CEOs: Welfare Improvements Needed

Tuesday, August 22nd 2000, 12:00 am
By: News On 6

WASHINGTON (AP) — The nation's welfare system was dramatically improved by the congressional overhaul four years ago, but poor people entering the work force need help with child care, transportation and training, say top corporate CEOs.

In a report released Tuesday on the fourth anniversary of the welfare changes being signed into law by President Clinton, the business executives say that former welfare recipients have made ``good, productive employees.''

Job retention rates for those workers meet and often exceed those for employees who haven't been on welfare, according to the report.

But the CEOs say that government programs are still needed to help welfare recipients get jobs, citing child care and transportation as the ``biggest obstacles to work.''

``Lawmakers should sustain or, ideally, increase resources for a range of programs that help former welfare recipients stay on the job,'' the report says. ``Partnership companies call for increased emphasis on child care and transportation aid, as they are consistently the two biggest challenges facing new workers.''

The report recommends Congress increase tax credits and child-care grants to cover more working parents and also subsidize transportation and housing costs so welfare recipients can get to work more easily or move closer to their jobs.

The 1996 welfare law encouraged recipients to enter the work force by placing a time limit on benefits, allowing more recipients to work while still receiving benefits and offering incentives to employers to hire welfare recipients.

The corporate executives who signed the report include CEOs of United Airlines, Sprint, Citigroup, Time Warner, Bank of America, Burger King, Monsanto, United Parcel Service and IBM.

The Welfare to Work Partnership, as the group is known, says over 20,000 American employers have pledged to hire at least one person from welfare rolls, employing about 1.1 million former recipients.

Employers report that the average starting wage of those hired from welfare rolls is $7.80 per hour, significantly higher than the minimum wage of $5.15, and more than 74 percent receive medical benefits. More than 44 percent of hires, the report says, get a 401(k) matching savings plan.

The report is critical of the way some states have used federal welfare funds. While some states have spent the money responsibly and creatively, others have used the funds to offset state spending instead of directly supporting welfare recipients and low-wage workers, the report says.

The report also recommends loosening the federal requirement that welfare recipients find jobs.

The definition of work activities should include substance-abuse treatment, domestic violence counseling and other special needs, and Congress also should give a break to workers who need longer than five years to get off welfare because of low starting pay, the report says.