Welfare-to-work program gets a makeover

The state of Wisconsin is taking a test run at retooling part of its welfare-to-work program to give employers more of an incentive to get involved and potential employees more of the help they need to become answers to the state's skilled labor problem.

Now more than a decade old, the Wisconsin Works program, dubbed W-2, has strived to give those on public assistance a path to meaningful employment through state-created opportunities in the private sector.

The state is now trying a pilot program it has dubbed "Real Work for Real Pay" in three Wisconsin counties, creating a trial run in which some participants in the W-2 program will get more intensive mentoring help from the state than other enrollees while employers will get a direct wage subsidy to help them pay for the workers they take on. It will serve up to 100 W-2 participants in Kenosha, Marathon and Milwaukee counties through Dec. 31, 2009, targeting those who have been on public assistance for at least 60 days without finding steady employment.

The state hopes to take the initiative statewide once the pilot program ends, using feedback from the experience to modify the effort for a larger audience. It also shows the direction Gov. Jim Doyle's administration wants to take the program as it continues to evolve.

"The goal here is for us to help these individuals get real work experience, draw a real paycheck, get the mentoring to be successful and at the same time then help the employers … have a source of talent to fill their job openings, current and future," said Roberta Gassman, secretary of the Department of Workforce Development, which oversees the program.

Program helps families

The W-2 program is designed for low-income parents who have minor children to help them build the basic work skills that they need and get them into a meaningful job. Participants are placed into what's called the W-2 employment ladder with four types of jobs.

Those unable to perform self-sustaining work qualify for transition jobs that focus largely on building the basic skills needed to join the work force. The next step up includes community service jobs, which provide added supervision and support for those lacking the skills and work habits needed in a regular job environment.

At the top of the ladder are unsubsidized jobs for those who mainly need help finding a job and minimal assistance once in one.

The state also has a trial jobs rung that includes a wage subsidy from the state with the expectation that employers will eventually hire those participants on full time. But that step has largely been underutilized since the program was created more than a decade ago, Gassman said.

Only two of the more than 6,000 people enrolled in the W-2 program this April were in trial jobs, which offer employers a subsidy of up to $300 per employee for up to three months.

The pilot program expands on the trial jobs rung with employers typically receiving a wage subsidy of $5.50 an hour for each employee for up to four months. Those W-2 participants will also receive more rigorous mentoring over that period, and employers will be expected to retain the participants in the jobs as unsubsidized employees once the program ends.

"This gives us a tool to involve more employers in the program, which can only bring better outcomes for the W-2 program and the families affected," Gassman said.

John Keckhaver, a research analyst for the Wisconsin Council on Children and Families, closely follows the W-2 program. He said the mentoring portion of the pilot program could also be a boost to employers because it may provide a better path for W-2 participants to transition into permanent employees.

Benefits for employers

Keckhaver said the first few weeks or months of a new job are typically the toughest time for those who don't have much past work experience. The mentoring program can help smooth over the bumps for those employees while providing assurances to employers skittish about hiring W-2 participants who lack an extensive work history.

"They know this employee is getting some help along the way while employed," he said.

Gassman said the pilot program has other benefits for employers.

Even with the recent downturn in the economy, many Wisconsin employers face a labor shortage for skilled employees, particularly in manufacturing, health care and construction. The pilot program was developed with the intent of putting W-2 participants in those high demand industries.

The state believes the new approach could also be beneficial for the W-2 participants, who typically receive a stipend of $673 a month. Gassman said the state hopes receiving a paycheck rather than the stipend will be a boost psychologically for program participants. It also means they will be eligible for the earned income tax credit, which can mean a boost financially.

Madison's Cascade Asset Management used to participate in W-2 and still has several employees in its warehouse that caught on full time, said Jennifer Peters, the company's human resources manager. But it dropped its involvement for several reasons, including the benefits offered by the state compared to the amount of paperwork involved to participate.

The business recycles computer systems, taking them in from companies looking to retire them. It then strips the systems and then puts them back on the market. It looks for entry-level workers who can learn how to take apart computers and then move up into jobs doing inventory and refurbishing.

She said the wage subsidy and mentoring could give the company reason to take a second look at the program.

"We're looking to hire high-quality employees that are going to be here and stay with the company," Peters said. "One thing that we're looking at is people that care grow with the company, who are hired into one position but have the knowledge and capability to move up and grow new skills."

JR Ross is the editor of WisPolitics.com.