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10. When Contracting Really Works: Welfare-to-Work in Philadelphia
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169 Chapter 10 When Contracting Really Works Welfare-to-Work in Philadelphia THE TRANSITIONAL Work Corporation is a nonprofit corporation that was created to help welfare recipients comply with the time limits incorporated into the federal welfare reform legislation of the mid-1990s. This chapter focuses its analysis of government contracting with a nonprofit organization that was designed to serve as a government contractor. The nature of the Transitional Work Corporation and the challenges it faces were shaped by the evolution of the welfare-to-work philosophy, legislation , and policy in Pennsylvania. The Commonwealth of Pennsylvania enacted enabling legislation that reinforced the philosophy of work-first for welfare recipients. In practical terms, this meant that current welfare recipients had two years to find an average of twenty hours a week of work or lose their welfare benefits. In most states, the welfare-to-work funds were managed by state agencies , and then Pennsylvania governor Tom Ridge decided that the Pennsylvania Department of Public Welfare (DPW) should manage his state’s federal allocation and matching funds. The DPW therefore had to manage the welfare-to-work grant program as well as the newly designed Temporary Assistance for Needy Families program (TANF), the successor to the long-established AFDC program (Aid to Families with Dependent Children ). Since the federal law required that the grants go in part to local workforce boards, the DPW would need to work with localities such as Philadelphia in developing its program (Greenwald 2002, 3). Work requirements presented a major new challenge for social services departments across the country. Philadelphia faced a particularly difficult assignment as more than half of the welfare population of Pennsylvania lived in the city. There was virtually no private sector job growth in the city, and the suburban job market could not be easily accessed through 170 Chapter 10 public transportation. Among the cities with the largest public assistance population at the time—New York, Chicago, Detroit, and Philadelphia— Philadelphia was the only one with negative overall job growth (Hughes 1996). Finally, Pennsylvania did not have a long history of experimentation in the field of welfare-to-work. The new federal and state requirements initially overwhelmed and confused both recipients and the city’s welfare department workers. The situation was complicated by a basic philosophical disagreement between the city and the Commonwealth of Pennsylvania. The commonwealth took a strong stance: work means real employment in paying jobs, primarily in the private sector. The strong economy across most of Pennsylvania led state officials to believe their firm stance was reasonable and could be achieved. In Philadelphia, the economy was not nearly as strong as the rest of the state, and there were many welfare recipients to place. City officials and social service advocates favored a broader definition of work activities to meet the twenty-hour requirement, including work readiness training, basic education , job search, and supported work opportunities. By the spring of 1997, the city and the commonwealth discussions were stalemated. A new and creative idea helped break the stalemate. Mark Alan Hughes, vice president of a Philadelphia-based, innovative nonprofit called Public/ Private Ventures, wrote an op-ed for the major local newspaper, The Philadelphia Inquirer. Hughes proposed that the city and commonwealth create a transitional jobs program to meet the federal works requirement. Hughes argued that this approach was superior because it would enable recipients to meet work requirement and also remain eligible for TANF benefits, participants would end up with more income at the end of the month, participants would be eligible for the Earned Income Tax Credit (EITC), and working would enable participants to build a work history and contacts to help obtain a permanent job (Hughes 1997). Under the Hughes plan, a nonprofit organization would be created to develop transitional job opportunities in nonprofit and government agencies. Willing participants would be placed in these six-month, transitional jobs. Welfare grants would be channeled through the nonprofit job developer who would convert the grant into a wage. These transitioning welfare recipients would thereby become paid employees of the nonprofit organization [54.226.226.30] Project MUSE (2024-03-28 20:10 GMT) When Contracting Really Works 171 that placed them in the transitional job. At the same time, Philadelphia mayor (and subsequent Pennsylvania governor) Ed Rendell and his staff concluded that the transitional work option could work for Philadelphia. Donald Kimelman, manager of the Venture Fund at the Pew Charitable Trusts, read the Hughes op-ed and decided to invite...