President Bush and Democratic presidential nominee Bill Clinton advocate "workfare" -- requiring welfare recipients to get education or job training if they want to receive benefits. But the story of the Human Development Institute, a small job-training company located in Baltimore, shows the difficulty of implementing such a policy under Washington's conflicting regulatory structure.
HDI did what it promised -- it made workers out of welfare mothers. Seventy-five percent of the 1,500 women who passed through HDI's training sessions found jobs. Despite its success, the company decided not to renew its contract with Baltimore City's Office of Employment Development. Betty Merrill, the company's owner, said she just couldn't make enough money.
As mandated by Washington, the state is attempting to get long-term welfare recipients and teen parents off public assistance and into the work force. These women are enrolled in various federally financed job training programs, which operate under stringent guidelines.
HDI had a performance contract, which meant that it was paid in increments as its trainees passed certain benchmarks. HDI received its final payment when the trainee was placed in a job. The size of the payment depended on the type of job obtained. If HDI contracted to train women to work in health care, its final payment for a trainee who got a job as a day-care worker or as a typist would be smaller than if that person was employed as a nursing assistant.
The purpose of the regulation is to ensure that job trainers don't get paid thousands of dollars and then place people in inappropriate positions. Regulators frequently cite the example of one job-training company that placed most of its trainees in car washes -- jobs those people could have obtained without any training.
It is understandable that the federal government wants to protect itself from the charlatans and crooks in the job-training field. But the federal government also wants welfare mothers to work. Companies like HDI get caught between these conflicting goals.
Flexibility is important when dealing with welfare mothers who have little or no work experience. Placing one of these women in an entry-level job with the promise of advancement is certainly better for the woman and for society than remaining on public assistance. Federal job-training guidelines need to be changed to reflect those priorities.