Subsidized jobs and how they can fit in welfare to work

Chairman Reichart, Ranking Member Doggett, and other members of the committee: Thank you for the opportunity to testify today before the Subcommittee on Human Resources of the House Committee on Ways and Means. 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 (AEI). Prior to joining AEI, I spent 18 years working in government social services programs for the State and City of New York. From 2004 to 2006, I was commissioner of the New York State Office of Temporary and Disability Assistance where I was responsible for the oversight of subsidized jobs programs as well as other public assistance programs in New York State. For the seven years directly before I joined AEI, I was the commissioner of the New York City Human Resources Administration and was deeply involved in the implementation of a somewhat successful subsidized jobs program. My extensive experience with the management of subsidized jobs programs has given me considerable insight into how these programs are actually serving American workers- insight which I would like to now share.

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 (see Figure 1).1 The strong emphasis that programs such as Temporary Assistance for Needy Families (TANF) 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 the resulting increase in work opportunities and consequent earnings was the main reason child poverty and overall poverty fell during those years: more work force participation, especially by single mothers, resulted in higher earnings and a substantial decrease in poverty. Full time employment is, and has been, the most constant remedy to economic downturns and resulting increases in the poverty rate.

Subsidized jobs and how they can fit in welfare to work by American Enterprise Institute

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