June 11, 2009

Growing Unemployment: A "Game Changer" for TANF?

[We're delighted to have another post about TANF by Joni Podschun from SOME. Word on the street is that SOME and Joni are on Twitter! - ed]

Facing a major budget crisis, Governor Arnold Schwarzenegger recently suggested his troubled state eliminate CalWORKS, California's version of Temporary Assistance for Needy Families (TANF). This proposal was labeled both "bad economics" and heartless. Indeed, it seems incredibly shortsighted to cut safety net programs (and forfeit federal money) even as people are falling out of work and struggling to survive.

Surely enough, the California legislature's special committee on the budget has just voted to reject the Governor's proposal. For now, the program lives on.

And yet, most policy makers, social workers, and advocates would agree that TANF is not meeting its objectives. As I explained here before, caseloads are stagnant at best, and in many cases falling, even as unemployment claims and Food Stamp participation skyrocket. Nationally, the share of families eligible for TANF that are receiving assistance has gone from 85% in the mid-90s to 40% now.

There are many factors behind this trend. For starters, let's consider one of the primary principles behind the Clinton-era Welfare Reform that created TANF: "Work First." Work First presupposes that TANF participants can quickly find employment in the job market and thereby reduce dependence on public assistance. TANF was originally devised under the assumption that it just would take a little help for most TANF recipients to find and keep a job (if only a low-wage entry level job).

That principle has been debated ever since, but in this economic climate it presents a glaring disconnect that is hard to avoid: these days, finding and keeping a job is hard for everyone, everywhere. 5.7 million jobs have been lost since the recession began in December 2007 and the rate of loss is only just now beginning to slow.

This graph from the Center for American Progress (CAP) shows the severity of the jobs lost compared to recent recessions. Meanwhile, the stimulus package passed a few months ago promises to preserve or create only about half of the jobs we have lost so far.

At a recent poverty conference I attended, Heather Boushey, an economist with CAP, called the economic crisis a “game changer” for TANF. The New York Times article on the conference quotes Dr. Timothy Smeeding, who says, "We're really in a pickle."

The cold hard truth that they're getting at is that the workforce doesn't really have room for TANF recipients -- and it won't for quite some time.

So, does this mean that the Governator is actually right to move to cut TANF? If TANF is meant to put people to work, but there's no work out there, should TANF get scrapped?

Not at all. At least in DC, the TANF program could be adapted to effectively help needy families even in this economic climate. So far, the program has not been responsive to the "changing game." But the potential is there.

The first step would be rebalancing TANF services to go beyond Work First.

Currently, TANF-funded employment services focus primarily on soft skills: how to dress, how to interview, how to conduct yourself in the workplace. In theory, that's enough to get people into basic labor. But it doesn't actually equip people with the hard skills and education needed to be a truly valuable member of the work force.

Programs that focus on hard skills already exist within the current TANF structure in DC. TANF recipients can receive tuition assistance towards a college degree, for instance; they can also engage in subsidized employment and on-the-job training. If they know who to ask, TANF recipients are usually able to get permission to go to GED classes or hard skills training like SOME's Center for Employment Training.

But the process for finding out about these programs is inadequate. In a study that SOME will release next month with the DC Fiscal Policy Institute called "Voices for Change: Perspectives on Strengthening Welfare-to-Work from DC TANF Recipients," we find that service providers and recipients don't know about their options for training, support services, and education. As a result, these alternatives to Work First are vastly underutilized (the final numbers will come out in our report).

More effort is needed to make the most of these programs. Part of the solution is simple enough: better procedures for assessment, screening, and orientation.

There should also be shift in funding priorities. These programs are a bigger investment, in terms of both public dollars and participants' time. But they are also a better investment. With the contracting job market unlikely to absorb TANF participants anyway, more long-term programs would actually be an optimal use of available resources, rather than leaving so many people to cycle back through the program. And when the economy rebounds, participants will be able to get better jobs that allow them to provide for their families.

In the meantime, however, there's another pressing need: greater income support. Even with more effective job training programs, TANF recipients are facing a long stretch of unemployment as our country winds through the Great Recession. During that time, we need to ensure that these needy families have adequate income, as we've discussed before. (Currently, the TANF benefit for a family of three is just $428 per month. That's intended to cover housing, transportation, utilities, household expenses, etc.)

We applaud DC Councilmembers, led by Jim Graham, who voted last week to increase the TANF benefit in the fiscal year 2010 budget. We should take the next step and look at what families really need to be healthy and stable.

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