JOBS 1.03: Why Welfare; Why Not Jobs!

05/25/2011 02:50 pm ET

Tomorrow the White House holds a conference on Jobs. In 2010, the federal welfare program--Temporary Assistance for Needy Families or TANF--is due to be reauthorized. These two events should not be regarded as isolated. TANF reauthorization should provide the Country with the opportunity to actually "change welfare as we know it" by eliminating the welfare program for persons capable of work and replacing it with a JOBS program. Or, at the very least, states should clearly be given this option.

This fourth post of the subject of jobs will discuss why and how the Nation can substitute a jobs program for the welfare program. In many states the cost will be surprisingly modest. Indeed, if all governmental costs are taken into account, it is almost certain that in many states a well designed jobs program will cost less than today's welfare program with all of its collateral costs which show up as increased costs for medical care, education for the participants' children, food stamps, housing, the criminal justice system and many other services that are currently provided to, and often made more expensive by, the participants' being unemployed.

The current TANF welfare program was premised on the assumption that our economy would generate sufficient jobs for everyone and that to get into employment it was only necessary to be motivated and/or trained. Aid was time-limited and those receiving welfare were mandated to engage in job seeking, job development or work programs as a condition to receiving aid. Unfortunately, the current recession has demonstrated that our economy will not always create sufficient jobs and that a time-limited welfare program may be wholly inadequate to provide the safety net that had been intended.

The answer, of course, lies is providing jobs, not welfare. Our Nation knew this at the time of the Great Recession. Then cash (welfare) payments were made at the outset of the New Deal only as a temporizing action because it was easier then--as it is now--to provide payments of money rather than jobs. But this was to cease--and did cease--as soon as job projects could be organized. We should be emulating this model rather than continually extending unemployment insurance and providing welfare to those who can work.

If the money now spent on welfare and extended unemployment were combined and then augmented by the savings in the myriad other state and federal programs that exist, or whose expenses are substantially magnified, because of the corrosive effects of unemployment, the aggregate total would be sufficient, in many states, to fund all, or virtually all, of the costs of a jobs program providing, for example, 32 hours per week jobs paying minimum wage.

How substantial the savings could be is illustrated by a recent study by LA County. This study found that because of the collateral costs to the County of homelessness approximately $3.50 could be saved for every dollar spent to relieve homelessness through rental subsidies for those on general relief. While the return from an employment program would be less, there would nevertheless be substantial aggregate long term savings achieved if our Nation would replace its welfare, extended unemployment and related programs with programs providing jobs, a paycheck and dignity.

Moreover, to create jobs now it is not necessary to duplicate the CCC or the WPA. If local governmental agencies and non-profit agencies (including churches, synagogues and mosques) were told that they could employ--at no additional wage cost to the entity--persons currently unemployed, hundreds of thousands of jobs could be created quickly. Would it not be better in terms of dignity, psychology and providing a role model to one's children to say to persons applying for welfare or unemployment: "You don't need such assistance. We have for you a choice of jobs: the local hospital, library, school, church, etc." All of these agencies were starved for resources even before the current economic crisis. With the crisis, their situations have become so much worse.

This type of program would not only be better for the participants and their communities; it provides a more effective and less expensive, administrative mechanism to insure compliance. With a work/wage-based program, compliance and enforcement are virtually automatic. A person misses four hours of work; the person loses four hours of pay. There is no need to sanction the person. And, of course, a person cannot be in two places at the same time so the potential for fraud will be greatly reduced.

This approach will not only quickly create jobs, it will truly change welfare and extended unemployment as we know them because it offers those seeking jobs a job, not welfare. Statistically, unemployment will be reduced. But the real benefits will accrue to those employed--and their communities.