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THE LABOR FORCE
From the Bottom Up
At the lower end of the labor market, more people are working — but for how much?
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Business New Haven
7/12/1999
By: Susan Banfield
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By now nearly everyone knows that unemployment in Connecticut and in greater New Haven is down significantly from its levels of just a few years ago. As of April 1999, unemployment in the greater New Haven's labor market area (LMA) stood at just 3.9 percent, representing a total of 8,244 individuals unemployed. The jobless rate for the year of 1996 was almost twice that - 6.8 percent, or 15,878 unemployed workers. The figures certainly would appear to indicate that more people are off welfare and on payrolls than have been for a long time.
Of course, it must be noted that state Department of Labor (DOL) statistics do not accurately reflect the numbers of poor people who are not working. The Department's numbers are compiled mainly by tallying those receiving unemployment benefits and those enrolled in some kind of government job program. Since unemployment benefits are awarded for only 26 weeks after a person loses his or her job, the statistics fail to take into account the many men and women who remain jobless after the 26-week benefit period. (According to David Post of the DOL's Office of Research, 95 percent of people who receive unemployment remain unemployed after their 26 weeks of benefits have expired.) There are also significant numbers of people who are out of work but remain unenrolled in any kind of job program.
One must also take into account the many factors which affect the unemployment rate. Still, it is more than coincidence that the drop in the figures corresponds to the time during which the state's welfare-to-work policies and programs have been in place.
Connecticut's time-limited welfare and Jobs First program have been in existence since January 1996. Under the new policy, people are eligible to receive TFA (Temporary Family Assistance) cash benefits only for 21 months. After that time, cash assistance ceases.
The qualifications for an exemption to this ruling are stiff: You must be incapacitated, be over 60, be pregnant or recently have given birth and have a note from your doctor saying you cannot work, or be a parent under age 18. The idea is to push people to become self-sufficient.
For the past year, the Department of Labor, the Regional Workforce Development Board, and the Department of Social Services (DSS) have been working in concert to try to help those receiving TFA get work. The people whom the Department of Social Services places on TFA are usually referred to either the Department of Labor, which helps place people in jobs, or they are referred to the Regional Workforce Development Board for training.
It should be noted that clients receive various kinds of non-cash and cash assistance to encourage them make the transition from welfare to self-sufficiency. Health care assistance can continue for two years after they find a job. Children remain eligible for free or very low priced health care under the HUSKY Program. Child care assistance and food stamps are also available if a client's income is low. In addition, cash assistance may also continue if a person finds work before the 21 months is up but makes little money. Says Alice Ellovich of the Department of Social Services, "You're a lot better off working than not working."
At least some of the numbers seem to indicate that the new programs are having the desired effect. Four years ago the total number of clients receiving welfare (Aid to Families with Dependent Children) state-wide was 59,194. The percentage of those clients who earned some money while receiving benefits was 13 percent.
As of April 1999, the state's total welfare caseload had dropped to 44,032, and of these, 41.3 percent were earning money while receiving benefits. "Our case loads have decreased dramatically," says Ellovich.
The local DOL and Regional Workforce Development Board programs have placed 717 clients referred to them over the past year. Many others have found work through local temporary agencies. "More people are scrambling to find jobs," says Stephanie Latham of Labor Ready in New Haven.
Mike McGrath, general manager of Temporary Labor, agrees. "We've felt there are more welfare recipients [entering the temporary-labor pool] in the last two years," he says.
Tom Avalon, who has been involved in federal job programs for 25 years and who currently is program-services coordinator for the Department of Labor's Hamden office, says of the whole process: "I believe this is a very good program. It has helped to reduce unemployment in this area."
Despite the apparent success of the policy, some questions remain. The biggest of these are, what kinds of jobs are people finding, and are these able to support even a modest lifestyle?
The most common types of jobs clients are getting are low-level clerical and service jobs. The average wages are $6 to $8 an hour, according to Avalon. So long as a family is receiving child-care help, food stamps and medical benefits, this is almost tolerable. But $14,000 a year is tough for even a single person to live on.
Predictably, the retention rate for people who leave welfare and get jobs is quite low. Nationally, 48 percent leave their jobs within the first six months, and 72 percent leave before a year has elapsed.
One of the potential problems with the new policy is that, as its name, Jobs First, implies, the emphasis is on finding a job - any job - rather than on getting trained for work that pays well and has a future. It may take private-sector initiatives to help bridge the gap here.
One local program that may help is the so-called retail "academy" proposed as a joint venture between New England Development Corp. (NED, co-developers, with the New Haven-based Fusco Corp., of the proposed Long Wharf mall) and the city of New Haven.
According to New England Development Senior Executive Vice President Bill McCabe, the developer's goal is to draw 35 percent of the mall workforce from the city of New Haven. This would mean approximately 1,000 new jobs for New Haven residents. NED has proposed working with the city to build a facility to give people the training they would need for these jobs. "The average entry-level retail job is over $18,000 a year," McCabe points out. He also notes that the opportunities for advancement in the retail field are very good.
Tom Avalon agrees that retail would be "a good field for many of our clients."
McCabe says that the work of identifying a site for the academy is currently being done, and that it hopes to open its doors as soon as construction on the mall begins.
There are many other industries whose skills are also within reach of many new entrants to the labor market, if training in them were made available. The new state programs are helping to ease unemployment and poverty in the region. But there is still room for more efforts on the part of the private sector to help provide more people with a future worth working toward.
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