LAST AUG. 22, President Clinton made good his promise to "end welfare as we know it" by signing into law the "Personal Responsibility and Work Opportunity Reconciliation Act of 1996." He heralded the new law as "the beginning of a new era in which welfare will become what it was meant to be: a second chance, not a way of life."
Like many big-city mayors, I believe that changes in the welfare system were long overdue. I agree wholeheartedly with the president that it ought to be a system that is transitional and moves people to independence, not to prolonged dependence. Too often, the old welfare system failed on both counts. Even as I recognize the failings of the old system, I know that we face a daunting challenge in implementing the new welfare reform law in Baltimore.
Under the new law, almost all adult welfare recipients must find work or be in some kind of "work activity" (such as on-the-job training or a government-subsidized community service job) within two years or they lose their benefits. Further, the law sets a lifetime public assistance limit of five years for most individuals. For Baltimore, that's a tall order indeed.
Baltimore carries almost half the state's welfare caseload, about 33,000 cases. From January 1995 to November 1996, reflecting national trends, that caseload declined by almost 17 percent. Even if this downward trend continues, and even allowing for the 20 percent of those who can be exempted under the law, the Baltimore City Department of Social Services forecasts that we still will have to find jobs or work activities for an estimated 12,500 people by January 1, 1999.
Two factors further complicate this task. Baltimore has the highest unemployment rate in the state (6.7 percent). As of last December, more than 21,000 unemployed people were actively looking for work. The city also has the state's highest percentage of people who have been on welfare five years or longer (26 percent of our caseload), and studies show that the longer people are on welfare, the more problems they have getting off.
The magnitude of the challenge before us in finding work for so many people who have relied on public assistance is giving me a lot of sleepless nights. These aren't just numbers. These numbers reflect real people with real problems, real needs, and real hopes for a better life for themselves and their children.
I'm concerned about whether the new law truly will enable them to achieve a better life, or whether it will drive them deeper into poverty. I'm concerned about day care, transportation and worker-displacement issues.
My overarching concern is that, given the rate of job growth in Baltimore in recent years, there are simply not enough jobs to absorb all the people who will be moved off the welfare rolls within the short period stipulated by the law.
According to the Regional and Economic Studies Institute at Towson State University, the rate of job growth in 1995 in the types of industries and businesses that can absorb low-skill, entry-level workers was 0.6 percent in Baltimore City, and 1.5 percent in the Baltimore region.
Twelve other mayors and I met with Clinton in December to discuss some of our concerns and deepest fears about implementing the new welfare law. The president expressed his confidence that with a growing economy and strong cooperation among local and state governments and the private sector, we can succeed in moving large numbers of people off the welfare rolls. He made it clear that he wanted us to do everything we could to make the law work. Based on his expression of confidence, I am committed to doing all that I can to make it work.
I have told my agency heads that we have to show employers that hiring people coming off welfare makes good business sense. Businesses can benefit directly through their eligibility for state and federal tax credits if they hire welfare recipients, as well as through grant diversion. Under grant diversion, the public assistance check goes directly to the employer willing to train and hire a welfare recipient. There are a host of indirect benefits for businesses when they hire people on public assistance.
As more people move from welfare to work, they will be contributing to the city's tax base and improving communities.
By making people more self-sufficient and productive, the entire city gains.
Since the law went into effect in October, the heads of the city's human services agencies have been working aggressively to move people from welfare to work.
The Baltimore City Department of Social Services (BCDSS), the city's lead agency for welfare reform, has established a new job development unit. The unit's staff has met with more than 800 businesses in the Baltimore region to discuss and develop job opportunities for welfare recipients. To provide an array of services for welfare recipients, it also has established partnerships with such organizations and institutions as the Baltimore Urban League, Goodwill Industries, Baltimore City Community College, and Sojourner-Douglass College. Between October and December 1996, the unit placed 1,000 recipients in jobs at an average wage of almost $6 an hour.
In addition, BCDSS has agreements and contracts with the Office of Economic Development (OED) and Baltimore Reads, the city's lead agency to improve literacy, to provide services to help move people from welfare to work.
OED, for instance, operates two full-scale career centers (at 201 S. Arlington Ave. and 100 W. 23rd St.) to help welfare recipients find jobs. Last year, the agency placed more than 2,000 welfare recipients in jobs at an average wage of $6 an hour. It has set a similar goal for this year. In addition, OED is helping 1,000 long-term welfare recipients gain work experience through placements in the public or non-profit sector. Participants receive a modest stipend, begin to develop a work history and often have an entree into a regular job. Since 1994, more than 300 welfare recipients have found permanent jobs with such employers as the State Department of Motor Vehicles and the Baltimore City Health Department following such placement.
The Housing Authority of Baltimore City, Empower Baltimore Management Corp., and the previously mentioned Baltimore Reads are actively involved in job training and job development for welfare recipients. And each of these agencies has success stories to report of people who have moved from welfare dependency to self-sufficiency.
My administration's welfare-to-work initiatives go hand in hand with our overall efforts to promote the kind of economic development that fosters job growth. A case in point: We are pushing hard to have "brownfields" legislation passed, which would give businesses incentives to clean up underutilized industrial sites, because we recognize the great job potential of these sites. Indeed, the city's Planning Department estimates that 7,500 to 10,000 new jobs could be created in Baltimore if brownfields are cleaned up and redeveloped.
But even with such economic development initiatives and with our aggressive efforts to prepare people on public assistance for work and move them into jobs, making welfare reform work is still an extremely daunting challenge for Baltimore.
It will require a tremendous effort to grow the economy so that the jobs will be there. It will require businesses to make a strong commitment to hire people on welfare. It will require that people moving off welfare have the skills and attitudes that will make them good workers. It will require that they have the support that is necessary, including quality, affordable day care and health care, so that they and their families can thrive, not just barely survive.
Only a strong partnership among the city, the state, and the business community can make all these things happen.
Without such a strong partnership - and especially without the commitment of the business community to create more jobs - I fear this new welfare reform will be a ticking time bomb.
Kurt L. Schmoke is the mayor of Baltimore.
Pub Date: 2/16/97