United States Department of Labor

Futurework

Trends and Challenges for Work in the 21st Century

In 1996, the federal government enacted legislation ending the federal entitlement to assistance for eligible needy families with children and created the Temporary Assistance for Needy Families (TANF) block grant. Since families receiving this benefit have a five-year lifetime limit for federal assistance, there is a great deal of concern about their future employment prospects. To address this concern, the Balanced Budget Act of 1997 authorized the Department of Labor to create a $3 billion Welfare-to-Work grants program for states and local communities. These grants assist long-term welfare recipients and certain low-income noncustodial parents in high poverty areas to get jobs and succeed in the workforce. This program is particularly important because the individuals remaining on the welfare rolls face particular challenges.

Welfare recipients are a diverse group. About half of all adults on welfare have at least a high-school diploma, about half are less than 25 years old, and over half (56 percent) are white. A majority have only one child, and 56 percent have never been married. Many experience poor health or depression, almost half have no car, and 15 percent suffer from domestic violence. Ten to 15 percent have disabilities that limit employment. However, welfare recipients do face some common barriers to finding work--the majority have limited job skills to offer employers.

Low-income noncustodial fathers are of a particular concern as they often live on the margins of society and cannot support their families. Forty-three percent are high-school dropouts. Twenty-nine percent are unemployed or not in the labor force. Less than one-third work on a full-time, year-round basis. Many low-income, noncustodial fathers live in central cities that are distant both physically and psychologically from the growing job opportunities in the suburbs. At least three-fourths of these fathers have been arrested or have ongoing legal problems. Research indicates that once a young man has been incarcerated, his employment and earnings are substantially reduced for many years to come. Additionally, many noncustodial fathers lack access to social networks that can be critical in locating employment. A large proportion of jobs is filled by informal recruitment among employers who seek referrals from their current employees and other acquaintances.* The poor labor market prospects of these low-income noncustodial fathers affect their families and neighborhoods.

A recent review of state welfare programs by the U.S. General Accounting Office (GAO) found that between 61 and 87 percent of adults leaving welfare had held jobs at some point. The lower figure includes those families who had returned to welfare; the higher figure is only out of a sample of families who stayed off welfare. Work, coupled with postemployment training and support services such as mentoring, child care, and transportation, has proven to be effective in assisting individuals to move from welfare to self sufficiency. However, many of these jobs were short in duration and most were low-paying. The GAO study found that many families (between 18 and 30 percent) returned to welfare.

*Excerpted from the testimony of Raymond J. Uhalde, Deputy Assistant Secretary of Labor for Employment and Training, before the House Subcommittee on Human Resources, April 27,1999

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