Journal Issue: Welfare to Work Volume 7 Number 1 Spring 1997
The Work Incentive Program and OBRA Demonstrations(1967-1986)
Propelled by the demographic and cultural changes discussed above, Congress moved away from the principle of providing support to enable mothers to stay at home, toward the theory that adults who received welfare benefits should make good-faith efforts to become economically self-sufficient. The Work Incentive Program (WIN), created in 1967, for the first time required states to establish employment and training programs for welfare recipients. These programs provided a mix of services, including job training, education, and structured job search—in which recipients carry out and report back on efforts to find work. Some WIN programs also used so-called work experience components, putting participants to work at public service agencies.14
Originally WIN was voluntary, but in 1971 the federal government mandated participation for welfare recipients with no special responsibilities at home or no preschool-age children (this latter provision meant that mothers were allowed to remain at home until their children entered elementary school). However, as would often be the case for federal welfare-to-work programs, limited resources permitted only partial translation of the mandate into practice. With a peak funding level of $395 million in FY 1980, WIN provided on average about $250 to serve each potential registrant. Operating the WIN employment and training programs cost welfare agencies more than issuing monthly benefit checks, so WIN became little more than a registration requirement for many recipients.14,15 The fact that mandating employment and training activities in exchange for benefits—and actually providing these activities—demands more resources than simply providing benefits has frustrated proponents of mandatory approaches ever since.
Administratively, WIN's combination of employment preparation with welfare created uncertainty about whether management responsibility for welfare-to-work programs should rest with the welfare system or the employment system. At both the federal and state levels, authority over WIN was divided between employment services departments that focused on work-related activities for welfare recipients, and social service departments that brokered support services such as child care to the same individuals. These cumbersome arrangements made WIN difficult to administer and awkward for families.2,14,16
Between 1979 and 1986, federal funding for WIN declined by a precipitous 41%,14 but state welfare-to-work programs gained new prominence. The heightening of visibility began with the passage of the Omnibus Budget Reconciliation Act (OBRA) of 1981. The legislation handed states some authority to reshape their individual WIN programs. For example, OBRA sharpened the definition of WIN work experience, under which recipients performed unpaid work in public agencies. Under the new rules, the number of hours participants were required to work was calculated by dividing the welfare grant amount by the minimum wage, arguably establishing a closer link between the welfare grant and the work obligation. OBRA also allowed states to use the recipient's grant funds to subsidize on-the-job training with a public or private employer.
States were also permitted to centralize program management under the sole authority of either their welfare or employment services agency. By 1986, at least half of the states had adopted single-agency management.14 Vesting responsibility for welfare-to-work initiatives clearly in one agency gave managers an impetus to pay attention to the structure and operation of welfare-to-work programs, which also became more visible to the public. Some programs became signature initiatives for welfare commissioners or governors, and some such as Greater Avenues for Independence (GAIN) in California and Employment and Training Choices (ET) in Massachusetts attracted national media attention.2
The visibility of these programs was further heightened when the private non-profit Manpower Demonstration Research Corporation (MDRC) undertook a research demonstration to study eight programs that had been reorganized under OBRA. The demonstration relied heavily on experimental design, marking the first major effort to bring state welfare-to-work programs under this kind of scrutiny. The eight states studied varied in the mixture and sequencing of their welfare-to-work services, although most emphasized low-cost structured job search. Early results reported in 1986 indicated that although the gains were not dramatic, work-focused programs for welfare recipients could increase employment and be cost-effective (see the article by Nightingale and Holcomb in this journal issue).15 Wide dissemination of these research findings further helped to publicize new state activism on welfare-to-work issues.
Despite the increased interest in welfare-to-work programs during the early and mid-1980s, welfare reform was not a major topic on the national policy agenda. The main national change in this area was a benefit reduction enacted shortly after President Reagan took office.14 Thus, it was somewhat unexpected when President Reagan's 1986 State of the Union address called for a study of how the welfare system could be changed. The administration's specific proposals attracted little support,2 but the President's endorsement of reform prompted the creation of influential welfare reform task forces at the American Public Welfare Association (APWA) and the National Governors' Association. These initiatives, in turn, fed a new wave of reform that culminated in the Family Support Act of 1988.
The APWA recommendations, published as a report called One Child in Four, were noteworthy for insisting on the centrality of children's well-being to welfare reform.17 In the 1970s and early 1980s, welfare reform discussions had focused mainly on parents' work efforts. By linking recommendations on welfare-to-work policies back to concerns about children, APWA was able to make something of a breakthrough in the way the topic was framed in national debates, at least at the time. Keeping a focus on children in welfare reform discussions has proved to be an ongoing challenge.