February 10, 2000

Is welfare reform working?  Yes, according to a group of corporate and academic leaders who today called the 1996 reforms a “profound change in strategy” from “check cutting to career planning.”  But the Committee for Economic Development’s (CED) newest report, “Welfare Reform and Beyond: Making Work Work,” strongly urges business and political leaders to “complete welfare reform” and improve our society’s transition from welfare to work.  Real reform will be achieved, CED argues, only when the welfare system becomes a “sustainable vehicle” for finding and maintaining employment and reducing poverty.  CED’s report recommends ways the public and private sector can offer struggling families the incentives and supports necessary to work their way out of poverty.

Nationally, welfare caseloads have plunged to levels not seen in nearly 30 years.  Roughly 80 percent of former recipients report working for some period after leaving welfare, and nearly 60 percent are employed at any one time.  “But the next steps will be more difficult,” cautioned the report’s co-chair, Matina S. Horner, Executive Vice President of TIAA-CREF.  “We must move beyond getting people off the rolls to concentrate on helping them find and keep jobs.  Welfare reform is far from finished.”

CED’s report presents a detailed analysis of data from the first four years of welfare reform and calls on the federal, state, and local governments to:

Extend comprehensive services to support work, including career-readiness programs, job-placement assistance, childcare, transportation, and health insurance.

Maintain funding for work-support initiatives even as welfare caseloads decline.

Prepare for economic downturns with “rainy day” reserves.

Create financial incentives for the working poor, including lower state income taxes for families in poverty, expanded unemployment insurance for low-wage, seasonal or part-time work, and more accessible Medicaid, Food Stamp, and EITC benefits.

Offer employment options, ranging from short-term, transitional public service jobs to unsubsidized private employment.

Continue efforts to improve educational opportunities for children and adults. and adults.

Use successful reform initiatives in some states to jump start employment-based welfare reform efforts in others.

            Underlining the critical importance of the business community’s participation in implementing employment-based welfare reform, CED urges private employers to consider welfare recipients as potentially productive employees.  “The reforms create new opportunities for welfare recipients and employers,” said the report’s co-chair, Rex D. Adams, Dean of the Fuqua School of Business at Duke University.  “In spite of our economy’s upgrading of skills, the demand for low-skill labor will continue to increase.  By 2006, these jobs will still constitute 42 percent of total U.S. employment.  As employers, we cannot afford to overlook welfare recipients as potential employees, especially with labor shortages looming ahead.”

  Specifically, CED encourages employers to:

Make hiring decisions based on individual qualifications, not public assistance history. 

Take advantage of the screening, training, mentoring and other work-support services offered by public, private, and non-profit welfare-to-work programs.

Expand internal support services for low-wage workers, especially in areas such as child care, transportation, career counseling, and mentoring.

“Sustainable, fundamental reform is within the nation’s grasp,” said CED President Charles Kolb.  “But the circumstances that have contributed to welfare reform’s success thus far – a booming economy and robust job market, very strong state fiscal positions, and firm public and private support for this new approach – will not last indefinitely.  We must take decisive steps toward creating an employment-based welfare system now.”

CED is an independent, nonpartisan public policy organization of more than 200 business and academic leaders committed to promoting economic growth and greater opportunity for all Americans. 

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            Welfare Reform and Beyond: Making Work Workis available from CED, 477 Madison Avenue, New York, NY  10022, telephone 212-688-2063 (dial ext. 274 to order), fax 212-758-9063.  The cost is $18.00 per copy.  Please add 15% for postage and handling.  Orders under $50 must be prepaid by check or money order (in U.S. dollars).