Benefit Conditionality in the U.S. Welfare System and How it Applies to WIA

1. Benefit Conditionality in the U.S. Welfare System and How it Applies to WIA Jason Turner, Heritage Foundation Former Chief Administrator of New York City’s Welfare and WIA System (1998-2001)

2. Conditionality—Requirements that recipients of government benefits reciprocate in exchange for assistance. • Welfare is the program to provide income support and employment for the lowest income parents of children, mostly with marginal prior work backgrounds. Benefits are conditional. • WIA for adults is more broadly intended to help low and moderate income workers who are mostly unemployed find work or receive skills training. Services are mostly voluntary.

3. U.S. Welfare Conditionality has Three Significant Features: • Policy—To improve TANF employment effectiveness. • Administrative—Requires agency management improvements. • Ethical or Philosophical—Supports public wishes for reciprocity.

4. Conditionality in welfare resulted from public dissatisfaction with unconditional distribution of benefits without expectations of self-help. • Welfare incorporates conditionality as a central part of its program; it is possibly its single most important feature of its required work program.

5. During the 1980’s conditionality was incorporated into the welfare program in the form of “participation,” or attendance requirements in welfare-to-work programs. • The 1996 major welfare-to-work reform (TANF) increased the numbers of recipients who could be required to participate, and increased the expected level of effort. • Proportion of those expected to be actively participating: 50%. • Number of hours/week of activity required: 30.

6. Human Resources Administration CA Weekly Report—October 25, 2009

7. Human Resources Administration CA Weekly Report—October 25, 2009 (cont.)

8. Human Resources Administration CA Weekly Report—October 25, 2009 (cont.)

9. Management Elements of “Full Engagement” in Work Activities • Communicating with potential applicants and current recipients. • Maximize enrollment in work program. • Start participation immediately start participation immediately of assignment.

10. Management Elements of “Full Engagement” in Work Activities (cont.) • Have a suitable work activity available for everyone. • Follow every individual to assure they are meeting their participation obligations (tracking). • Impose swift penalties for non-compliance in required activities.

11. Management Elements of “Full Engagement” in Work Activities (cont.) • Keep goal of private employment topmost in mind and continuously look for employment while engaged in other program activities. • Use performance payments to signal to employment vendors what their program objectives are. • Adopt data-driven continuous improvement measures for local and state agencies.

12. How the Texas WIA Program and the New York City’s “Welfare to Work” Program Used Similar Management Tools to Boost Employment Effectiveness

16. Texas Re-employment Rate(Within 10 Weeks of Unemployment) Conditional Changes 2Q/3Q 2003 Placed One-Stops under requirement to measure how many get jobs within ten weeks of unemployment application (plus three other new measures) Merged WIA and unemployment assistance to in order to place management emphasis away from benefits and onto employment

17. Texas Re-employment Rate(Within 10 Weeks of Unemployment) Conditional Changes 4Q 2004 Increased to three the number of required weekly applications for employment Increased agency monitoring of weekly applications for employment

18. Block Grants Have Policy Implications • TANF eliminated entitlement formula funding for cash benefits. • Replaced by fixed formula grants to states with required state share.

19. Major Program Implications • Made it easier for federal government to enact conditional program requirements. • Placed pressure on state governments to move recipients into labor force. • Stabilized federal expenditures as compared to prior upward trajectory. • Total Before (Billions) 1990–221995–30(+27%) • Subset Federal 1990–121995–16(+33%) • Trend After (Billions) 1997–232001–25

20. Lessons for the European Commission • Conditionality of welfare payments on the receipt of public benefits has certainly contributed to the success of the 1996 welfare reforms. • Conditionality usually operates in conjunction with a benefit such as cash assistance or unemployment benefits. However it can operate less broadly in conjunction with a non-monetary requirement, such as enforcement of certain laws.

21. Lessons for the European Commission (cont.) • To adopt conditionality into a program is not only a matter of policy—it requires a tremendous commitment in administrative attention and resources, and requires political determination to succeed. • European governments wishing to adopt conditionality as a feature of some of their programs for the underemployed should look for ways to connect in addition of conditioned requirements to accepted norms and values of the electorate.

22. Lessons for the European Commission (cont.) • To adopt conditionality into a program is not only a matter of policy—it requires a tremendous commitment in administrative attention and resources, and requires political determination to succeed. • European governments wishing to adopt conditionality as a feature of some of their programs for the underemployed should look for ways to connect in addition of conditioned requirements to accepted norms and values of the electorate.