Work support programs complement the efforts of
welfare and workforce development agencies to move low-income individuals
into jobs. These federal, state, and local programs encourage employment,
promote job retention, and help working families make ends meet by
addressing workplace issues, assisting with work and family needs, and
increasing family income. Some stakeholders are more inclusive than others
when defining what constitutes a work support. Examples of work supports
include the Earned Income Tax Credit (EITC), food stamps, child care
subsidies, transportation assistance, paid leave benefits, Medicaid, the
State Children’s Health Insurance Program (SCHIP), and earnings
supplements such as earned income disregards and cash payments to working
families.
The public sector has been expanding work support
programs since the mid-1980s. EITC expansions, for example, have made the
tax credit a pivotal work support because of its antipoverty and work
incentive effects. Work supports received a significant boost from the 1996
welfare reform legislation that allows states and localities to use
Temporary Assistance for Needy Families (TANF) funds to assist low-income
working families. Under the new farm bill, states may improve eligible
working families’ access to food stamps. State budget shortfalls, however,
are threatening some of the progress that has been made in making work
supports available to low-income working families.
Despite the growth of work support programs,
low-income working families face challenges in accessing assistance. This Issue
Note explores the access issue and describes strategies to help
low-income working families access work supports notwithstanding current
fiscal constraints. For more information, visit the Welfare Information
Network (WIN) web page on Work Supports at http://www.financeproject.org/workforce_worksupports.asp.For more information on the various work support programs, visit the
WIN web site at http://www.welfareinfo.org/.Also visit the Making Wages Work web site, which focuses on work
supports that supplement wages and income, at http://www.makingwageswork.org/.
Policy and Program Issues
How can work
supports help welfare and workforce development agencies meet policy and
program goals?
Welfare and workforce development agencies aim to move clients into
employment, and job retention is an essential outcome. Work supports
encourage employment and promote job retention, because they provide
incentives for people to take jobs and help stabilize family income as
families move from welfare or unemployment into work. Work supports help
keep earnings from being completely offset by lost benefits and thus change
the income calculus for entry-level work. By helping to address certain
employment barriers, work supports make it easier for clients to stay
employed, a critical first step toward achieving self-sufficiency.
Research indicates that families that use
transitional support services such as food stamps, child care subsidies, and
help with expenses are less likely to return to welfare. By providing work
supports to low-income families that have not received cash assistance,
welfare agencies may be able to help these families stay off the rolls.
Increasing family income, which agencies can accomplish through work
supports and earnings supplements, can improve family and child outcomes as
well as increase employment and job retention rates.
Connecting clients to work supports is important to
workforce development agencies and one-stop career centers, which serve
welfare recipients, the working poor, and other low-income working families
with multiple needs. The Workforce Investment Act authorizes the provision
of supportive services to assist clients receiving employment and training
services.
Programs that encourage work can be more
cost-effective ways to reduce poverty than programs that keep clients
dependent on public assistance. According to Sawhill and Thomas, a dollar
spent on a work support program can generate more than a dollar of income if
the program can elicit a sufficiently large labor supply response from
recipients. As clients receive more earnings through work, they generate tax
revenue and draw down less in benefits. For more information, see Isabel
Sawhill and Adam Thomas, A Hand Up for
the Bottom Third: Toward a New Agenda for Low-Income Working Families
(Washington, D.C.: Brookings Institution, May 2001), at
What benefits
can work supports provide to low-income working families and employers?
Characteristics of the low-wage labor market often make it difficult for
working families to sustain employment and make ends meet. Low-wage jobs are
more likely than higher wage jobs to lack flexibility, job-related benefits,
and paid sick or vacation leave, and they are more likely to include
nonstandard hours. Earnings from low-wage jobs frequently are insufficient
to lift families out of poverty. For these reasons, low-wage workers can
find it hard to meet family and work-related needs and expenses. Employers
of low-wage workers may face costs in employee retention and productivity
associated with absenteeism, late attendance, work disruption, and high
turnover.
Work supports, by encouraging employment, supporting
job retention, and helping families make ends meet, benefit working families
and their employers. Work supports help families with work-related expenses
such as child care and with family needs such as health insurance. These
supports reduce costs for families and can increase family income. Increased
family income is linked to improved family and child well-being. Work
supports can even help workers take advantage of job training opportunities
available through an employer.
Work supports can help reduce turnover costs and
improve employee productivity. Many employers cannot meet all the support
services needs of their low-wage employees. It can be particularly difficult
for small businesses to provide benefits to their low-wage workers. By
helping connect workers to available supports, employers can take advantage
of public and community programs to meet workforce needs. Employers who
actively promote, and even help fund, work supports may enjoy greater
employee loyalty and a more positive public image. Work supports can help
level the playing field for small businesses by making benefits that a
business could not otherwise afford to provide available to low-wage
workers.
What barriers
do low-income working families face in accessing and using work supports?
Despite the benefits work supports provide, participation among low-income
working families in some work support programs is low. Working families face
several barriers in accessing work supports. These barriers vary by state
and locality and by the type of support. An overarching problem is that
delivery systems often are not designed to serve parents in the workforce,
even as human services agencies have been serving more working families.
Major barriers to accessing work supports include a lack of awareness,
burdensome application and recertification processes, a fragmented service
delivery system, and limited service capacity.
A lack of awareness. Eligible families often do not know they are
eligible for work supports or do not know how to apply for these supports.
With the delinking of TANF cash assistance from other benefit programs, TANF
leavers may not know they remain eligible for some benefits, and caseworkers
may not always inform leavers about continuing eligibility. Families that
have not had contact with the welfare system may believe that support
programs are only for welfare recipients.
Burdensome application and recertification processes.
Complex application forms, varying eligibility requirements, and frequent
recertifications make it difficult for working families to take advantage of
some work support programs. Application and recertification processes that
require in-office visits during work hours pose yet another challenge for
working parents.
A fragmented service delivery system.
Different federal, state, and local agencies provide work supports, and no
single agency is responsible for ensuring low-income working families can
learn about and access supports. This fragmentation, along with the
delinking of benefits, increases the opportunity costs of applying for work
supports.
Limited service capacity. Potential work supports such as child care
subsidies and transportation assistance are undercut by limited service
capacity in some areas. For example, evening child care may not be available
or a public transportation system may not bring low-income workers to areas
where jobs are located.
What strategies
can the public sector use to facilitate access to work supports?
State and local welfare reform efforts are focusing greater attention on the
needs of low-income working families and are developing innovative
strategies to serve these families. Diverse strategies are needed to help
families access and use work supports, from conducting more intensive
outreach to building service capacity. Yet the current state fiscal crisis
is threatening services to low-income working families.
The state budget situation is shaping decisions about
expanding access to and eligibility for particular work support programs.
Work supports, however, are key tools for helping welfare and workforce
development agencies meet policy and program goals. In times of tight
budgets, states and localities can still help ensure access to work supports
with these strategies.
Offer work support programs that are largely federally funded, such
as the federal EITC and food stamps. An added benefit of this strategy is it
brings federal dollars to states and local communities.
Take advantage of any funding flexibility to leverage resources or
combine funds to serve low-income working families.
Look to nontraditional sources of support, such as employers,
foundations, and demonstration grants.
Develop public-private partnerships to support employment and job
retention. These partnerships can leverage employer influence, commitment,
and even resources to bring work supports such as transportation assistance
and employee assistance programs to low-income workers.
Target resources to assist families at critical support points,
such as during the first six months of employment or in the midst of an
emergency that threatens job retention.
Emphasize outcomes and program accountability to get the most from
limited resources.
Improve administrative efficiency.
Given the value of work supports in promoting
employment and job retention, public agencies can use the following strategies
to help low-income working families take advantage of available work supports.
Increase outreach. Promote work supports at locations where
families congregate, such as schools, health centers, and community sites.
Mainstream media campaigns can also promote work support programs. Use
outreach materials to convey the message that work support programs help
working families. Inform TANF clients early and often about work supports
and ensure caseworkers are trained to inform TANF leavers about continuing
eligibility.
Simplify application and recertification processes.
States and localities can take several steps to simplify these processes,
some of which may save costs and improve administrative efficiency. These
steps include creating shorter application and renewal forms, extending the
time between eligibility reviews, establishing a single application process
for as many benefits as possible, using automated sources of data to verify
eligibility, and exploring options to align eligibility requirements.
Improve access for working families.
Working families face many time constraints, so steps such as limiting the
number of required in-office visits, offering evening and weekend hours,
allowing forms to be mailed, and providing information by phone and online
afford working families easier access to the service delivery system.
Agencies can also outstation staff at one-stop career centers and other
sites in the community.
Partner with community-based organizations (CBOs) and employers.
Partnerships can further outreach efforts, leverage funds for work supports,
and support the development of new work support initiatives. CBO staff can
prescreen clients, help with enrollment, and provide program information.
Leverage resources to build service capacity.
Agencies can use resources strategically to build capacity in the service
delivery system. For example, to increase the number of evening child care
slots, agencies can offer enhanced payments to providers offering this
service.
How can public
agencies work with employers to provide work supports to low-income workers?
Working with employers offers a valuable opportunity to reach low-income
workers, including workers who have made the transition from welfare to
work. Work supports benefit workers and their employers, so public agencies
can make a sound economic argument for partnering on work supports. To
connect with employers, agencies may find it helpful to work with state and
local chambers of commerce and the one-stop career center system. Providing
information that is easy to use and understand is critical when working with
employers. Public agencies can work with employers in these ways.
Disseminate information on work supports by providing employers
with outreach materials such as flyers and brochures that are easy to
distribute. Agency staff can also come to the work site to present
information on work supports to workers and supervisors.
Help employees access work supports by taking applications at the
work site or persuading employers to give workers leave to fulfill
application requirements.
Develop partnerships that bring together stakeholders¾employers,
the public sector, and community-based providers¾to
address issues such as transportation and child care.
Provide incentives for offering work-based supports. For example,
tax-based incentives could be used to encourage employers to offer work
supports such as paid leave. Public recognition is also an incentive for
employers who already provide work-based benefits to their low-wage workers
to continue doing so.
Fund or share the costs of work supports. Agencies can approach
employers to fund support services, especially if there is a return on the
investment for the employer in terms of job retention and increased
productivity. The public sector and employers can also share the costs of
providing a work support. For example, the Wayne County, Michigan,
HealthChoice program offers affordable health care coverage for county-based
businesses and their employees. The employer, the employee, and the program
each pay one third of the premium cost.
Research Findings
A significant amount of research exists on individual
work support programs. This research examines program participation and
impacts on income, employment, and welfare use. The WIN web site at http://www.welfareinfo.org/
provides links to much of this research from its program and research web
pages. Less research is available on work supports collectively and on their
complex interactions.
Over the course of welfare reform, researchers have
been paying attention to participation in key work support programs.
Participation in the Medicaid and food stamp programs, for example, declined
in the mid- to late 1990s. Welfare reform and a strong economy contributed
to this decline. Recently program participation has increased because of the
recession, increased enrollment in SCHIP, and improved access to the food
stamp program. Yet participation remains low among working families that are
potentially eligible for these work support programs. Barriers to accessing
and using work support described earlier in this paper play a role in
limiting participation. For more information, see LaDonna Pavetti, Kathleen
Maloy, and Liz Schott, Promoting
Medicaid and Food Stamp Participation: Establishing Eligibility Procedures
That Support Participation and Meet Families’ Needs (Washington, D.C.:
Mathematica Policy Research, Inc., June 2002), at http://www.mathematica-mpr.com/PDFs/promotemedicaid.pdf.
Work supports are linked to positive employment
outcomes and increased family income. See, for example, Nisha Patel, Mark
Greenberg, Steve Savner, and Vicki Turetsky, Making Ends Meet: Six Programs That Help Working Families and Employers
(Washington, D.C.: Center for Law and Social Policy, June 2002), at
http://www.clasp.org/DMS/Documents/1023218370.89/Making%20Ends%20Meet.pdf.The report highlights research findings on financial
security, job retention, and program participation for six work support
programs. Programs with earnings supplements that increase employment and
family income can improve outcomes, such as educational attainment, for
children in elementary school grades. For more information, see the Making
Wages Work web page on work incentives at http://www.makingwageswork.org/workinc.htm.
Work supports can lower rates of return to welfare.
Loprest found that families using transitional support services such as
child care, health insurance, and help with expenses were less likely to
return to welfare, though relatively few families took advantage of these
supports. For more information, see Pamela Loprest, Who
Returns to Welfare? (Washington, D.C.: Urban Institute, September 2002),
at http://www.urban.org/urlprint.cfm?ID=7849.
Innovative Practices
In response to long waiting lists for subsidized
child care and to encourage businesses to help finance child care, the
Florida legislature passed the Child Care Partnership Act in 1996. The act
created the Child Care Executive
Partnership (CCEP), an innovative strategy to increase the availability
of child care subsidies for low-income working families. Through CCEP the
state matches each dollar an employer contributes to child care for families
that are income-eligible for state-subsidized child care. Employers can
contribute by subsidizing their own eligible employees or by contributing to
a purchasing pool that funds child care subsidies for families in the
community. CCEP benefits all three parties. Employers benefit from improved
morale and productivity and from less absenteeism and turnover. More
low-income working families have access to affordable child care at lower
cost. And the state is able to stretch limited child care dollars. The CCEP
board, appointed by the governor, manages the partnership and contracts with
local child care agencies that administer child care subsidies to implement
the program. By serving on the board business leaders are involved in
critical child care issues. For more information, contact Joel Rosen, chair,
Child Care Executive Partnership Board, at 1-800-935-5635.
In September 2002 the U.S. Department of Health and
Human Services approved the Illinois FamilyCare
program, allowing the state to extend medical coverage to parents and
caretakers of children in the state’s KidCare (SCHIP and Medicaid)
program. FamilyCare was approved under the Bush administration’s Health
Insurance Flexibility and Accountability demonstration initiative (visit http://www.cms.gov/hifa/
for more information). The first phase of FamilyCare extends medical
coverage to parents with annual incomes at or below 49 percent of the
federal poverty level (FPL) who have KidCare-eligible children. Nearly
30,000 parents will be newly eligible for coverage. Illinois began approving
new parents for coverage in October 2002. The FamilyCare program will be
funded in fiscal 2003 with federal matching funds allotted to the state
through Medicaid and SCHIP, allowing Illinois to extend this valuable work
support to low-income families despite the current state budget situation.
Over time, the state has the option to extend eligibility to cover parents
with incomes up to 185 percent of the FPL. The timing of further expansions
will depend on state resources and legislative approval. The federal waiver
approving the FamilyCare program will also allow more families to access
premium assistance to pay for private or employer-sponsored health
insurance. For more information, contact the FamilyCare program, Illinois
Department of Public Aid, at 217/524-7156; or visit http://www.kidcareillinois.com/html/familycare.htm.
The Manpower Demonstration Research Corporation (MDRC)
is developing a National Work Support
Center Demonstration. The demonstration will implement and test several
concepts in six to eight sites nationwide. Under the demonstration the role
of current workforce development agencies will be expanded to include
serving low-wage workers in order to increase these workers’ access to
retention and advancement services and to work support programs such as the
EITC, Medicaid, food stamps, and subsidized child care. Unique elements of
this demonstration will include a focus on delivering a cohesive package of
services and work supports and a focus on serving low-wage workers
regardless of whether they are TANF recipients. Work Support Centers may be
housed in various institutions, with an emphasis on one-stop career centers,
family resource centers, and community-based organizations, and evaluated
for their effectiveness in helping low-income working families. MDRC has
conducted numerous site visits to these potential institutional “homes”
for Work Support Centers, and it is developing case studies of promising
programs. A publication, written in partnership with the National Governors
Association, will be available in early 2003 on the outcomes of this
exploratory work. MDRC is seeking support to launch this demonstration
project in 2003. For more information, contact Frieda Molina or John
Wallace, Manpower Development Research Corporation, at 510/663-6372; or
visit
Various organizations have developed outreach and
informational materials to help states and localities connect eligible
individuals to work supports. For example, the Center on Budget and Policy
Priorities produces an annual EITC outreach kit. The 2002 kit is available
at http://www.cbpp.org/eic2002/index.html.The National League of Cities has created a Helping Working Families
Action Kit for municipal leaders that highlights outreach strategies for
work supports, available at http://www.nlc.org/nlc_org/site/files/reports/helpingworking.pdf.The Food and Nutrition Service, U.S. Department of Agriculture,
provides food stamp informational materials – posters, flyers, and
brochures – online, see http://www.fns.usda.gov/fsp/info.htm.The Welfare to Work Partnership developed informational guides for
employers interested in work supports, see http://www.welfaretowork.org/publications/smart_solutions.htm.
Visit the WIN web site at http://www.welfareinfo.org/
for links to other outreach materials.
The Tennessee
Department of Human Services (DHS) has taken steps to make it easier for
families to access and retain food stamps. DHS streamlined the application
form to one page and made it available online. To increase program
awareness, the department contracts with several nonprofit organizations to
conduct food stamp outreach activities. These activities include conducting
community education campaigns, distributing application packets at community
sites, and prescreening potential applicants and assisting them with the
application process. To improve food stamp participation among working
families, the state took the semi-annual reporting option for households
with earned income. This option allows states to collect information from
working families every six months instead of more frequent intervals. In
Tennessee this reporting requirement can be carried out over the telephone
every other reporting period. [The new farm bill expands this option and
gives states additional options to improve the participation of working
families in the food stamp program. Information on the farm legislation is
available from the Food Research and Action Center at http://www.frac.org/index.html.]Tennessee also initiated a customer service review process for TANF
case closures that reminds clients who have had their TANF cases closed that
they may still be eligible for Medicaid, food stamps, and other benefits.
For more information on Tennessee’s activities, contact Richard Dobbs,
director, or Sandra Ramsey, program coordinator, Food Stamp Program,
Tennessee Department of Human Services, at 615/313-5652.
TJX Companies,
Inc.¾operator
of T.J. Maxx, Marshalls, HomeGoods, and A.J. Wright¾has
hired nearly 30,000 individuals from the welfare rolls since 1997. TJX
understood the transition from welfare to work would not be an easy one for
many individuals and developed innovative ways to ensure success, including
partnering with service providers. The First Step Program, the company’s
welfare-to-work program, resulted from a collaboration between TJX and
Morgan Memorial Goodwill Industries in Boston. This program, which provides
classroom training, internships, and job placement, currently operates in
partnership with nonprofit community organizations in Chicago, Detroit,
Boston, Philadelphia, Atlanta, and Puerto Rico.
Finding most of its hires were unaware of available
government benefits, TJX partnered with federal and state agencies to start
educating workers about these work supports. The company teamed up with the
U.S. Department of Agriculture to educate TJX workers about food stamps, and
it worked with the Internal Revenue Service to connect workers to available
tax credits, including the EITC. TJX placed posters in each store with
information on local volunteer income tax assistance sites. The company
developed some of its own outreach materials on SCHIP to raise awareness of
this program. A new outreach initiative will educate employees about state
fuel assistance programs. TJX also works with Fannie Mae to provide its
workers with valuable financial literacy education. The company offers
on-the-job supports, including matching the new hires with mentors to help
ease the transition from welfare to work. For more information on these and
other initiatives to connect employees with valuable supports, contact
Patrick Flavin, manager of government programs, TJX, at 508/390-3639; or
visit http://www.tjx.com/frames/cr.html.
Work Central,
a project of the nonprofit organization Connectinc., provides case
management and resource information services to help former welfare clients
stay employed and advance. These services are provided through a call center
that serves nine counties in North Carolina. County departments of social
services refer customers to Work Central. Individuals seeking assistance
also initiate calls. Through telephone counseling and information and
referral, Work Central staff work with customers on career development and
advancement, financial planning and asset accumulation, and personal and
family needs that may interfere with employment. Staff help customers
connect with numerous support services, including key work supports such as
the EITC and child care subsidies, and they provide intensive followup to
ensure customers receive needed supports. An automated system enables staff
to access information for customers on a real-time basis. Staff are
available from 8:00 a.m. to 8:00 p.m. Monday through Friday and from 9:00
a.m. to 5:00 p.m. on Saturdays to ensure access for working families.
Connectinc. receives state funding, local TANF maintenance-of-effort funds,
foundation funding, and support from businesses. In addition, the state
employment security commission, in partnership with Connectinc., assigned a
full-time staff person to Work Central who provides job leads and assists
with employment activities. For more information, contact Jackie Savage,
executive director, Connectinc., at 252/442-3265; or visit http://www.connectinc.org/.
For
More Information…
Resource
Contacts
The Brookings Institution, contact Isabel Sawhill or
Molly Fifer, 202/797-6000; or visit http://www.brookings.edu/.
Center on Budget and Policy Priorities, contact Heidi
Goldberg, 202/408-1080; or visit http://www.cbpp.org/.
Center for Law and Social Policy, contact Nisha
Patel, 202/906-8000; or visit http://www.clasp.org/.
The Lewin Group, contact Michael Fishman,
703/269-5500.
National Governors Association, contact Lisa
Grossman, 202/624-5300; or visit
Adams, Gina, Kathleen Snyder, and Jodi R. Sandfort. Navigating
the Child Care Subsidy System: Policies and Practices that Affect Access and
Retention. Washington, D.C.: Urban Institute, March 2002. Available at http://www.urban.org/UploadedPDF/310450.pdf.
Bravo, Ellen, Mark Greenberg, and Cindy Marano. Investing
in Family Well-Being, a Family-Friendly Workplace and a More Stable
Workforce: A “Win-Win” Approach to Welfare and Low-Wage Policy. New
York, N.Y.: Ford Foundation, summer 2002. Available at
Fishman, Michael E., and Harold Beebout. Supports
for Working Poor Families: A New Approach. Princeton, N.J.: Mathematica
Policy Research, Inc., December 2001. Available at
Haskins, Ron. “Making Ends Meet: Challenges Facing
Working Families in America.” Testimony before the House Committee on the
Budget, on behalf of The Brookings Institution, August 1, 2001. Available at
http://www.brook.edu/views/testimony/haskins/20010801.htm.
Lazere, Ed, Shawn Fremstad, and Heidi Goldberg. States
and Counties Are Taking Steps to Help Low-Income Working Families Make Ends
Meet and Move Up the Economic Ladder. Washington, D.C.: Center on Budget
and Policy Priorities, May 2001. Available at http://www.cbpp.org/5-18-01wel.htm.
Manpower Demonstration Research Corporation. Beyond
Welfare and Work First: Building Services and Systems to Support
California’s Working Poor and Hard-to-Place¾Conference Highlights. New York, N.Y.: Manpower Demonstration Research
Corporation, January 2001. Available at http://www.mdrc.org/Reports2001/CA-Conference/MDRC%20Sacramento%20Brochure.pdf.
National Partnership for Women and Families. Family
Leave Benefits: A Menu of Policy Models for State and Local Policy Leaders.
Washington, D.C.: National Partnership for Women and Families, September
2001. Available at
Patel, Nisha, Mark Greenberg, Steve Savner, and Vicki
Turetsky. Making Ends Meet: Six
Programs That Help Working Families and Employers. Washington, D.C.:
Center for Law and Social Policy, June 2002. Available at
Pavetti, LaDonna, Kathleen Maloy, and Liz Schott. Promoting
Medicaid and Food Stamp Participation: Establishing Eligibility Procedures
That Support Participation and Meet Families’ Needs. Washington, D.C.:
Mathematica Policy Research, Inc., June 2002. Available at http://www.mathematica-mpr.com/PDFs/promotemedicaid.pdf.
Sawhill, Isabel, and Adam Thomas. A
Hand Up for the Bottom Third: Toward a New Agenda for Low-Income Working
Families. Washington, D.C.: Brookings Institution, May 2001. Available
at http://www.brook.edu/views/papers/sawhill/20010522.htm.
Sawhill, Isabel, and Ron Haskins. Welfare
Reform and the Work Support System. Washington, D.C.: Brookings
Institution, March 2002. Available at
The
Welfare Information Network is supported by grants form the Annie E. Casey
Foundation, the Charles Stewart Mott Foundation, the David and Lucile Packard
Foundation, the William and Flora Hewlett Foundation, the Ford Foundation, and
the Administration for Children and Families, U.S. Department of Health and
Human Services.
