Working on welfare

Entrepreneur, Jan, 1998 by Cynthia E. Griffin

For at least a decade, small business has been touted as the major job-creation machine behind the U.S. economy. Now the government has tapped small business to play a leading role in the national effort to put welfare recipients to work. But does Uncle Sam really understand what you need to do this?

Since we first told you about the potential business opportunities resulting from welfare reform legislation last January, much has taken place. One of the biggest changes has been the government's shift in focus from welfare reform itself to the welfare-to-work effort. Under this movement, state and federal governments are focusing on transferring people from the welfare rolls into unsubsidized jobs as quickly as possible.

States have touted the success of their own welfare-to-work programs by noting the number of people who have left the rolls. According to the U.S. Department of Health and Human Services Administration for Children and Families, 607,000 families left the welfare rolls since The Personal Responsibility. Work Opportunity Reconciliation Act was signed into law in August 1996. Now states are working to reach their first required goal of moving 50 percent of eligible caseloads into the work force - encompassing an estimated 2 million people nationwide.

* PITCHING IN

Federal, state and local governments have asked the business community to take an active role in getting these welfare recipients into the workplace. And business is listening: Several national coalitions have been formed to assist with the process. One of the major forces in this effort is The Welfare to Work Partnership, created last May by United Airlines, UPS, Burger King Corp., Monsanto and Sprint to encourage the private sector to hire those coming off welfare. Membership in the partnership, open to any company that has hired or commits to hire at least one welfare recipient, has already grown to include some 2,200 companies nationwide.

"The partnership was launched with the simple mission to encourage businesses of all sizes, sectors and regions to hire and retain those on public assistance without displacing current employees," says Eli J. Segal, president and CEO of the nonprofit partnership.

It's accomplishing this by giving business owners the information, technical assistance and support they need to hire welfare recipients. Blueprinter Business: Reaching a New Work Force is one resource the partnership is using. The free 50-page publication, published by The Welfare to Work Partnership and the National Alliance of Business, provides resources such as informational Web sites, examples of successful programs, a realistic look at obstacles business owners face in hiring welfare recipients, and suggestions on how to get federal, state and local government help in areas such as employee training.

In addition to organizations like the partnership, federal government agencies have been asked to take an active role in the welfare-to-work campaign. For example, the Small Business Administration's (SBA) activities range from conducting national surveys to determine labor force needs to identifying small businesses that are willing to hire welfare recipients.

The SBA has also pledged to use the Small Business Development Centers, Women's Business Development Centers, Service Corps of Retired Executives (SCORE) volunteers and other resources to help the effort. Members of the Business Women's Network, in partnership with the SBA's Office of Women's Business Ownership, recently pledged to hire more than 10,000 women on welfare as part of its Welfare-to-Work Initiative.

* THE BIG PICTURE

Organizations representing the small-business community strongly support the welfare-to-work movement - but some of their members question the benefits.

It's not that these entrepreneurs don't need the workers. After all, hiring welfare recipients would ostensibly solve a pressing problem many firms face nationwide: a severe labor shortage. But there's much more to their needs than just willing hands; one fear business owners have is that those coming off welfare don't possess the education needed for many positions.

Their fears are not unfounded. According to a report from the Urban Institute for the Department of Labor's Employment Training Administration, a general profile of the welfare population reveals that 42 percent have less than a high school degree. (Seventy-five percent of the U.S. population aged 25 and older has a high school diploma.) On the plus side, however, 42 percent of recipients have earned a high school diploma or equivalent and another 16 percent have some college education. Seventy percent have recently worked, and the average employment experience is 4.2 years.

For firms in areas such as the service, retail and hospitality industries, which do not require highly skilled employees, matching these people with jobs may be possible. "Retailing is often the first employer of people coming into the work force, and we are eager to recruit," says Kathy Mance, vice president of research, education and community affairs at the National Retail Federation. The organization, which represents an estimated 1.4 million retail establishments, projects the industry will need 3 million new employees between 1994 and 2005.