lessons, says Lawrence Mead, a visiting professor of public policy at Princeton University in N.J.
''I don't think any serious conservative [welfare] reformer can ignore New Hope,'' Mr. Mead says.
New Hope is founded on two simple notions: A job is the best way out of public aid, and many welfare recipients -- given the right incentives -- will choose self-reliance over handouts.
''There are people who want to work but need some financial support to make it feasible,'' says Sharon Schulz, executive director of New Hope.
Wilson and other New Hope participants must work a minimum of 30 hours a week or, if unemployed, conduct an eight-week job search with the help of program counselors. If the search fails, New Hope will suggest a community-service job requiring at least 30 hours of work per week.
In return, participants receive low-cost health insurance, child care, and a wage subsidy ensuring that their incomes exceed the poverty line. The government draws the poverty line at $15,150 annual income for a family of four.
The subsidy is designed to counter a tendency of some welfare recipients to spurn work because extra income earned makes them ineligible for aid.
Since May 1992, New Hope has achieved mixed results. Better than half -- 133 out of 215 -- of the current participants have found full-time jobs. Of the remainder, 11 are employed part-time, 40 are searching for work, and 31 are ''inactive,'' or have failed to contact counselors for more than a month. The program will grow to some 600 participants, says Julie Kerksick at New Hope.
Beyond helping Milwaukee's unemployed, New Hope may provide welfare officials guidelines on the percentage of welfare recipients who will embrace welfare-to-work programs, experts say.
It may also help welfare-reform minded lawmakers find the complex formula for the most effective wage subsidy, experts say. Republican welfare-to-work plans also feature subsidized wages and high levels of mandatory work, Mead notes.
''There is a whole lot of interest in New Hope among Republicans even though they might not accept the social analysis underlying the program and the idea of guaranteeing a job,'' Mead says.
The program also appeals to right-of-center policymakers because it overturns the way welfare is now managed. Welfare officials currently seek primarily to confirm eligibility and dole out benefits; New Hope staff gauge their performance by the numbers of new jobs and levels of self-sufficiency.
''It is a different orientation from typical social workers in public aid offices where their goal is to provide financial support to the families,'' according to Burtless.
Although facets of New Hope win universal praise, some conservatives object to the high cost of subsidizing wages.
Programs providing public-service jobs generally cost more than traditional programs in which the needy receive just welfare checks. New Hope has had to rely far more than anticipated on community-service jobs, Schulz says.
The drawback might help explain why Wisconsin Gov. Tommy Thompson (R), who has tended to be ambivalent toward New Hope, scratched the project from the proposed state budget on Feb. 14. (State funds are a small fraction of New Hope's budget.)
Despite the governor's qualms, the program enjoys strong support from Milwaukee businesses.
That support springs largely from the tradition of progressivism in Wisconsin, where ''even convservatives believe in government and even liberals believe in civic virtue,'' Mead says. The absence of such attitudes elsewhere might complicate the expansion of projects like New Hope, he says.