In 2011, the researchers Toby Herr and Suzanne L. Wagner of Project Match released a sobering report on the lessons of two decades of welfare-to-work and workforce development research:
Over the past two decades, one study after another has shown that most people in welfare-to-work and workforce development programs do not become steady workers, employed month in and month out, year after year. Instead, the majority fall into the categories of nonworker or intermittent worker. The statistics on sustained employ- ment are amazingly consistent over the years—no matter the mix of program services, government mandates, income supports, or labor market conditions. Programs might have preemployment services only or both pre- and postemployment services; they might be “light touch” or “intensive”; they might include education and training. Programs might be voluntary or mandatory; there might be partial sanctions or full sanctions for noncompliance. Programs might provide earnings disregards or wage supplements for those who work; there might be other benefits like child care or health care as well. The labor market may even be good for low-skilled workers. But the picture never looks any different: Most participants in welfare-to-work and workforce development programs do not end up working steadily, even in programs that have high job-placement rates.
Herr and Wagner demonstrate that while many of the welfare-to-work and worforce development programs they assess showed decent short-term results, the long-term results were almost always discouraging. Ever-employed rates consistently exceed steady-employment rates by extremely wide margins. Subsidized transitional jobs have been embraced as a strategy to help ease people with no work history into unsubsidized jobs, and these programs do seem to have done a good job of breaking the habit of nonwork. But so far, at least, relatively few (one-third in the case of one Chicago initiative) eventually transition to unsubsidized jobs. This raises the question of whether transitioning workers to unsubsidized jobs is the sole reason to create subsidized jobs. Herr and Wagner endorse the following passage from an MDRC report:
It is important to acknowledge that transi- tional jobs and other subsidized employment models have multiple goals and can play an important role even if they do not necessarily lead to long-term improvements in participants’ employment outcomes. Certain groups—including long-term welfare recipients, former prisoners, unemployed noncustodial parents, and disadvantaged youth—have a very difficult time getting and holding regular jobs. Employment rates for these groups are likely to be particularly low in the current economic environment, but these groups fare poorly even when the labor market is relatively strong. The evidence suggests that giving these groups opportunities to work for pay could produce spillover benefits by reducing crime, improving communities, connecting alienated young people to mainstream institutions and lifestyles, or helping to reduce the stigma of welfare receipt.
But Herr and Wagner go further than MDRC, arguing that while maintaining there should be a quid pro quo for recipients of public benefits, we should look beyond helping poor people transition into steady employment as the sole measure of success. Rather, we ought to recognize that there is a class of “motivated nonworkers” who might enrich society as active community members and engaged parents. Herr and Wagner describe one program which created community stipend positions (e.g., an afterschool safety patrol):
All the different types of community stipend positions are like traditional transitional jobs in that they are highly structured and highly super- vised. There is a set schedule for each participant, along with very specific responsibilities that must be met for each shift; expectations are very clear and there is daily feedback, as well as regular group meetings for discussion among peers, led by Project Match staff. But the positions are not like transitional jobs in that the time commitment is much lower (for example, the groundskeepers each have a one-hour shift, five days per week); the positions are all tied explicitly to improving the community where participants live; and there is not an expectation that the position should serve as a stepping-stone to a regular job, though through observation and month-to-month tracking Project Match staff are able to identify if a participant might try moving up to subsidized or unsubsidized employment. However, even those who stay in stipend positions are “nudged” to assume more responsibilities when ready—for example, taking on some supervisory tasks. Depending on the specific position, the monthly stipend can be as much as $100 or $120 if all scheduled shifts are successfully completed, and the stipends are given in the form of a gift card to Wal-Mart or Target. Though not large, the monthly stipend has proved meaningful to participants and promoted engagement.
The idea is that community stipend positions along these lines can help stabilize neighborhoods, which might otherwise be damaged by extremely high levels of unemployment and social isolation. While I appreciate that Herr and Wagner are drawing on long experience in reaching this conclusion, my strong inclination is to adhere as closely as possible to the model of mandatory participation in work, including subsidized work. If we’re going to create community stipend positions, and I’m not averse to the idea, particularly if the goal is to facilitate and reinforce the transition of high-poverty neighborhoods to mixed-income status, I’d want to place greater emphasis on encouraging full-time work participation.