Work and Welfare Reform in New York City During the Giuliani Administration

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

CONTENTS

EXECUTIVE SUMMARY

I. INTRODUCTION: WELFARE REFORM IN NEW YORK CITY

II. ADMINISTRATIVE CONTROL
A. ORGANIZATIONAL RESTRUCTURING
B. INCREASING INFORMATION EXCHANGE
C. GOAL-ORIENTED POLICY
D. SUMMARY

III. WORK ACTIVITIES
A. WELFARE APPLICATION
B. PRE-EMPLOYMENT SERVICES
C. WORK EXPERIENCE
D. SUMMARY

IV. REACHING SPECIAL POPULATIONS
A. RECIPIENTS WITH MEDICAL LIMITATIONS / DISABILITIES
B. PREGNANT RECIPIENTS / NEW MOTHERS
C. RECIPIENTS REQUIRING SUBSTANCE ABUSE TREATMENT
D. RECIPIENTS IN SCHOOL
E. RECIPIENTS UNDER SANCTION / AT RISK OF SANCTION
F. RECIPIENTS NEEDED AT HOME
G. RECIPIENTS WITH LIMITED ENGLISH OR BASIC SKILLS
H. SUMMARY

V. CONCLUSIONS AND RECOMMENDATIONS

APPENDIX A: JOB CENTER DATA, NOVEMBER 2001
APPENDIX B: ENGAGEMENT OF THE WELFARE POPULATION
APPENDIX C: WEP AND OTHER JOB-RELATED PROGRAMS
APPENDIX D: CLIENT FLOW CHARTS

Tables and Charts

EXECUTIVE SUMMARY

Welfare reform became a major policy priority in New York City in the 1990s. From the time Mayor Rudolph Giuliani took office in 1994 to the time Mayor Michael Bloomberg's administration began in 2002, the City's welfare system was redefined around work and organizationally restructured. As in other parts of the country, average monthly welfare caseloads under New York's Family Assistance (FA) and Safety Net Assistance (SNA) (mainly individuals without children) programs declined by over 50 percent, from about 500,000 in 1993 to about 200,000 in 2001. This report describes the system based on a review of administrative data and extensive interviews conducted between November 2001 and January 2002 with officials and line staff within the City administration and in service provider organizations.¹ The study was not designed to determine the quality or effectiveness of services on individuals' employment outcomes or well-being, nor to examine the entire welfare system in New York City, but rather to describe the overall structure of the work components under welfare reform in the City as of the end of 2001.

New York City has more welfare recipients than any other city in the nation— one out of every 13 cases nationwide receiving Temporary Assistance for Needy Families (TANF) (FA in New York) in 2001—and represents one of the strictest systems in terms of work participation requirements. As such, the operational experiences suggest lessons important to New York City and to federal welfare policy makers implementing large scale work programs—lessons about restructuring a large and entrenched bureaucracy and about adapting priorities and programs to changing policies, economic conditions, and caseload characteristics. The findings from this study suggest important implications for New York City's further reform and for national welfare reform.

Evolution of New York City's Work-Centered Welfare Reform

Welfare reform in the City was work-centered throughout this period, but the policy focus and emphasis evolved somewhat over time.

• In the early Giuliani years (to mid-1999), the work policies in welfare reform² were characterized mainly by:
• A strong emphasis on work requirements and imposition of sanctions for recipients who did not meet those requirements. Less than 60 percent of cases with an adult in December 1994 were subject to mandatory work requirements (i.e., "engageable"), but by April-1999, 79 percent were mandatory.³ Over the same period, there was also increased emphasis on sanctioning individuals for noncompliance. The percentage of adult cases in some phase of the sanctioning process (but not yet sanctioned) went from about 8 percent in November 1996 to about 14 percent in April 1999.
• Mandatory workfare jobs. The emphasis on workfare increased in the 1990s. Able-bodied adults receiving Home Relief in New York City (the predecessor program to SNA) have long been expected to work in unpaid jobs; and in 1996 workfare was extended to parents of dependent children receiving FA. Individual recipients not employed in the regular labor market were required to report to work experience program (WEP) jobs, mainly in public agencies. By early 1999, over 30,000 persons in a given week were in "basic" WEP workfare jobs—that is, traditional unpaid workfare assignments.
• In the later Giuliani years, beginning in 1999, the City's work-centered welfare reform was characterized by:
• Continued emphasis on work requirements and sanctioning. Most adults on welfare continued to be subject to work requirements, and "universal engagement" became a top management priority. About 73 percent of cases with an adult on welfare in the City in the last week of November 2001 faced mandatory work requirements (i.e., were "engageable") and 13 percent of adult cases were in the process of being sanctioned; another 9 percent had actual sanctions in effect.
• A shift in WEP, allowing and supporting more education and training rather than just basic workfare. In the last week of November 2000, about 25,000 persons were in WEP assignments, but only about 25 percent of those were in basic WEP. The other 75 percent were in WEP assignments that combined work experience with some other activity such as job readiness services, short-term training, or education—usually three days a week of work experience or workfare (21 hours) plus two days of some other activity (14 hours). This is often referred to as the "three-plus-two" model for full-time activity, defined as 35 hours a week. In comparison, in the first week of April 1999, nearly 90 percent of WEP assignments had been of the basic workfare type.
• Special work experience and other work-oriented programs and initiatives for certain populations, including those with more serious barriers to work. In fiscal year 2001, about 70,000 individuals were involved at some point with one or more special programs; and many were also required to participate in a workfare component. Each special program includes some services designed specifically for individuals with certain needs or situations.⁴ Special programs serve persons with substance abuse problems, physical or mental health limitations, limited English ability or reading skills, persons in the sanction process, welfare recipients in college, pregnant mothers, and mothers of newborns.

Administrative and Management Changes and Performance-Based Contracting

In order to implement reform, New York City's Human Resources Administration (HRA) embarked on major organizational changes in the 1990s to centralize and standardize procedures, improve data and reporting systems, and increase accountability. All of the changes were intended to help accomplish the stated objectives of work-centered welfare reform policies.

• Conversion of local welfare offices into Job Centers. To change the culture and priorities within local offices and to implement the new work-centered policies, local welfare offices were renamed Job Centers, and the participant flow was changed so that individuals applying for welfare immediately were required to begin looking for work or engage in other activities. Most line staff positions were reclassified as Job Opportunity Specialists (JOS), which combined the functions of eligibility and welfare-to-work caseworker into one position. Finally, many senior level staff were recruited from outside HRA and given clear mandates about employment objectives.
• Local Job Centers. After major opposition, court challenges, and a two-year moratorium, 30 Job Centers where individuals can apply for FA, SNA, and other benefits were operating by 2001. (Additional centers process requests for only food stamps or medical assistance.) Six new HRA regional offices were created to oversee the Job Centers. Recipients subject to mandatory work requirements are required to report to workers in their designated Job Center, who then refer clients to various HRA-contracted employment vendors. The welfare application process emphasizes job search before the case is actually approved for benefits (to divert some from going on welfare) and intensive verification and fraud reviews.
• Specialized Job Centers for special populations. The administrative reorganization included establishing a special Job Center in lower Manhattan. Some recipients with documented special needs (e.g., substance abuse problems or medical conditions) must report to the Special Needs Job Center.
• Performance-Based Contracts for Service Delivery. A key component of the New York City welfare reform plan involves contracting out for employment-related services rather than using local HRA office staff to provide those services, which had been the approach in the late 1980s and early 1990s.
• Between 1994 and 1999, HRA had agreements, arrangements, and contracts with dozens of separate programs and organizations that provided various employment-related services, agencies that sponsored welfare recipients in WEP work assignments at their facilities. There were contracts with over 80 vendors that provided employment and training services (most funded by the Job Training Partnership Act (JTPA) and the Workforce Investment Act (WIA), which replaced JTPA).
• In 1999 and early 2000, HRA consolidated service vendors under 15 primary contracts to provide two kinds of employment services: Skills Assessment and Job Placement (SAP) for TANF applicants, and Employment Services and Placement (ESP) for TANF recipients. The prime "super" contracts each included several subcontractors and were issued to provide services funded by a range of sources under the authority of HRA: FA, SNA, and adult programs funded by the Workforce Investment Act.
• Vendor contracts are performance-based, with payment milestones reflecting job placement, retention, retention in higher-wage jobs, and case closings.
• New Management Data, Performance, Case Processing, and Reporting Systems. New automated data systems were implemented to track contractor, Job Center, program, and citywide performance against HRA-established goals, objectives, and benchmarks, most of which relate to employment—NYCWAY (case tracking), VENDORSTAT (contractor reporting), and JOBSTAT (Job Center reporting). Many case processing functions also became highly routinized or automated, including referrals to new HRA-contracted service vendors, assignment to WEP jobs, tracking compliance with work requirements and attendance in activities, and sanctioning clients who do not comply.

Conclusions and Implications

The scope and scale of change in New York City's welfare policies in the 1990s were dramatic and wide-ranging. Without question the City's welfare reform is work-centered, with strong emphasis on ensuring that all able-bodied adults are subject to work requirements, rapid imposition of sanctions for those who do not comply, and assignment to WEP jobs for those who are not employed in the regular labor market. Over the decade, however, the types of work activities acceptable to meet the work requirements have changed, and by 2001, most WEP assignments included some type of education, training, or other interventions as well as unpaid workfare or work experience.

New York City has undertaken complex system-wide changes as part of its welfare reform strategy. As in any major systemic change, especially in a jurisdiction as large as New York, there are different perspectives on what the changes have actually been and how successful they have been. Understanding the various issues and perspectives is important because together they represent the reality of the emerging system in the City.

HRA central office administrators are generally pleased with the progress made towards implementing strong work requirements, modernizing the management information systems, restructuring local offices into Job Centers, and streamlining the vendor contracting system. Throughout the HRA bureaucracy, there is general agreement with the basic principles of work-centered welfare policies. Current vendors and providers—many of which are community- and faith-based organizations— understand HRA's work-focused policies, are committed to HRA's contract performance criteria, and welcome the opportunity for work as contractors or subcontractors.

However, there are also concerns about the work-centered policies. Some advocates and community groups continue to worry that the strict procedures and work requirements as well as the sometimes complicated logistical arrangements involved in traveling among offices, often across boroughs, may hinder some eligible individuals from receiving benefits and services. Job Center staff generally agree with the work focus of welfare reform, but several expressed concern with the effects on participants and frustration with their jobs. Some JOS workers, for example, feel that they primarily processing paperwork, impose work requirements, refer clients elsewhere, and initiate automated sanctions, rather than provide employment or related services directly (much of the employment casework function is now performed by outside vendors). A common concern expressed throughout the system is that the strict work-focused welfare reform objectives were much easier to accomplish a year ago. For example, as all adults remaining on welfare are being mandated to meet work requirements, the individual programs are serving include more who have substantial barriers to employment. And the economy in 2002 is not as strong as in the late 1990s, so individuals may be having more difficulty finding regular jobs. Some vendor staff and a few Job Center staff indicated they are less comfortable than they were a year ago with the strict requirements, reluctant to take quick actions against individuals who appear to have more problems in their lives, and would like to be able to offer their clients more education and training options.

Active advocacy is part of the history and fabric of New York City. While much of the evolution in welfare policy and programs in the 1990s reflected deliberate plans on the part of HRA administrators, the concerns raised by the advocacy community undoubtedly maintained a focus on various issues, particularly those related to service and benefit access, health, safety, and equity; and those concerns that involved judicial action contributed to the program as it now exists.

This study suggests a few issues City administrators might wish to consider as they refine policies.

• Communicate current priorities. It seems clear that the message about work and work requirements has been communicated throughout the HRA bureaucracy and its vendor network. The same attention should now be given to communicating and reinforcing the objectives of the next stage of welfare reform, which is necessarily focusing on alleviating barriers to work and providing special interventions to improve skills and employability—beyond workfare alone and beyond immediate job placement.
• Streamline client pathways. The implementation of work requirements and the development and support of specialized targeted programs are key aspects of the City's work initiatives for welfare recipients. In order for the various programs to achieve maximum effectiveness, attention should be given to the logistics of program operations that may be more complicated than necessary—such as scheduling and locating intake and various services and activities or required assignments in ways that minimize client travel time, or coordinating access to benefits by individuals in special programs who now may have multiple case workers/staff.
• Improve skills development strategies. In the early 1990s, the top priority was to enforce work requirements. It is clear that there is now also increasing attention to skills development and special services for those with barriers to employment. If improving employability and long-term economic independence is a priority, then it will be important to consider how the various work activities and programs actually contribute to skills development. Several of the special programs are quite new, have particular expertise in providing special treatment and other services, but would benefit from developing more expertise specifically related to employment and skills. The BEGIN Managed Program, for example, has for many years focused on employment, education, and skills training, and that experience might be helpful to other newer programs. In addition, this study did not examine the effectiveness of services or quality of programs. HRA should consider formal evaluations of the impact of various programs and services on skills development, employment, and earnings.
• Continue technological and staff development. The automated management information and performance systems represent a major improvement in the use of technology in HRA. The next challenge may be to upgrade the technological capabilities in local Job Centers to allow all managers and staff, as well as vendors, to use the technology more efficiently—not just for case processing and tracking outcomes, but also for accessing labor market information and conducting case management, including identifying and tracking job and training opportunities and services, and coordinating benefits and services for individual clients.

The experience of New York City over the past decade also has important implications for the current national dialogue on the reauthorization of welfare reform, and to states and other jurisdictions proceeding with their own reform strategies.

• Placing emphasis on strong work requirements and on skills development need not be incompatible. In New York City, where the clear priority is on imposing and enforcing strong work requirements, administrators have also recognized the need for initiatives that aim to improve skills and employability or alleviate particular barriers to employment. This has primarily been done by contracting with specialty vendors for targeted interventions with special needs populations, while simultaneously continuing to restructure and improve core welfare procedures in HRA offices. It is possible that over time more of those remaining on the rolls may require intensive developmental services in order to become permanently employed. The "three-plus-two" strategy is one example of how to combine work and skills development. Longer-term training can also be incorporated into that framework.
• Flexibility—e.g., on work requirements and defining work activities—is critical for reaching locally defined objectives and priorities. What was begun in 1993 had to be modified by 1999 and HRA seems to be embarking on another modification in 2002. Once New York City's caseload decline leveled off, administrators revamped their program approaches to allow a broader range of activities to "count" towards fulfilling the work requirement, rather than just regular employment or unpaid workfare. Similarly, while the underlying objective is to simulate full-time work, the City allows vendors and programs some flexibility around defining full-time work (i.e., 30-35 hours a week), which is often necessary to accommodate scheduling constraints as well as competing demands of parents with young children and individuals with other special needs. Federal and state policies under TANF include important flexibility for New York City to adjust its programs within the framework of strong work-focused core policies. The City responded by implementing a highly decentralized network of special programs operated by a range of organizations, including community-based nonprofit entities, faith-based organizations, and public higher education institutions, allowing each to focus on its particular areas of expertise.
• Management, data, and performance measurement systems are central to achieving goals. Like many jurisdictions, the data and management systems in New York City in the 1980s were outdated and inadequate for monitoring progress towards welfare reform goals and for managing a complex system of service contractors. HRA made technology improvement a high priority in order to track whether the agency, its local offices, and its vendors were making satisfactory progress. This was no small undertaking and required a major commitment of resources, staff, and management attention. While the information systems are still being perfected, they have allowed HRA central administrators to communicate the employment goals and priorities, and institutionalize the use of the data for ongoing regular management oversight.

Notes

1. The results in this report are based on qualitative and quantitative information compiled from management information system data, reports and documents, and interviews with nearly 100 administrators and staff in the Human Resources Administration (HRA), local HRA offices, programs, and community organizations.

2. There were also non-work priorities, which are not addressed in much detail in this report (e.g., diverting or deterring individuals from receiving welfare).

3. HRA weekly management reports began the first week in April 1999. The latest report used in this study was for the week of November 25, 2001. The various weekly engagement data provide point-in-time snapshots of the caseload and specific weeks are used and referred to throughout this report.

4. The actual unduplicated number of individual participants across special programs was not compiled in this study. Furthermore, it was not possible in this study to determine the intensity of services offered, the number of participants who received intensive services, or the length of time for which they participated.

This report is available in its entirety in the Portable Document Format (PDF), which many find convenient when printing.

Usage and reprints: Most publications may be downloaded free of charge from the web site and may be used and copies made for research, academic, policy or other non-commercial purposes. Proper attribution is required. Posting UI research papers on other websites is permitted subject to prior approval from the Urban Institute—contact [email protected].

If you are unable to access or print the PDF document please contact us or call the Publications Office at (202) 261-5687.

Disclaimer: The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. Copyright of the written materials contained within the Urban Institute website is owned or controlled by the Urban Institute.