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The Times-Picayune

Downturn tests welfare reforms
Recession would hit disadvantaged first

10/04/01

By Laura Maggi
Staff writer/The Times-Picayune

Wanda Johnson trudged from hotel to hotel recently, filling out job application after job application, only to be told that there would be no openings until the economy picks up.

Although many job-seekers are getting the same message these days, the trips for Johnson bore a particular urgency. Her welfare benefits are set to expire in February, and the kind of temporary work she has relied upon in the past -- helping with banquets at the Ernest N. Morial Convention Center -- no longer seems promising.

"It's real scary," said Johnson, a 28-year-old single mother of three children who has been attending daily training sessions to prepare her for jobs in the hospitality industry.

The downturn in the New Orleans tourist economy after the terrorist attacks on New York, Pennsylvania and Washington has hurt the entire city, leaving many restaurants, retail stores, hotels and taxi cabs either half full or just plain empty. Many companies catering to tourists are cutting back on employee hours or letting people go.

This sudden unavailability of many entry-level, minimum-wage jobs, even if only temporary, points to a problem that policy analysts are just beginning to grapple with: What happens to the nation's so-far successful experiment to get poor, single mothers off welfare and into the work force if the economy slides into recession?

As the reverberations from the attacks dissipate, tourists could flock back to New Orleans, holding the threat of an immediate recession at bay. Yet the economy was bound to slow at some point, and state governments must figure out what welfare reform means when even more highly skilled workers are struggling to find employment.

"A downturn is going to hurt welfare recipients," said Harry Holzer, a professor of public policy at Georgetown University. "A downturn hurts the less-skilled and disadvantaged, who are the last to be hired during good times and the first to be laid off" in bad.

Already feeling the pinch

Although many advocates have complained that most women are not escaping poverty as they head to work, it's clear that Louisiana's effort to get women with children off the welfare rolls has been largely successful. In 1995, the Department of Social Services had an average of 81,722 cases per month. In August, that number was down to 23,835.

The evidence of the effect of the current economic turmoil is so far anecdotal. According to the local United Way, which channels money to nonprofits that work with the poor, member groups such as Catholic Charities and the Salvation Army have indicated they will likely need about $25,000 more per month to provide additional emergency services to help with rent payments, mortgage payments, food and other necessities.

Nonprofit groups that contract with the Department of Social Services to help welfare recipients find jobs indicated in the past couple of weeks that hotel and other tourist industry jobs have temporarily dried up, with many companies calling to cancel advertised job openings. One New Orleans welfare office reported a 20 percent uptick in the number of applicants for food stamps and cash benefits in the past two weeks compared with the per-week average since the beginning of the year.

Welfare researchers and those who work with recipients in the city are concerned about a more permanent loss of service-industry employment. Although entry level jobs do not pay well, people with limited education or work history often have been able to find positions, with minimal training, as housekeepers at hotels or as low-level restaurant workers.

For Johnson and her classmates at a training class run by the YMCA of Greater New Orleans, the city's numerous hotels had been a logical place to seek work. After attending a recent job fair, Johnson, an earnest woman who volunteers at her children's school in her free time, said most of the employers who have job openings were looking for people with more than her high-school level education or several years of relevant job experience.

"Today you need more education, that's what I tell my kids," she said.

Where's the safety net?

Though Johnson and another student, Gwendolyn Bannister, have worked before, both quit jobs to deal with personal or family illnesses. They said they fear that their uneven employment histories might make them less appealing to other kinds of industries.

For example, Bannister, a 30-year-old mother of four, recently applied at several nursing homes, an industry in which she has experience. But she did not seem to hold out much hope for success. "They ask you, ‘Why didn't you stay with that job?,' " she said, as well as performing background and credit checks.

"That is one of the reasons why these women are being referred to this kind of program," said Jessica Thomas, the job director of the YMCA program. "They need to be realistic. Instead of leaving one job, they need to learn, if there is a problem, how to cope with it."

With the withering economy, Thomas said, she advises her students to take whatever job they can find.

But what if there aren't any?

Looking at time limits that end welfare benefits for recipients after 24 months and the restrictions on unemployment insurance, many advocates for the poor are questioning whether a safety net continues to exist.

"We have about the most stringent time limits of anywhere in the country, kicking large numbers of people off monthly," said Ronald Mancoske, a professor of social work at Southern University in New Orleans who has conducted research on the state's welfare reform efforts for the Department of Social Services. Between May and October of 2001, for example, an average of 165 recipients per month were removed from the rolls after their eligibility expired.

But DSS officials counter that recipients looking for work but unable to get a job are allowed to stay on past the two-year limit. An average of 1,334 people per month between May and October were allowed to stay on the rolls, either because they were looking for work or met other exemptions, such as having a disability. Daniel Tuman, manager for the Uptown DSS office, said even those whose benefits previously expired who lose a job could receive cash assistance again as long as they are actively looking for work.

Reacting to the downturn

Ann Williamson, recently appointed the DSS assistant secretary in charge of the welfare program, said the agency has begun planning to help people who have lost or might lose their jobs because of the economy, offering assistance with getting another job, training, transportation and child care. The agency would be able to financially handle a resurgence in the rolls, she said.

Although Williamson said a wholesale reworking of policy would not be necessary, others question whether the agency needs to put more recipients through nontraditional training programs, such as one that prepares them to work as corrections officers at the Orleans Parish jail. "The government's position has been work first. I think what they may need to do is step back and say, ‘Training first, work next,' " said Nellie Stokes Perry, who runs the job search program at Catholic Charities.

If the economy tumbled into a full-fledged recession, states also could try to emulate a few more extensive welfare-to-work programs that provide community-service jobs if private-sector ones are unavailable or out of reach, such as programs in Wisconsin or New York City, Holzer said. But either the federal government or the state would have to foot the bill for that kind of effort, which is typically more expensive than paying people a monthly check.

Wanda Johnson is anxious to find a job, so she won't have to learn what the state's response to an economic crunch would be. She is working on her typing skills, hoping that even if hotel jobs remain unavailable she might find work as a receptionist.

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Laura Maggi can be reached at lmaggi@timespicayune.com or (225) 342-7315.