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“Workfare” Calls for Mobility of Low-Income Workers

Sreya SarkarCascade Commentary

Summary

Low-income workers need access to higher-skilled jobs to increase their income and independence. Addressing their real-life transportation needs will help post-TANF individuals transition into the mainstream workforce with stability and permanence.

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Despite its new focus on the importance of transitioning from welfare to work, the Temporary Assistance for Needy Families (TANF) program has failed to reduce poverty, though it initially succeeded in reducing case numbers. Former welfare recipients have found themselves in dead-end jobs with inadequate education and training opportunities. They still need public assistance in some form, such as food stamps and subsidized housing. Therefore, the ultimate aim of revamping the welfare system to end dependency still remains unfulfilled.

Where did the welfare reformers go wrong? Perhaps in assuming that welfare recipients’ journey from acquiring a job to reaching self-sufficiency would be short. They took it for granted that the moment welfare recipients acquired employment, they would immediately become self-sufficient, and their dependence on the welfare system would end for good. What the reformers did not realize is that employment is the just beginning of a new struggle for post-TANF households. They still needed help to acquire better employment and increase their income.

“Where did the welfare reformers go wrong? Perhaps in assuming that welfare recipients’ journey from acquiring a job to reaching selfsufficiency would be short.”

Activists who promote increasing the minimum wage and expanding benefits like health insurance and paid sick leave do not realize that there is a limit to the burden which employers can bear in enabling the upward mobility of low-income workers. Moreover, such employer-based measures are only oriented toward the short term.

Low-income employees also need to work towards increasing their income in the long run, which is achieved by acquiring higher-level skills and experience. This calls for offering low-income workers greater physical mobility to enable them to hold more than one job and to further their education and job training. When these conditions are not present, TANF caseloads tend to rise, as they recently have in Oregon.

After a steep decline between 1994 and 2000, the number of Oregon TANF cases statewide has gradually increased over the last five years. The Oregon Department of Human Services reports that total TANF caseloads have increased in the most populous counties in the state, including Clackamas, Multnomah and Washington, in the last year.

Oregon also faces the challenge of changing its TANF program significantly to meet federal requirements set by the Deficit Reduction Act of 2005. Oregon essentially needs to focus on connecting half of TANF recipients to work-related activities or lose up to $14 million annually. House Bills 2180 and 2469 in the 2007 Oregon legislature, which intend to restructure the state welfare program, highlight the need to identify TANF recipients’ barriers to employment.

Lack of reliable transportation is one of the most significant barriers for low-income workers. The complex nature of their transportation needs, resulting from their need to balance work, job training and family simultaneously, makes it difficult to address their challenges solely by extending public transit. Public transit is not ideal for workers who are trying to do so many things at the same time. In rural counties the transportation barrier becomes an even bigger issue because of the longer distances. Finding and maintaining employment take longer because of limited access to transportation. Lack of transportation is a serious disincentive to employment.

“Congress realized in 1997 that transportation is the key to moving welfare recipients and other lowincome residents to employment and related services.”

TANF funds can be used by states to assist low-income working families with transportation, including providing funds to purchase and maintain cars. Since public transit is not practical for low-income workers, a range of private car ownership programs for them have developed in the last decade. The range includes programs that employ a number of strategies, including making affordable and reliable vehicles directly available to customers, providing low-cost loans, and facilitating matched savings accounts to enable vehicle purchases.

More than 160 car ownership programs for low-income families currently exist in the U.S. States and counties increasingly turn to cars as a means of helping low-income working families reach their jobs. Kansas, Michigan, Nebraska and Pennsylvania have statewide programs offering assistance to lease or purchase cars. Colorado and Ohio have county-run or local car purchase programs. Oregon currently has approximately 18,294 TANF families, only 2.5% of which receive assistance from the TANF program to acquire or maintain vehicles.

Congress realized in 1997 that transportation is the key to moving welfare recipients and other low-income residents to employment and related services. That is why it created a new fund, Job Access and Reverse Commute (JARC), for innovative solutions to transportation problems faced by poor workers living in the city core or rural counties and work in suburban locations. For 2007, $571,403 was available for the Portland Urbanized Region JARC fund, of which $54,000 is assisting Metropolitan Family Service’s Ways to Work low-income car ownership program. An additional $395,978 was available for the non-urban JARC fund in Oregon, but there is a lack of similar car ownership programs in non-urban Oregon.

To prevent TANF cases from increasing again, Oregon and other states have to understand that the kind of support useful to people entering the workforce is different from the handout supports they received under the welfare regime. Welfare is transforming into “workfare,” an alternative model of conventional social welfare systems with an emphasis on employment activities on behalf of the welfare recipients. States should provide post-TANF individuals with the right incentives and supports to transition into the mainstream workforce with stability and permanence.

A car-ownership program for low-income workers is essentially a “workfare” program. Policymakers should address low-income workers’ transportation challenges realistically. By supporting programs that promote reliable, flexible transportation, we can help these workers to have the mobility and independence to make their transition from welfare to self-sufficiency permanent.

Sreya Sarkar is Director of the Wheels to Wealth Project at Cascade Policy Institute, Oregon’s premier public policy research center. To read other publications of the Wheels to Wealth Project, visit www.cascadepolicy.org.

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