[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]


 
                   SUBSIDIZED JOB PROGRAMS AND THEIR

                   EFFECTIVENESS IN HELPING FAMILIES

                     GO TO WORK AND ESCAPE POVERTY

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                 OF THE
                                 
                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 30, 2014

                               __________

                          Serial No. 113-HR13

                               __________

         Printed for the use of the Committee on Ways and Means
         
         
         
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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
KENNY MARCHANT, Texas                LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

        Jennifer M. Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel

                                 ______

                    SUBCOMMITTEE ON HUMAN RESOURCES

                DAVID G. REICHERT, Washington, Chairman

TODD YOUNG, Indiana                  LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania             JOHN LEWIS, Georgia
TIM GRIFFIN, Arkansas                JOSEPH CROWLEY, New York
JIM RENACCI, Ohio                    DANNY DAVIS, Illinois
TOM REED, New York
CHARLES W. BOUSTANY, JR., Louisiana


                            C O N T E N T S

                               __________

                                                                   Page

Advisory of July 30, 2014 announcing the hearing.................     2

                               WITNESSES

Sandra Collins, Assistant Manager, Goodwill Olympics and Rainier 
  Region, Testimony..............................................     7
Amy Dvorak, Employer Relations Coordinator, New York State/Erie 
  County Department of Social Services, Testimony................    13
Robert Doar, Morgridge Fellow, Poverty Studies, American 
  Enterprise Institute (AEI), Testimony..........................    19
Dan Bloom, Director, Health and Barriers to Employment Policy 
  Area, MDRC, Testimony..........................................    26

                       SUBMISSIONS FOR THE RECORD

APHSA-NASTA......................................................    51



                   SUBSIDIZED JOB PROGRAMS AND THEIR

                   EFFECTIVENESS IN HELPING FAMILIES

                     GO TO WORK AND ESCAPE POVERTY

                              ----------                              


                        WEDNESDAY, JULY 30, 2014

             U.S. House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Human Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:03 p.m., in 
room 1100, Longworth House Office Building, the Honorable Dave 
Reichert [Chairman of the Subcommittee] presiding.
    [The advisory of the hearing follows:]

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

                    SUBCOMMITTEE ON HUMAN RESOURCES

                                                CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE
Wednesday, July 30, 2014
No. HR-13

                 Chairman Reichert Announces Hearing on

            Subsidized Job Programs and Their Effectiveness

                     in Helping Families Go to Work

                           and Escape Poverty

    Congressman Dave Reichert (R-WA), Chairman of the Subcommittee on 
Human Resources of the Committee on Ways and Means, today announced 
that the Subcommittee will hold a hearing on subsidized jobs programs 
and their effectiveness in helping families escape poverty. The hearing 
will take place at 2:00 p.m. on Wednesday, July 30, in room 1100 of the 
Longworth House Office Building.
      
    In view of the limited time available to hear from witnesses, oral 
testimony at this hearing will be from invited witnesses only. 
Witnesses will include individuals with experience administering 
subsidized employment programs and experts who have studied the 
effectiveness of these programs. However, any individual or 
organization not scheduled for an oral appearance may submit a written 
statement for consideration by the Committee and for inclusion in the 
printed record of the hearing.
      

BACKGROUND:

      
    Helping people find full-time jobs is the best way to reduce 
poverty. Over 97 percent of individuals age 18-64 who work full-time 
have earnings that place them above the poverty line, while almost one-
third of individuals in that age range who do not work are in poverty. 
Working full-time also helps individuals move up the economic ladder. 
Of households in the bottom 20 percent of the earnings distribution, 
fewer than one in five had a household member working full-time, and 
more than 60 percent included no one who was working. Households in the 
top 20 percent of earners had on average two household members working, 
in almost all cases full time.
      
    The major accomplishment of the 1996 welfare reforms was to help 
more low-income families and individuals find jobs, so they could 
escape poverty and dependence on government benefits and move up the 
economic ladder. Since the work-based welfare reforms were enacted, the 
employment rate of adults receiving Temporary Assistance for Needy 
Families (TANF) welfare benefits has more than doubled. Child poverty 
rates fell dramatically in the years immediately after welfare reform, 
while welfare caseloads declined by 60 percent through June 2013. In 
addition to expecting more welfare recipients to work and prepare for 
work, welfare reform provided more flexibility for States to support 
work by providing child care benefits, transportation assistance, and 
other work supports.
      
    While welfare reform moved many low-income families into work, more 
can be done to help welfare recipients work and escape poverty. States 
now report spending only a small share of their TANF funding--6 percent 
in FY 2013--on activities designed to get welfare recipients jobs. 
Although States are required to engage 50 percent of welfare recipients 
in work or work-related activities, 22 States face effectively no such 
requirement because of loopholes in the law. Further, in the most 
recent State data on work performed by welfare recipients (FY 2011), 
States reported that almost 60 percent of adults performed no hours of 
work or work-related activities, such as education or training.
      
    A number of States have taken steps to more quickly move welfare 
recipients into the workforce, in some cases providing wage subsidies 
to employers to hire these individuals so they can earn a paycheck 
instead of receiving welfare. State approaches to subsidizing 
employment have been varied, including by the type of recipient placed 
in subsidized jobs, whether the placement is in the public or private 
sector, the length of the subsidy, and the amount of the subsidy. 
Specific Federal funding for this purpose was provided under the 2009 
economic stimulus law (P.L. 111-5), under which $1.3 billion was spent 
on subsidized jobs programs between 2009 and 2010. Placing welfare 
recipients in subsidized jobs can help these individuals gain skills 
that will help them find and maintain full-time employment. However, 
because research on the long-term impacts of subsidized jobs is mixed, 
it is important to review the structure of different subsidized jobs 
programs to determine which features appear most likely to make these 
programs successful.
      
    In announcing the hearing, Chairman Reichert stated, ``Our nation's 
welfare programs should be focused on one thing'' helping people in 
need find work, so they can escape poverty and move up the economic 
ladder. The 1996 welfare reforms achieved this goal by requiring States 
to get welfare recipients working or preparing for work. One of the 
ways States have done so is by connecting recipients quickly with 
employers, sometimes by subsidizing their wages. Welfare 
reauthorization is on hold as the Administration continues to insist--
despite 15 years of TANF law and precedent to the contrary--that it can 
waive the critical TANF work requirements. So now is a good time for us 
to review how these subsidized job programs are working. I look forward 
to hearing more about these State efforts so we can improve our 
nation's welfare system and move more people out of poverty.''
      

FOCUS OF THE HEARING:

      
    This hearing will focus on State subsidized jobs programs designed 
to move individuals from welfare to work, including what research 
reveals about the impact of such programs on employment and earnings.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Please click here to submit a 
statement or letter for the record.'' Once you have followed the online 
instructions, submit all requested information. Attach your submission 
as a Word document, in compliance with the formatting requirements 
listed below, by August 13, 2014. Finally, please note that due to the 
change in House mail policy, the U.S. Capitol Police will refuse 
sealed-package deliveries to all House Office Buildings. For questions, 
or if you encounter technical problems, please call (202) 225-1721 or 
(202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word format and MUST NOT exceed a total of 10 pages, including 
attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons, 
and/or organizations on whose behalf the witness appears. A 
supplemental sheet must accompany each submission listing the name, 
company, address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available 
online at http://www.waysandmeans.house.gov/.

                                 

    Chairman REICHERT. The committee will come to order.
    I had a chance to visit briefly with our witnesses. They 
are so excited to be here, and we are excited to have you. A 
couple of them are a little nervous, so I told them we would go 
easy on them. So it will be no big deal.
    I want to thank you again to our guests and witnesses for 
joining us today for this important hearing to review what we 
can do to help more parents go to work and help families escape 
poverty. We clearly have lots of work to do as we enter the 6th 
year of the so-called Obama recovery. Not only has this been 
the worst recovery for jobs and growth ever, but record numbers 
of Americans are not working or working only temporary jobs. 
More people dropped out of the workforce during this recovery 
than during the recession that preceded it. And the median 
household income is down over $2,000 since this recovery 
started. All of which may be why nearly half of Americans think 
that the U.S. is still in a recession.
    Over 5\1/2\ years after Democrats' trillion-dollar stimulus 
plan, Americans are still asking, where are the jobs? Make no 
mistake, work is not only what parents need and what they are 
looking for, it is the only real path out of poverty.
    We know this implicitly, and the data confirms it. Less 
than 3 percent of full-time workers are in poverty, while the 
poverty rate for people who don't work is 10 times higher. Work 
also addresses inequality, the inequality of households in the 
bottom 20 percent of the earnings ladder. Less than one in five 
had a household member working full-time, and more than 60 
percent had no one in the household who was working at all. In 
contrast, households in the top 20 percent of earners had an 
average two workers in the household, with almost all of them 
working full-time.
    Looking back, we see the 1996 welfare reforms confirm the 
centrality of work to reducing poverty. Since the work-based 
1996 welfare reforms were enacted, the employment rate of 
welfare recipients more than doubled and child poverty rates 
fell dramatically and are still below the level in the early 
1990s. Welfare caseloads have declined by 60 percent. And still 
in many places loopholes have allowed States to keep welfare 
recipients on the rolls too long without working, reducing 
their income and increasing their dependence on taxpayers.
    States now spend only a small share of their TANF funding, 
6 percent in 2013, on activities designed to get welfare 
recipients back to work. The most recent data from States for 
2011 shows almost 60 percent of adults on TANF who were 
required to work had no reported hours in any work or work-
related activity.
    So the question is this, how can we get more low-income 
adults into jobs so they can better support their families and 
move up the economic ladder? And as we will learn in the 
testimony today, one approach to achieving this goal is through 
supporting subsidized jobs. For years, some States have placed 
welfare recipients in subsidized jobs, providing payments to 
public and private employers to hire welfare recipients so they 
earn a paycheck instead of just collecting a welfare check.
    The goal of this approach is for the job to continue even 
after the subsidy ends, but it doesn't always work that way, 
and raising concerns about effectiveness and cost of such 
efforts compared to other approaches is legitimate. We hope to 
review those sorts of issues today to determine how these types 
of programs can help low-income families escape poverty.
    The bigger picture is important, too. If we want to promote 
subsidized jobs or any other way of helping welfare recipients 
go to work, we simply will not make any progress while the 
administration continues to insist it can waive precisely these 
sorts of policies. The irony is, when the administration 
announced its TANF waiver policy 2 years ago, we were working 
together across party lines to close loopholes that weaken 
welfare back-to-work rules.
    Those loopholes remain wide open today. We can and should 
revisit ways to close those loopholes along with discussing 
ways to implement ideas like promoting subsidized jobs in the 
months ahead. But if the administration continues to insist it 
can simply waive any of the rules Congress creates, it is very 
unlikely that that will happen.
    I look forward to today's testimony and our continuing work 
together on ways to help low-income parents find the work they 
so desperately need and want.
    And, Mr. Doggett, you are now recognized for your opening 
statement.
    Mr. DOGGETT. Thank you so much, Mr. Chairman.
    I believe that our objective should be to encourage 
innovation without wasting taxpayer money on programs that 
don't work that are not cost effective. There is not enough 
TANF block grant money available now to adequately fund 
existing programs designed to help poor people secure stable 
employment and that is despite the fact that each year TANF 
continues to serve a smaller and smaller share of poor 
families.
    Since no additional resources are being proposed to help 
lift people out of poverty, we are really in a zero-sum game 
situation here. Every dollar that we shift to subsidize 
employment means a dollar less for some other initiative. That 
doesn't mean it is not a good idea to shift money into 
subsidized employment. It just means that we need to scrutinize 
what we are moving it into carefully and what we are moving it 
out of carefully. Our decision should be guided by what the 
evidence shows, not what ideology dictates. Before we divert 
more TANF funds to any particular initiative, let's ensure that 
we have that kind of objective evidence to justify how the 
money is being allocated.
    Probably the greatest potential for subsidized employment 
is for those individuals who face the greatest barriers to 
being hired: ex-offenders, those with serious physical or 
mental health issues, long-term unemployed, and older workers 
who often face discrimination. I know that one of our witnesses 
that I look forward to hearing from, Ms. Collins, will tell us 
about the transformative effect that such a program had on her 
life, and I am sure that is true of many others.
    Overall, however, the evidence is modest and it is mixed as 
to whether subsidized employment programs are actually 
effective, cost effective, in helping a substantial number of 
poor people secure a stable job at a wage that will help them 
escape poverty. Certainly the offer of free or almost free 
taxpayer-financed labor would have appeal to most any business.
    The question is whether when the taxpayer subsidy ends, 
does the job end also or does it truly open the way to long-
term employment? Does subsidized employment offer an 
opportunity or is it just another windfall? I think the verdict 
is largely still out. Probably to ensure more opportunity 
through subsidized employment where it does appear to work, we 
need some strong safeguards in place to protect the taxpayer 
investment that is at stake.
    Today's hearing is another way to scrutinize the potential 
of expanding subsidized employment programs to more people, and 
it deserves the same care and attention that this subcommittee 
has applied in previous hearings to other types of public 
expenditures. I note Mr. Bloom's testimony indicates that most 
subsidized employment programs that have been tested have not 
produced the sustained increases in unsubsidized employment we 
would like to see, and Mr. Doar writes that in his experience 
running a subsidized employment program sometimes proves to be 
an expensive intervention that was not necessarily more 
effective than some less costly strategies at trying to get 
people from welfare to work.
    Today is an opportunity to learn more about these programs 
and their effectiveness. It will also help us to determine 
whether we can make decisions to support programs based on 
evidence or whether we will simply rely on ideology as a guide.
    I agree that the TANF program, set to expire at the end of 
September, very soon, is long overdue for serious examination. 
I voted for the 1996 welfare reform law that established TANF 
because I support reducing poverty by promoting work. It is 
just a matter of determining what the most effective way to do 
that is. And indeed this law, in combination with a very strong 
economy and improvements in the earned tax credit, did help 
prepare more individuals into the workforce back in the 1990s.
    Unfortunately, nearly all of the progress that we 
experienced from the law in increasing employment levels for 
single mothers or reducing poverty for children ended in about 
2000, and ever since then most of the major trends have been 
negative. Four years of success followed by 14 years of 
shortcoming is not the greatest record.
    Why are we seeing this failure? Well, I think to start 
with, the amount of resources available for TANF, the size of 
the block grant has declined in real terms by almost a third 
since 1996. And some States, including my home State of Texas, 
have seen a much sharper decline because Congress refused to 
renew TANF supplemental grants that expired in 2011.
    As I said earlier, a smaller and smaller portion of poor 
families, poor children, receive TANF, and when folks aren't 
receiving TANF, they are not participating in TANF work 
activities like working, education, training, so forth.
    I look forward to the testimony of each of you so that we 
can learn how to make genuine improvements that really make 
effective use of our taxpayer money to accomplish the objective 
of helping people move from welfare to work and stay in that 
workforce with a living wage.
    Thank you.
    Chairman REICHERT. Thank you, Mr. Doggett.
    And without objection, each member will have the 
opportunity to submit a written statement and have it included 
in the record at this point.
    I want to remind our witnesses to limit their oral 
statements to 5 minutes. And, however, without objection, all 
the written statements and all your written testimony will be 
made a part of the permanent record.
    On our panel this afternoon we will be hearing from Sandra 
Collins, assistant manager of Goodwill Olympics, Rainier 
Region; Amy Dvorak, employer relations coordinator, New York 
State/Erie County Department of Social Services; Robert Doar, 
Morgridge Fellow, Poverty Studies, American Enterprise 
Institute; Dan Bloom, director, Health and Barriers to 
Employment Policy Area.
    Now, the first witness we will have testify today is one 
that I am personally proud to have here and to have the 
privilege to introduce. Ms. Collins came all the way to 
Washington, D.C., from Washington State to be here today to 
share her story, and it takes a lot of courage to share a story 
that has been a struggle. I think all of us can relate to 
stories within our own families that maybe get retold and told 
and maybe you are going through a current story in your own 
family that you can identify with. But those stories build 
character, build strength, and build a person like Sandra.
    And we are so happy to have you here to share your success 
with us, and as Mr. Doggett said, to help us, members of this 
committee, subcommittee, and members of the full committee 
understand what we can do to help people get back to work and 
off welfare and have a smile on their face like you have right 
now. And I know you are a little nervous, but you are going to 
do just fine. So you are recognized for 5 minutes, Sandra. 
Welcome.

   STATEMENT OF SANDRA COLLINS, ASSISTANT MANAGER, GOODWILL 
                    OLYMPICS, RAINIER REGION

    Ms. COLLINS. Chairman Reichert, Ranking Member Doggett, and 
Members of the Committee, it is an honor for me to sit before 
you today to tell you my success story. I am Sandra Collins, 
and I am now the assistant manager at Goodwill Outlet store in 
Kent, Washington. I am about to become a homeowner. I have come 
a long way.
    In April of 2007, my life looked very different. I was 
homeless, living in a shelter with two children, had been a 
meth abuser for 17 years, a victim of domestic violence, and I 
felt alone. I had burnt all my relationships with my family and 
friends, I had zero credit, no high school diploma, and a stack 
of legal offenses that kept me from a driver's license. My 
self-worth and confidence were at all-time lows. It was time 
for a change, but I didn't know how to get it started.
    I went to apply for TANF and enrolled in the WorkFirst 
Community Jobs program. I was assigned to my caseworker, Cindy, 
and she was the first of many trusting relationships for me. I 
was closed about my problems with her at first for fear of 
having my children taken away, losing my financial assistance, 
or being put in jail. My license had been suspended, and I 
didn't tell Cindy that I was homeless. It took a few months to 
start to build trust.
    Cindy got me placed into a work program at a Goodwill 
outlet store close to my GED class site. It turned out to be 
the best job for me and would change my life permanently. 
Without a car and living 2.5 miles from the bus stop, my 
commute was 4 hours a day round trip, but I was punctual and I 
worked hard. I even volunteered to do additional work. Things 
were real dark, but there was a glimmer of hope breaking 
through.
    I knew the power of having a job would help me escape 
poverty. My manager was willing to flex with my commute 
schedule. Not only did I expand my work skills, but coworkers 
showed real happiness to see me. I felt special and important. 
I had meaning in my life and gained self-worth. It made me want 
to return every day.
    Cindy enrolled me in a program that provided me with 
transportation to the bus stop, making my commute so much 
shorter. Cindy's role as a case manager was critical. 
Eventually I did open up about my problems, and Cindy provided 
resources or solutions for all of them. I didn't feel as 
helpless or alone anymore. She even helped me get my license 
back. When the Community Jobs program ended, I had my GED, and 
my Tacoma outlet store manager, impressed with my hard work, 
recommended me for the perfect full-time job at a Goodwill 
store.
    I remember my first day very clearly, January 15th, 2008. I 
started at the Lakewood Goodwill as a production worker. That 
April, the original Tacoma outlet store had an opening and 
asked me to return. It felt like a great accomplishment to be 
wanted back. I remember thinking that I am somebody.
    In July of 2008, I was promoted to supervisor at the Tacoma 
outlet store. Work had changed my life. The people were 
supportive, as I worked hard and proved myself. While working, 
other Goodwill services also made a huge difference. I took the 
Goodwill financial literacy course and opened a bank account.
    The course taught me how to set goals. My short-term goals 
were to focus on staying clean and sober, getting to work every 
day, keeping my kids safe and on a good path. My long-term 
goals were get a car and a house and become a manager. I jotted 
them down as a pie in the sky.
    In 2009, I enrolled in a Goodwill Wheels to Work program, 
and I was able to get financing for my own car. I am proud to 
say I will be buying my own home for my family in August.
    Since becoming a supervisor, I have had an amazing 
opportunity to bring on people who have faced similar problems. 
Out of the 36 employees at my store, 13 are community job 
program graduates and a few others are enrolled in the program 
now. I take great pride in serving as a mentor and helping 
them. People call me the volunteer queen because I always have 
community job participants placed at my site.
    Because of my experiences, Community Jobs participants open 
up to me about their lives. I am able to give back to them what 
was given to me--support, encouragement, challenges, and 
resources. Now it is time for me to set some new goals. I just 
interviewed for a Goodwill store manager position, and I got 
it.
    In closing, people like me need a second chance to get our 
lives back on a better path. Goodwill and the Washington 
WorkFirst Community Jobs program gave me and many others that 
chance. I could not have done it alone.
    Thank you, and my family thanks you, for the Federal 
funding and support that has helped me get to where I am at 
today. These programs make a difference, and I am living proof 
of it, because jobs change lives. Thank you.
    [The prepared statement of Ms. Collins follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

                                 

    Chairman REICHERT. Well, Sandra, that was pretty powerful 
testimony.
    The other three still want to continue?
    Congratulations on your promotion, and congratulations on 
the purchase of your home, too. Good job.
    Ms. Dvorak, unfortunately, you get to follow. You are 
recognized.

 STATEMENT OF AMY DVORAK, EMPLOYER RELATIONS COORDINATOR, NEW 
      YORK STATE/ERIE COUNTY DEPARTMENT OF SOCIAL SERVICES

    Ms. DVORAK. Good afternoon, Chairman Reichert, Ranking 
Member Doggett, and Members of the Committee. Before I begin, I 
would like to thank you for this opportunity to speak to you on 
behalf of the Erie County Department of Social Services and the 
PIVOT Program.
    In September of 2000, the Erie County Department of Social 
Services initiated a job training program called the PIVOT 
Program. This unique wage subsidy initiative was designed to 
bridge the gap between the local business community and welfare 
recipients and is based on the premise that welfare reform 
success requires that TANF recipients play an active role and 
become a part of the business community.
    The goal of the PIVOT Program is to provide incentives to 
employers to hire clients with multiple barriers and those that 
may need more time-on-the-job training. PIVOT provides quality 
job opportunities for the employable TANF population while 
serving as a resource for the hiring needs of local employers. 
Job developers match employable TANF clients with companies 
looking to fill existing positions. All candidates are 
prescreened for job compatibility, including matching up 
client's skills, abilities, and education with the job specs. 
The employers must be an existing company and have permanent 
long-term positions.
    PIVOT is always looking to work with companies where there 
is room for advancement and higher-paying wages. The employer 
benefits include a 6-month subsidy that covers 100 percent of 
the client's wages. Employers are involved in the interviewing 
process and provided an opportunity to select from multiple 
candidates. The employer receives a 3-month advance when the 
client is first hired to cover initial training costs. The 
contract is then reconciled before final payment is made to the 
employer. The employer is able to reduce hiring and training 
costs and is able to participate in monthly job fairs, enabling 
the company to interview and recruit new prospective employees.
    Many clients' cases close within a month of obtaining 
employment, and case management is provided to help guarantee 
these clients do not return to welfare and receive public 
benefits. The benefits of the social services include client 
placement into employment and reduction of the cash grant and 
the closing of cases due to employment. Another benefit is the 
development of community partnerships for placement of 
unsubsidized clients. By developing good working relationships 
with employers, job developers are able to make additional 
placements for other DSS client not eligible for PIVOT.
    We have learned from employer feedback that prospective 
employees lack soft skills needed to be successful in jobs. In 
an effort to address this need and broaden the base of PIVOT-
eligible candidates, the PIVOT Program works hand-in-hand with 
the work experience program. Erie County has developed a model 
of neighborhood hub sites at various not-for-profit sites 
located in the north, south, east, and west of the city. These 
work experience hubs were developed to increase participation 
in federally countable work activities by making worksites more 
accessible to TANF clients. These sites are located in 
neighborhoods where TANF clients live and combine work 
experience with vocational and education programs, computer 
training, high school equivalency, and English as a second 
language classes.
    There is a job developer assigned to every hub site. This 
person goes out weekly and meets with the clients that are 
ready to be placed into employment. The client will continue to 
work with the job developer until placement occurs.
    Several of our supervisors at these hub sites are former 
clients that were working with our development unit. They were 
referred for positions based on their leadership qualities, 
excellent attendance, and motivation at the worksite.
    One of the biggest problems businesses have is attracting 
and retaining high quality employees. Businesses want employees 
that can come to work every day, be punctual, communicate with 
their supervisor, and be a good team player. The number one 
reason people lose their job is time and attendance. The number 
two reason is problems with their supervisor.
    With PIVOT, the job developer initially acts like a mentor 
between the client and supervisor. The client is provided 
extensive case management services when they first begin their 
employment. Follow-up is provided to assure supportive services 
are in place, which include transportation and child care.
    Some of the businesses that have been targeted and 
successful with PIVOT are nursing homes, hospitals, banks, 
hotels, call centers, manufacturing and industrial companies, 
small and large businesses, food service, not-for-profits, and 
community agencies. The PIVOT Program currently works with over 
300 businesses in western New York and is always evolving based 
on the time of year and labor trends.
    Since 2000, over 4,300 clients have been placed in PIVOT, 
with an average of 460 per year. The PIVOT Program is funded 
through the Flexible Fund for Family Services, which is a 
Federal allocation. The success of PIVOT has proved that when 
people are given support and the opportunity to work, they can 
be successful in their lives, role models for their children, 
and can be self-sufficient.
    Chairman REICHERT. Thank you, Ms. Dvorak. Good job.
    [The prepared statement of Ms. Dvorak follows:]
    
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    Chairman REICHERT. Mr. Doar.

 STATEMENT OF ROBERT DOAR, MORGRIDGE FELLOW, POVERTY STUDIES, 
                 AMERICAN ENTERPRISE INSTITUTE

    Mr. DOAR. Thank you, Chairman Reichert, Ranking Member 
Doggett, and other Members of the Committee. Thank you for the 
opportunity to testify today. I greatly appreciate being 
invited to discuss subsidized jobs programs and their role in 
alleviating poverty.
    My name is Robert Doar, and I am the Morgridge Fellow in 
Poverty Studies at the American Enterprise Institute. Prior to 
joining AEI, I spent 18 years working in government social 
services programs for the State and city of New York. My 
experience with the management of subsidized or transitional 
jobs programs has given me considerable insight into how these 
programs are actually serving welfare recipients, insight which 
I would like to share now.
    The most important objective and key outcome for assistance 
programs is lasting employment for the recipient. Not only is 
full-time employment the surest way to avoid poverty, but 
earnings are the most important form of income for a family. 
Only 3 percent of all full-time workers are defined as being in 
poverty by our Nation's official poverty measure. The strong 
emphasis that programs such as the Temporary Assistance for 
Needy Families place on helping applicants and recipients move 
into employment as rapidly as possible clearly acknowledges the 
fundamental role employment has in helping people out of 
poverty.
    In the years following the passage of the Welfare Reform 
Act of 1996, it became apparent that resulting increases in 
work opportunities and consequent earnings was the main reason 
child poverty and overall poverty fell during those years. More 
workforce participation, especially by single mothers, resulted 
in higher earnings and a substantial decrease in poverty.
    While employment and its consequent earnings are key to 
alleviating poverty, it is also important to remember that we 
already subsidize jobs. The earned income tax credit, public 
health insurance, Supplemental Nutrition Assistance Program 
benefits, and child care assistance are the largest but not the 
only government assistance programs that can greatly increase 
the resources available to low-income working households.
    It is in this context, with the recognition of existing 
programs that already work to shore up low wages and the focus 
on rapid employment in unsubsidized jobs, that we must evaluate 
whether subsidized or transitional jobs are an effective tool 
to help people in need. In New York City, we ran a large and I 
believe effective subsidized jobs program, but it was only a 
limited part of our overall effort.
    In New York, we HAVE worked with the Parks Department to 
form the Parks Opportunity Program, which created job positions 
lasting 6 to 9 months and consisting of 4 workdays and 1 
training day each week. The program was designed to serve a 
discrete subset of welfare recipients. Participants were 
primarily compliant, hard-to-place clients who had been on 
welfare assistance for more than 1 year and were not in 
sanctioned status.
    Additionally, for a time we offered subsidized jobs to 
clients in shelters who agreed to leave the shelter. We also 
offered transitional jobs to compliant, though out-of-work 
noncustodial parents whose children were on welfare assistance.
    While this program worked well for some recipients, 
participants did not exit the program with any increase in 
their probability of finding future employment over those cash 
assistance recipients in our regular program. The placement 
rate was similar to the rate for welfare recipients in our 
program in both our back to work and work first programs.
    The key lesson we took away from the Parks Department 
program was while the availability of subsidized jobs was 
beneficial for a portion of our caseload, the program itself 
was more costly and not effective enough to justify more than a 
limited investment. Upon exiting the program, placement rates 
were roughly equal to other work programs, but they had 
incurred a much higher cost.
    Ultimately, we need to ensure that the actions we take in 
creating job opportunities end in positive results and provide 
paths to consistent long-term employment. While subsidized jobs 
programs may produce those results for some individuals in some 
sectors, they cannot replace the focus on rapid attachment to 
unsubsidized employment for regular public assistance 
recipients.
    I should also point out that there were also other benefits 
associated with the Parks program. First of all, the Parks 
Department got additional assistance in manpower to do jobs 
they might not have been able to do without the support of a 
program like ours.
    In addition, for those members of our public assistance 
caseload who would not be able to receive the generous work 
supports that generally go to households with children in them, 
these are mostly single individuals and often young men, 
subsidized programs were an avenue to get them into work that 
we did not have and we did need. Thank you.
    Chairman REICHERT. Thank you, Mr. Doar.
    [The prepared statement of Mr. Doar follows:]
    
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    Chairman REICHERT. Mr. Bloom, you are recognized for 5 
minutes.

   STATEMENT OF DAN BLOOM, DIRECTOR, HEALTH AND BARRIERS TO 
                  EMPLOYMENT POLICY AREA, MDRC

    Mr. BLOOM. Good afternoon, and thank you for inviting me to 
testify about the research evidence on subsidized employment. 
My name is Dan Bloom, and I am with MDRC, a nonprofit, 
nonpartisan research organization. I would like to use my time 
to make three general points about subsidized employment.
    The first point is about goals. Subsidized employment is a 
broad term that means different things to different people. 
Some subsidized employment programs are designed primarily to 
provide work-based income support, that is, to put money into 
the pockets of unemployed workers during periods of high 
unemployment. These are sometimes called countercyclical 
programs. The best known of this type of program operated 
during the Great Depression, but many of the State programs 
that were supported by the TANF Emergency Fund in 2009 and 2010 
also fit into this category.
    Other subsidized employment programs are explicitly 
designed to improve people's long-term success in the labor 
market. They are much smaller, and they target people facing 
serious obstacles to steady work--people coming home from 
prison, long-term TANF recipients, and others. Some models, 
called transitional jobs programs, place people into what might 
be called practice jobs with nonprofit organizations so they 
can learn to work by working. Others offer subsidies to private 
employers to hire program participants, and some programs do 
both.
    When assessing the success of a particular program, it is 
critical to consider the program's goals. A large, broadly 
targeted countercyclical program might be judged on its ability 
to get going quickly and provide meaningful work to large 
numbers of people who would not otherwise be working. In this 
respect, I think the TANF Emergency Fund experience was quite 
positive. States were able to scale up programs in a very short 
period, and they put about 280,000 people to work, including 
youth in summer jobs.
    In contrast, transitional jobs programs that are designed 
to improve participant success in the labor market could be 
assessed at least in part based on the longer-term employment 
patterns of their participants, as well as other related 
measures, like reduced recidivism for ex-prisoners or reduced 
reliance on public benefits for welfare recipients.
    My second point is about evidence. Over the last 30 or 40 
years there have been a number of rigorous evaluations of 
subsidized employment programs. Many of these studies use a 
random assignment design, which is the gold standard for 
studies of this type. These studies tested the kinds of 
programs that were explicitly designed to improve people's 
long-term success in the labor market, and the results are 
mixed.
    On the one hand, we have seen that programs can generate 
very large increases in employment initially because they give 
subsidized jobs to lots of people who would not otherwise be 
working. We studied one program for ex-prisoners that also 
reduced recidivism and saved money for the government.
    On the other hand, most of these programs did not lead to 
sustained increases in unsubsidized employment. In other words, 
it doesn't look like the subsidized work experience helped 
people get or keep regular jobs. The main exception to this 
pattern is a few programs that provided temporary wage 
subsidies to private employers who hired people from certain 
disadvantaged groups. There is some evidence that these 
programs have increased employment even beyond the subsidy 
period. The issue has been that most of these programs have 
been small and selective in who they served.
    One key question for any program that subsidizes private 
employers is whether employers are receiving a windfall for 
hiring the same kinds of people they would have hired anyway. 
Unfortunately, this is a hard question to answer. Studies can 
test whether providing subsidies for a particular group of job 
seekers improves the odds that they will find work, but it is 
almost impossible to know for certain whether this ends up 
displacing other similar workers.
    My final point is that I think there is some hope for the 
future. The Departments of Labor and Health and Human Services 
are both conducting multisite evaluations of the next 
generation of subsidized employment programs. Although the 
projects were developed separately, DOL and HHS are 
collaborating closely in carrying them out, and MDRC is 
fortunate to be leading both projects.
    Together, the two projects are using random assignment 
designs to evaluate about a dozen different subsidized 
employment models. Here is one example. In Los Angeles, we are 
testing two programs for TANF recipients who completed an 
initial job search activity but were unable to find work. One 
model provides fully subsidized jobs with public or nonprofit 
employers for up to 6 months.
    In the other model, participants are placed with private 
employers but remain on the program payroll for the first 2 
months of employment. Then they move to the employer's payroll 
and the employer receives a partial subsidy for 4 additional 
months. Employers are expected to retain participants after the 
subsidy ends.
    All of the models in both projects are aiming to address 
the limitations of earlier transitional jobs programs, in part 
by using subsidies to help participants get a foot in the door 
with private employers. A key question is whether these private 
sector-focused models can be effective for less job-ready 
participants. Results from these projects will start to become 
available next year.
    In sum, subsidized employment is a valuable tool for 
providing work-based income support, particularly during 
periods of high unemployment. To date, the results from 
programs that try to use subsidized employment to improve long-
term employment outcomes for hard-to-employ groups are mixed, 
but we are now testing a new set of models that were developed 
specifically to address the limitations of earlier programs.
    Thank you.
    Chairman REICHERT. Thank you.
    [The prepared statement of Mr. Bloom follows:]
    
    
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    Chairman REICHERT. We will now move to our questions.
    Ms. Collins, thanks again for being here, and I know maybe 
sometimes you don't get to pause or maybe you do get to pause 
and think about how far you have come from being homeless and 
without work in 2007, beating the addictions that you have just 
talked about, and getting your GED, being hired as a full-time 
employee, now being promoted to manager, buying your own home. 
And now here you are in the Capitol testifying before Congress. 
You have come a long way, as they say.
    We want to make sure that others have that kind of success, 
and your testimony is powerful, but I am wondering if you could 
just share with me a little bit, given your experience as a 
participant in the program and now someone who supervises other 
people--and as you said, you were described as the volunteer 
queen, people want to be around you and they want to learn from 
you and watch you work--what do you think are some of the key 
features of the programs that made you successful and that will 
help those that you are working with now be successful?
    Ms. COLLINS. I think the biggest thing was, was that I was 
uncomfortable with the case manager being into the Washington, 
you know, the Department of Social Services office. I felt if I 
was open with her and truly expressed the barriers that I had, 
more bad things would happen to me.
    And so I think with people who have bigger barriers, with 
programs being a little bit longer, being able to have time to 
get to know the person and really dig down and find out what 
those barriers are, and when the program is going it is 
designed to be 6 months, if they are seeing progress in the 
person but they are not yet where they need to be or their 
barriers still haven't been addressed or worked through, then 
maybe expanding the program a little longer.
    Chairman REICHERT. Additional help.
    Ms. COLLINS. Yes.
    Chairman REICHERT. Yeah. Anything else that you can think 
of that really played a key role in helping you get your feet 
on the ground that you can see, thinking of some of the people 
that you work with, anything else that you can see might be 
helpful?
    Ms. COLLINS. Well, with the people that I work with now, I 
remember where I came from and I remember the support that I 
had from my case manager. And so I try to work in conjunction 
with their case managers by identifying at the worksite any 
issues that might be of concern, and I share those with the 
case manager. And that usually breaks the ice a little bit, 
when I am able to see the person every day at the worksite 
versus the case manager once a week.
    Chairman REICHERT. It sounds to me like you need somebody 
who cares, somebody who will be with you long term, and 
somebody that you can learn to trust and open up to and begin 
to build your life.
    Ms. COLLINS. Yes.
    Chairman REICHERT. Thank you.
    Ms. Dvorak, Erie County in New York has and operates a 
program where you place welfare recipients in subsidized jobs 
for 6 months, and you report great success in moving people 
from welfare to work as a result. And your program differs from 
some others, I think, as Mr. Bloom has pointed out. You place 
your recipients in private sector jobs and the employer pays 
the employee directly versus in some State agencies they 
basically provide a free employee, the State pays the paycheck.
    Do you feel the structure impacts the success of your 
program? And what other features of your program do you believe 
contribute to its success in moving people from welfare to 
work?
    Ms. DVORAK. I think there is a huge difference. I meet with 
employers all the time, I work with CEOs, and employers have 
been incredibly supportive. But when I sell the program, I sell 
it that you are going to hire someone off the street. All I am 
asking is that you give my TANF recipients an opportunity to 
interview for jobs like anybody else. We are giving you the 
carrot. We are giving you 6 months of gross wages because they 
may need alonger time in training. We will provide additional 
supports. We will provide case management. But when I sell it, 
I am selling it as a long-term position, and existing position 
in the company.
    The position is already there. I am just asking that they 
look at my clients and they consider them. But it is an 
existing position. I never go in saying this is temporary 
employment. If you don't like the person in 6 months, it is 
okay, you can let them go. They are hiring them like they would 
anybody else, so that it is a permanent position.
    I do think it makes a big difference how it is presented to 
the employer because they are making an investment in this 
person, their staff is training this person to their 
specifications, and the client is going to the job thinking 
they have a long-term, full-time job. We always try and make 
the contract full-time, because how are they going to be self-
sufficient if it is not full-time?
    I think you have got to, like you said, break down the 
barriers. I think it takes a lot of case management to break 
those barriers down, but I truly believe if you can empower 
somebody, that once they start to earn a paycheck--which is a 
big difference, when they are getting a paycheck from a company 
as opposed to getting paid from an agency there is a huge 
difference in how they start to feel about themselves. They 
want to do better.
    Chairman REICHERT. Right.
    Ms. DVORAK. I think it has a lot to do with how they feel 
about themselves, about their self-esteem. I think it is baby 
steps. We have seen the change.
    Chairman REICHERT. I think that you just validated the 
comments by Ms. Collins, that long-term relationship and that 
stability in life and building that trust, I think those things 
all sound very key to the success of people that are going 
through this. Thank you for your testimony.
    Mr. Doggett.
    Mr. DOGGETT. Thank you very much.
    Ms. Dvorak, do you keep data on how many of these folks get 
terminated when the subsidy ends or within a short time 
thereafter?
    Ms. DVORAK. Well, I will be honest with you. If they decide 
they don't like the person a day after the 6 months, I call 
them and say, you know what, we won't be doing business with 
you anymore. Because I know, if they liked the person up to 
that point and they don't like them the day after, this is not 
a revolving door, and we aren't going to supply your workforce 
on a subsidy. So they know that I am not going to do business 
with them again.
    Mr. DOGGETT. Have you had to do that very much through the 
life of the program?
    Ms. DVORAK. No, because I make it pretty clear. But when we 
do do it, we don't do business with them again.
    Mr. DOGGETT. And what type of services do you provide for 
the employee to try to ensure that they meet the expectations 
of the employer during that period of subsidy?
    Ms. DVORAK. Okay. If there are issues that come up, a case 
manager goes out to that company and meets with that client and 
will say, you are right on the edge, what is going on? Because 
they really do not, they don't have conflict resolution skills, 
they don't have a lot of coping skills. That is when we need to 
intervene and provide a lot of support. Because we can get them 
on the right track, but we have to do a lot of hand holding at 
the beginning and slowly we can wean them off of the system. 
You got to do it individually. Some people have a lot of 
issues. You never know when you can be on the other side.
    Mr. DOGGETT. Exactly.
    Ms. DVORAK. It could just be a crisis, a health crisis in 
someone's life, and they have a work history and they can do 
well. Other people have a lot of barriers. So those are big 
steps to overcome.
    Mr. DOGGETT. I salute what you have accomplished and 
certainly what Ms. Collins exemplifies.
    I am wondering, in looking at the studies that you are 
doing, Mr. Bloom, what you think you will be able to tell us 
about the services that need to be replicated in order to 
increase the chances that these programs will be successful.
    Mr. BLOOM. I think an important thing to know about these 
two studies that are going on, one with HHS and one with DOL, 
is that they were explicitly designed to try to address the 
limitations of some of the earlier programs that I was talking 
about. So what we are looking at, for example, are programs 
that use a staged approach. So they will start off with 
somebody working at a Goodwill, for example, and then as people 
progress through the program, they may move into a subsidized 
position with a private employer.
    And so that is a different model than what we tested 
before, because in the past we tested a lot of transitional 
jobs programs that had difficulty with the transition. So they 
were able to give people jobs and they did meaningful work, but 
when it came time to transition them into a permanent job that 
is where the trouble started.
    So some of the programs that we are looking at now build in 
a more seamless transition through a series of steps so that 
people can try to end up in a permanent position rather than 
just a subsidized position.
    Mr. DOGGETT. And, Mr. Doar, the experience you describe 
with the New York Parks Department was one where, as I 
understand it, the people that were in the program didn't do 
any better in getting long-term employment than those that 
receive no subsidized employment at all.
    Mr. DOAR. Yes, that is correct. We had a large program in 
New York City where the vast majority of welfare recipients 
went into what we call back to work or work first programs that 
were intended to get them into employment rapidly, and we had 
placement rates in the 25 percent range, measured a certain 
way. And then we had others that we would select for these 
transitional jobs programs, smaller group, would have this 6-
month employment at some significant cost, plus training, plus 
job search, and their placement rate in permanent employment in 
the period after that ended was about 20 percent.
    So we had done a great deal of effort to get people into 
work in that circumstance, but the result was not much better 
than if we just said to someone, let me see if we can get you 
into unsubsidized, private sector usually, employment right 
away, rather than spend this time in this program along the 
way.
    Mr. DOGGETT. Do either of you have observations about what 
standards need to be in place, whether the programs need to be 
focused only at certain populations, or how we can maximize the 
investment? If every employer had a Ms. Dvorak there saying if 
the employee doesn't measure up, that is a good reason to 
dismiss them, but don't count on us to keep circulating people 
in here every 6 months just to subsidize your endeavors, we are 
here to try to help the employee. So she can't be all over the 
country. How we can replicate that kind of thing to ensure that 
we are helping people get long-term jobs and not just providing 
a short-term subsidy.
    Mr. DOAR. My view was that we have to recognize that people 
who come apply for public assistance come in a variety of 
situations.
    Mr. DOGGETT. Exactly.
    Mr. DOAR. And if we build a program around permanent 
subsidized employment or intensive subsidized employment for 
everybody, we may be doing much more than we need to do for a 
lot of people. So a lot of people can be helped with getting 
into employment, job search, get them to employment, take 
advantage of the work supports that are available for 
everybody, like earned income tax credit, and you are on your 
way. Then there are certain populations that might need 
specialized attention where transitional jobs or subsidized 
jobs might be appropriate. But it has got to be carefully 
calibrated for populations that are in particular need.
    Chairman REICHERT. Mr. Bloom, can I ask you to provide your 
answer in writing. We have votes about 3, 3:15, so I want to 
try to move quickly.
    Mr. DOGGETT. Thank you.
    Chairman REICHERT. If you could, we would appreciate it.
    Mr. Young, you are recognized.
    Mr. YOUNG. Thank you, Mr. Chairman. And I thank all our 
panelists for being here today. I really enjoyed the testimony.
    Big picture here, we are trying to help people find full-
time jobs, recognizing that it is the best way to reduce 
poverty. It also enhances income mobility and really one's 
ability to pursue the American dream, go out there and do 
exactly what Ms. Collins has exemplified. Over 97 percent of 
individuals age 18 to 64 who work full-time have earnings that 
place them above the poverty line. It is really powerful.
    So when we are considering ways to get welfare recipients 
into work and up that income ladder using wage subsidies, we 
need to be careful that what we are actually doing is what we 
want them to do, is get jobs in the end. As policymakers, that 
means putting aside ideological biases, anecdotes we might get 
back in the district and using those to form our opinions as to 
the optimal public policies, uninformed sentiments, and so 
forth. We need to actually look at the available evidence base, 
and it is limited but growing, which is encouraging, as Mr. 
Bloom alluded to.
    Some programs, we know, that have focused on helping 
welfare recipients in the past have actually been harmful, and 
that can be instructive. One example would be in the 1980s and 
1990s the Targeted Jobs Tax Credit Program, which was a 
predecessor to the current Work Opportunity Tax Credit Program. 
It was intended to encourage employers to hire welfare 
recipients.
    In 1995, GAO called this program a, quote, ``inefficient 
vehicle for increasing employment among the economically 
disadvantaged, often rewarding employers who would have hired 
disadvantaged workers anyway,'' a concern on both sides of the 
aisle. Worse, there were some indications that this program 
actually prevented hiring of needy individuals whom employers 
perceived as lacking the skills needed to be hired without the 
credit, in essence stigmatizing the employees.
    I am concerned about the risk of continuing to make this 
mistake as we craft future public policies. And we have pointed 
in the course of this hearing to the existing of some rigorous 
evidence that tells us how to make programs successful, 
transitioning from a part-time position, or a temporary 
position, rather, into longer-term sustainable jobs. We have 
some evidence there.
    First question would be to Mr. Bloom, and hopefully he can 
answer concisely based on my time limitations, whether we have 
evidence as well about avoiding this windfall effect to 
employers and/or evidence pertaining to the stigmatization of 
potential employees and how we can avoid that.
    Mr. BLOOM. I can tell you from experience more than from 
hard random assignment evidence, but I think there are two 
things you could do to avoid this windfall. One is what we 
heard about from Erie County, which is to be very clear with 
the employer up front that there is an expectation that they 
are going to take this person onto their payroll and make them 
a permanent employee.
    The other thing, I think, is to be careful with who is 
targeted by these programs. You don't want to target an 
individual for a subsidized jobs program if they can find a job 
without a subsidy. A lot of agencies will have people look for 
a job first with basic assistance, and the ones who are 
unsuccessful, those are the ones they might target for the 
subsidy program. And I think both of those things can help.
    Mr. YOUNG. Excellent points. Well taken.
    I am encouraged about the Department of Labor and HHS 
projects. I think we need to do far more demonstration projects 
and then robustly evaluate them in this country, especially in 
the social realm, and then scale up what works based on that 
evidence.
    With that said, oftentimes we are hesitant to reveal all of 
our assumptions, our methodology, and results from these pilot 
programs in government. We issue press releases when we are 
successful. We spin or hide when we are not successful.
    So I have a question. Do you feel as though in these cases, 
what you pointed to, there is sufficient opportunity to 
critique the methodology and learn from the project design and 
implementation because of its independent assessment and 
because of what is being provided to policy analysts like 
yourself?
    Mr. BLOOM. Both of these projects are set up in such a way 
that they are using the strongest possible research designs, 
and that was required by HHS and DOL. I think we have total 
confidence that the results are going to come out and be public 
regardless of what they are. My organization is well known for 
putting out information whether it makes people happy or not, 
and I am sure that will happen in this case in both of these 
projects.
    Mr. YOUNG. And I didn't mean to insinuate otherwise. I 
thank you very much for your work.
    And I yield back.
    Chairman REICHERT. Mr. Renacci.
    Mr. RENACCI. Thank you, Mr. Chairman. I want to thank the 
witnesses for testifying today.
    An estimated 1.8 million Ohioans, my home State, are living 
below the poverty line, and we know the best way out of poverty 
is a job. Poverty in my home State of Ohio has increased by 
approximately 58 percent over the last decade, despite a 
stagnant population and a whole host of Federal programs 
created to end this cycle of poverty. We must find ways to 
address our struggling economy, improve our educational system 
and workforce training programs, and connect individuals to 
temporary resources they really need to success.
    Included in the 2012 unemployment insurance reforms, the 
Department of Labor was granted waiver authority in the UI 
program. These waivers would allow States to operate 
demonstration projects to test alternative means of helping the 
unemployed return to work, including the concept we are talking 
about today, subsidized jobs.
    Since this waiver policy was enacted in February 2012, only 
Texas has applied for waiver, and its application was swiftly 
denied. States have described the application process created 
by the Department of Labor as onerous and time-consuming. This 
Congress, I worked with the Department of Labor to introduce 
H.R. 3864, the Flexibility to Promote Reemployment Act, a bill 
that extends the UI waiver authority and provides greater 
flexibility to States to use existing UI dollars on programs 
that help the unemployed collect paychecks instead of benefit 
checks.
    Ms. Dvorak and Mr. Doar, your program has been successful 
in connecting individuals with limited labor force attachments 
to jobs. Would your program be successful in connecting 
individuals with greater labor force attachment, like current 
UI recipients who were previously employed, to jobs?
    Ms. DVORAK. Many of our clients, they have let their 
unemployment run out, they got their extensions, they let their 
unemployment run out, and then they have come to us. It is very 
difficult for them because they are very rigid, they let us 
know, ``this is how much I am going to accept per hour, I am 
not going to work for less, these are the skills I have'', and 
they are very adamant.
    Well, one of the big pieces about the PIVOT Program is it 
is not a stand-alone program. It is not okay that they are not 
in a work activity. They have to go somewhere every day and be 
in a work activity, which goes hand in hand with them also 
working with the job developer and looking for work.
    So it is really the whole piece with PIVOT. It is not just 
looking for work. It is doing the work activity, whether they 
need a GED, whether they go to the work activity and work in 
community projects. We also have a project in our parks, which 
are the Olmsted Parks in Buffalo. But it is dealing with the 
whole person and providing wrap around services that is tied 
into getting them back into the workforce. There is a lot of 
resistance there, but having said that, you have got to work 
with them and get them back into the workforce. Which is why 
they are mandated to do a daily work activity.
    Mr. RENACCI. Mr. Doar, do you have any----
    Mr. DOAR. Our experience in New York was with welfare 
recipients who come to the TANF program or the general 
assistance program that existed in New York City, and the One-
Stops that were under the WIA program dealt more with people 
who were on UI. And so I can't really speculate on what would 
happen if in a unemployment insurance program greater 
flexibility was provided to a locality, but the previous folks 
is right, it is in some respects a different population and may 
need different approaches.
    Mr. RENACCI. Both of your programs, in your testimony you 
describe your experience connecting individuals with subsidized 
transitional jobs in the TANF program. What were really some of 
the common reasons that individuals were unsuccessful in 
finding employment?
    Mr. DOAR. Well, we had a benefit in New York City of having 
a very vibrant entry-level employment situation for all of the 
time that I was there, including during the recession. The 
opportunities were there, and that was a good thing.
    I think the principal reason people had trouble is one of 
two factors. One is that they were weak on soft skills and the 
sort of requirements of the daily rigor of work and they 
weren't prepared and ready to step up to that responsibility 
and they needed some assistance in getting there.
    Mr. RENACCI. Not to interrupt you, but in that case, it is 
not that they weren't trained, or was training an issue, too?
    Mr. DOAR. Well, again, there are a lot of opportunities in 
the entry-level position. And then the second would be there 
were language barriers and literacy barriers. If I would say 
that was one that was the most significant, that would be it.
    Mr. RENACCI. Thank you. My time has run out. I yield back.
    Chairman REICHERT. Mr. Davis is recognized.
    Mr. DAVIS. Thank you very much, Mr. Chairman, and I thank 
the witnesses for being here.
    Ms. Collins, let me commend and congratulate you for your 
successes, and I think that you are the epitome of what can and 
does happen to and with individuals when they are given 
opportunities and a chance.
    As a matter of fact, in 2010 the State of Illinois put 
together a program called Put Illinois to Work, which placed 
eligible Illinois residents in subsidized employment positions 
lasting up to 6 months. Put Illinois to Work was a 
collaborative of the Illinois Department of Human Services, 
Illinois Department of Commerce and Economic Opportunity, and 
Heartland Human Care Services, using funding from the TANF 
Emergency Contingency Fund, which was created by the American 
Recovery and Reinvestment Act of 2009.
    Illinois invested $10 million to leverage a Federal 
investment of $200 million. The Federal emergency TANF funds 
expired on September 30, 2010. The program was supposed to end 
November 30, 2010, but Governor Quinn used approximately $50 
million in State money to keep the program alive through 
January of 2011.
    The program was evaluated, and here is what they found. The 
program exceeded the goals demanded by employers and workers. 
It helped tens of thousands of low-income unemployed and 
underemployed Illinoians. It helped small businesses during 
economic recession. Generated income and revenue, $13.6 million 
in Federal income and $2.7 million in State income. It provided 
quality programming that satisfied trainees and employers.
    Ninety-two percent of the workers and 88 percent of the 
employers said that they would participate in that program or 
something like it if they had another opportunity to do so. And 
over 52 percent of the employers indicated that they would hire 
the workers permanently if they had the resources and the 
opportunity do so, although only 13 percent of them indicated 
that they did.
    Mr. Bloom, I was interested to know, given your experiences 
and the work that you do, have you noted anything in particular 
about ex-offenders, individuals who have been incarcerated, and 
their experiences as they get opportunity for programs like 
this?
    Mr. BLOOM. I think people who are coming out of prison face 
in some ways a double issue. Many of them have characteristics 
that would make it difficult for them to hold a job, even if 
they hadn't been to prison. So they may not have finished high 
school or they may have limited work experience. Add on top of 
that the fact that they now have a criminal record, and surveys 
have shown that many employers are very reluctant to hire 
people with criminal records.
    It is doubly difficult for those folks to get employment. 
And I think that is why a lot of these transitional jobs 
programs have tended to focus on individuals coming home to the 
community from prison, because it is so difficult for them to 
walk right into the private sector and get hired.
    Mr. DAVIS. Ms. Dvorak, could you just off the cuff think of 
what it is that we might be able to do to make these programs 
or this effort more effective?
    Ms. DVORAK. I feel that subsidized employment works. So I 
am in the trenches, I work with the clients, I work with the 
agencies. So for us it is working. So it is hard for me to say. 
You don't always have to reinvent the wheel, but I think we 
have to look at it more closely. For us, it is working.
    Mr. DAVIS. So more might be better?
    Ms. DVORAK. We work with ex-offenders and it is very 
difficult. But there are big employers out there, like Home 
Depot, who will give these people an opportunity, and they do 
promote from within, and they are an amazing employer. But you 
have to work one on one with these employers.
    Mr. DAVIS. Thank you very much. I am familiar with the Home 
Depot effort, and they are in fact marvelous and do an 
outstanding job.
    Thank you very much, and I yield back.
    Chairman REICHERT. Thanks, Mr. Davis. Mr. Kelly.
    Mr. KELLY. Thank you, Mr. Chairman.
    Thank you all for being here.
    Ms. Collins, let me start off with you, because I know so 
many folks like you. I am also an employer. I have had the best 
experience in the world with having people come into our 
business and showing us that they are really wanted and that 
they truly do have value, not just value to the dealership, but 
value as people in our community.
    If you can share that a little bit, because I don't think 
there is anything better than to wake up and have the alarm go 
off, wake up, throw your feet out over the bed, say, you know 
what, I am going to go to work today and I am going to provide 
for my kids, I am going to put a roof over their head, clothes 
on them, food on the table, and a chance for the future.
    So I don't think there is any woman or man out there when 
you get up and you have a place to go and a place that you are 
wanted is the key to it. Just share that a little bit. Listen, 
your testimony was fantastic, but you are the person that we 
are talking about. You are the person that wants to get back 
into society, wants to contribute, wants to be part of what 
makes America great. Just share a little bit more because I 
can't imagine that transition.
    I have people that have actually; you know what they did 
when they got their first paycheck? They came in and talked to 
me about it, but then they took a copy of it in our copying 
machine so they could keep it in their wallet just to show 
these other people that were down on them, you know what, I 
actually get paid for what I do, and these people like me, and 
they want me back every day. If you could just share a little 
more of what you do, because it is an incredible story.
    Ms. COLLINS. Sure. So one of the biggest turnarounds for me 
was, especially being a victim of domestic violence and being a 
meth user for so long, was that I had to self-worth. So the 
people that I worked with made every day that I went in, made 
me want to go in another day. It was a just a happy, positive 
place to be. When I walked in, they were very excited to see 
me. Even though I went there and I worked really hard, it made 
it worth coming back every day.
    So what I do now with the participants that are at my store 
is I do the same thing. You have to come with a positive 
attitude. With a positive attitude comes a productive employee. 
I let them know how good of a job they are doing, and I just 
let them know how important they are to be part of our team and 
our team isn't complete without them.
    It makes them open up to me a lot sooner with any kind of 
personal problems or any kind of barriers that they have. And 
just being able to, like you said, I spend a third of my day at 
my job, I want to go someplace that is going to be positive and 
where I feel important. And that is how I want my employees to 
feel.
    Mr. KELLY. I can't imagine your children, how proud they 
are of their mom, every day she gets up and she is goes to work 
because of them. So thank you so much.
    Ms. Dvorak, I have got to tell you, your program makes 
sense to me because you take the curse off the call. You say, 
hey, listen I want to come talk to you about employing somebody 
and it is going to work for you, too. This is a win-win 
situation. That program, what made you pivot to that type? Were 
you having a different experience in the workforce trying to 
get people to actually listen to you?
    When it came time to talk to an employer and say, I have 
got a prospective employee. And they say, really, get back with 
me. And say, well, here is the point, we can actually work 
together on this. You can win, they can win. In the long run 
you get a great employee. But early on, through that 90 days, 
you are going to get a chance, these people can prove 
themselves.
    Ms. DVORAK. The greatest part to me is going to employers. 
When you change people's lives and you meet with CEOs and they 
see that they can be a part of it, it is amazing, you get them 
engaged and they buy in. It is great. It is great because it is 
a win-win for both the client and the employer.
    Mr. KELLY. Well, I think--and maybe, Mr. Doar, you can go 
with this--I think part of the problem, and Mr. Young and I 
were just talking, we have a criminal justice code that really 
takes people who are substance abuse people and makes them 
criminals, and they are addicts and they have a very difficult 
time. They want to get back into life and they want to be part 
of society, but they are constantly put down because of the way 
they are identified and the way they are labeled.
    I think the other problem, and maybe you suggested, you 
talked about people with soft work, if you stay off the field 
too long you don't want to get back in the game. If you make it 
too easy to stay at home, I think you have to attach that work, 
getting work to get the benefit.
    Your experience in New York and people walking away from 
jobs, that is not good enough for me, but maybe for somebody 
else. So the soft issue, what is that exactly, so people 
understand that?
    Mr. DOAR. Well, one of the things I found most interesting 
about Mr. Bloom's testimony was his reference to a program 
called CEO in the city that focuses on people coming back from 
prison. And they, my experience with them, I knew them, I 
worked with them, I funded them in part through city funding, I 
found them to go very focused on getting people ready and 
understanding the basic requirements of a job, and then getting 
them into work in a way that they then felt they were getting 
something in return.
    So it is both a combination from within and if they get a 
real return at the end of the day for work done. So it is 
tricky, all this work, but I would look at what CEO was doing 
with reentry people because they had a good model.
    Mr. KELLY. I am sorry, I have run out of time. But I want 
to tell you, I think this investment and the return on this 
investment for the American taxpayer is really a positive one. 
And you are all doing great work. Please keep it up and let us 
know how we can help you. Thanks so much.
    And I yield back, sir.
    Chairman REICHERT. Thank you, Mr. Kelly.
    Mr. Crowley, you are recognized.
    Mr. CROWLEY. Thank you, Mr. Chairman.
    Let me thank each of you for testifying today. I appreciate 
having this hearing today and particularly focusing on helping 
families go to work and escaping poverty.
    I have to say, Mr. Chairman, this may be the least 
acrimonious subject we have discussed in the entire session.
    And in particular, Ms. Collins, I want to congratulate you 
on your success and your life. It is outstanding, as was 
mentioned earlier by the chairman. And anyone who follows you 
does so at their own risk. And I applaud the others for having 
followed through and for contributing in a mighty way as well.
    I believe that subsidized job programs are one of the key 
tools in our arsenal to get families into the workforce and out 
of poverty. I support these programs, but I don't support them 
at the expense, per se, of cutting other worthwhile programs as 
well. It goes hand in hand with programs like SNAP, which, Mr. 
Doar, I can't help but notice that you list in your testimony 
as an important work subsidy as well. And that is why I am 
surprised, not to embarrass any of my colleagues here, but my 
colleagues on the other side of the aisle all voted to cut the 
SNAP program as part of the Republican budget proposal earlier 
this year.
    I see Mr. Doar's testimony also mentions that the Child Tax 
Credit is another important work subsidy. And I guess that is I 
was also surprised to see that my colleagues last week, my 
Republican colleagues, voted to reduce or eliminate the Child 
Tax Credit for hundreds of thousands of American children and 
their families.
    I was even more surprised because this came the day after 
the big thinker of the Republican Party, my good friend Mr. 
Ryan, released his ideas of how to lift Americans out of 
poverty. And despite all the evidence from every direction that 
SNAP and the Child Tax Credit and other policies are critical 
pieces of keeping Americans afloat, the so-called poverty plan 
includes cuts to SNAP and other vital social programs.
    What it doesn't include is policies that actually help lift 
people out of poverty, and Ms. Collins has given her own life 
example as an example to us all, like the very subsidized work 
programs that we are discussing here today; like investments in 
education from early childhood to higher education and in the 
job training; like an increase in the minimum wage, which would 
not only increase wages to millions of American workers, but it 
would also reduce the need to put on programs like nutrition 
assistance in the first place.
    I won't ask Ms. Collins, but I am sure she would like to 
see a raise in the minimum wage, but I won't ask that question.
    Instead, this poverty plan is just the House Republican 
budget dressed up with a different bow on top. The fact is the 
Republican Ryan proposal is their worst idea since their last 
idea.
    So with that, Mr. Chairman, I will just yield back to you.
    Chairman REICHERT. Thank you, Mr. Crowley.
    I warned the panel beforehand that we might have some 
comments that might be political in nature, but I think the 
bottom line is that what you heard Mr. Crowley say in the 
beginning is that everybody on this panel, and I think 
everybody in Congress, including the staff, wants to come up 
with a way to help people get on their feet, get a job, and 
have a future as Ms. Collins has described. And that is the 
effort here. And those things that we have disagreements on are 
disagreements--if I can say, Mr. Crowley--disagreements on how 
we get there. And I think that is where we have the battle. I 
think Mr. Doggett alluded to that also.
    Mr. CROWLEY. Mr. Chairman, will the Chairman yield?
    Chairman REICHERT. Yes, I will yield.
    Mr. CROWLEY. Mr. Chairman, I hope that you would not 
interpret the words that I spoke as being political in the 
sense that everything that I talked about is in bill form and 
in legislation that we Democrats are in support of and would 
like to see advanced here in the House of Representatives.
    Chairman REICHERT. Reclaiming my time.
    Mr. CROWLEY. That is not political, that is a legislative 
position.
    Chairman REICHERT. Reclaiming my time. Matter of 
interpretation of legislation and the wording in the 
legislation language is always one party or another has a 
different view.
    Mr. CROWLEY. Mr. Chairman, would you yield one last time?
    Chairman REICHERT. No.
    I want to take a moment to thank all of you, and appreciate 
your testimony. I think this was a very beneficial hearing in 
that you all provided information that we can all use, all of 
us together, and move forward. Again, the bottom line here is 
that we are all dedicated to trying to find a way to put people 
back to work.
    And you may not know some of the background of some of the 
members of this committee. Mr. Davis has an interesting 
background to share. I think we all do. But every now and then 
I think it is important for you to know that not all of us are 
Princeton, Harvard, Yale graduates.
    I was a runaway myself from my home. I was a victim of 
domestic violence as the oldest of seven. And I actually lived 
in the Kent Valley, where now you are employed in the Kent 
Valley. I went to Kent-Meridian High School. It is a place that 
I know very well. And maybe I will stop by the Kent Goodwill 
and say hello to you. Would that be all right?
    Ms. COLLINS. Yes.
    Chairman REICHERT. Okay.
    Thank you all so much for your testimony and have a great 
day.
    [Whereupon, at 3:17 p.m., the subcommittee was adjourned.]
    [Submissions for the Record follow:]
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