WHEN MOM MUST WORK:
FAMILY DAY CARE AS A WELFARE-TO-WORK OPTION

3.0 Welfare-to-Work in North America

3.1 Welfare-to-Work in the United States

One welfare-to-work strategy is to make low-wage work more attractive by slashing welfare benefits. As the OECD notes, few countries have gone this route though because minimum income schemes are considered to be at a subsistence level and the impact on the disadvantaged would be negative. However, the United States, in addition to sharply reduced benefits, has restricted eligibility to people in need, and introduced work-for-welfare (workfare) with accompanying sanctions for non-compliance.

3.11 Work-For-Welfare (Workfare)

United States workfare was established on a broad basis with the 1981 Omnibus Reconciliation Act. State workfare programs vary considerably, with reasonable quality and voluntary programs at one end, and more punitive work-for-welfare at the other end of the spectrum.58

Workfare, as a strategy, is motivated by ideology. Workfare is viewed as a way to counter the tendency of people, who are assumed to be indolent by nature, to choose "generous" programs over work by making them work (or "participate") for program benefits.59

Under the 1981 legislation, earnings exemptions60 were limited to four months and deductions for work related expenses were reduced; and the imposition of participation requirements, monitoring, and sanctions for non-compliance were increased. The exemption of single parents with children under age six from participation was lowered to permit states to make participation mandatory at age two. Welfare-to-work involved a mix of programs: pilot employment and training; the use of welfare as wage subsidies; job search; and work-for-benefits workfare.61 However, due to severe cuts in funding through the 1980s (by 70%) and thus no money for these programs, the main program approach taken was job search.

The 1988 Family Support Act included as its main component the Job Opportunity and Basic Skills Training (JOBS) program. JOBS required states to provide education, training, and work placement opportunities, and required recipients to participate. However, funding was constrained, and proposals to raise minimum wages and expand child care were abandoned. A major and comprehensive study of welfare in Ontario examined United States workfare at that time and simply concluded that it did not work.62

By the early 1990s, states across America had dramatically cut assistance, enacted strict time limits, severe income rules, and tightened eligibility requirements. A number of states eliminated payments for non-disabled individuals. In Michigan, Ohio, Illinois, and Pennsylvania 350,000 single recipients were labeled employable and were terminated from income support. The majority did not get jobs and those that did only got temporary, low wage, and/or part-time work. Homelessness, health problems, and hunger mushroomed among former recipients. More than one quarter of Michigan's former single recipients were homeless one-half year following termination. In Pennsylvania, a quarter of former recipients had worse health problems, and a third reported health problems that kept them from working.63

In 1996 Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, which replaced AFDC with Temporary Assistance to Needy Families (TANF). The new law included some positive measures.

One positive aspect was that minimum wages were increased as part of the welfare reform package despite opposition and concern. After the hike, unemployment continued to drop and job growth continued. As Business Week later commented, "(a) society with a work ethic needs jobs that pay a living wage." The minimum wage hikes did not have an adverse effect on employment growth and assisted recipients in their transition to work.64

State welfare-to-work studies indicate that adults who leave welfare typically have low earnings, working at the minimum wage or just above it. In Oregon, increases to the minimum wage boosted earnings of recipients working at and just above the minimum wage. The share of recipients finding work rose modestly after the increase in minimum wage, suggesting no negative change in employment opportunities, and that improved wages were helping families make a successful transition to work.65

Under the 1996 welfare reforms, the Earned Income Tax Credit (EITC), an earned income supplement, was expanded. The maximum credit was $2,312 for persons with one child and $3,816 for persons with two or more children. The maximum credit was $347 for persons without children. To claim the credit earned income had to be less than $26,928 for a family with one child and $30,548 for those with two or more children, and less than $10,200 for those with no qualifying children. A number of states are also experimenting with income supplements as incentives to obtain employment.

In 1996, among working families, the EITC had a larger effect than any other program in reducing the number of poor children and the severity of poverty. However, despite an enhanced EITC and improving economy, between 1995 and 1996 child poverty rates remained unchanged. This is attributed to state welfare reforms that were already in place in 1996, resulting in a substantial number of children no longer receiving social assistance. 66

Other aspects of the 1996 reforms are controversial. Federal cost sharing was converted from matching every dollar of state appropriations with between one and four federal dollars, to a block grant of a fixed sum. A lifetime 60-month time limit on receipt of welfare was also introduced (states can exempt 20% of their caseload from the lifetime limit).

Coercion figures prominently in American welfare reform. Shortly after TANF was introduced, more than one-third of states had adopted more restrictive time limits than the five-year rule (for example, 24 months in any four-year period in Florida, no more than 18 months in Tennessee). TANF sanctions are harsh. Thirty-six states had adopted full family sanctions (100% loss of cash benefits) for repeated failure to comply with work requirements. Seven states had lifetime bans for "repeat offenders".

The federal block grant devolved more control to the state level and created incentives to reduce welfare rolls. If welfare costs rise, states pick up the extra cost. If welfare rolls decline and costs are reduced, states receive the same level of federal grant, thus a windfall.67 New York received such a windfall, out of which was funded a union-based home child care model in New York City, reviewed in detail later in this study. Funding of these types of initiatives is however dependent on a surplus in the welfare envelope.

But reform has not always motivated by cost saving. In Wisconsin the public cost of child care has been four times greater than welfare savings. For 56% of families, the day care provider received a subsidy payment, which had been higher than the family's combined earnings and W-2 payment; about one-third (31%) of families showed lower total wages than the state day care payments made to their child care provider 68This is an indication that welfare reforms are driven by ideology as much as costs.

There is concern whether welfare reform depresses the low-end of the labour market. As a minimum income scheme, welfare provides recipients with an income alternative to the worse jobs. Cutting welfare benefits and flooding the labour market with people desperate for any work can displace workers and drive down the earnings of the working poor and near poor. A research study estimated that the earnings of the bottom 30% of earners could fall by 11.9% on average to absorb the million new low-wage workers that welfare reform would produce in the United States 69

Conclusion - The US has embraced the workfare approach to welfare reforms over the past two decades, in which recipients are viewed as indolent, and the main goal is to get people off welfare and into any job as quickly as possible. Measures include deep cuts to benefits, restricted eligibility, mandatory participation and work-for-welfare, and sanctions for non-compliance. Among the many concerns about these reforms is the potential to depress the low-end of the labour market. Reforms have included some positive measures such as increased minimum wages, an enhanced Earned Income Tax Credit, state experiments with income supplements, and some efforts to address the supply of child care.

3.12 The Impact of United States Reforms

The decline in United States welfare caseloads has been dramatic. Between 1994 (the year welfare caseloads peaked) and 1998, the national caseload declined by 43%, and by as much as 87% in Wisconsin, 61% in South Carolina, and 55% in Texas.

However, job growth rather than welfare reform has been the main reason for declining welfare caseloads. In January 1999 the national unemployment rate stood at only 4.3%. Indeed, one study estimated that in 26 states where welfare caseloads had declined by at least 20%, economic growth accounted for 78% of the decline (1993 to 1996). State welfare reforms only accounted for 6% of the decline in caseloads.70

A recent national study examined state studies of what happened to people once they left welfare. Employment rates among people who left welfare ("leavers") and remained off were between 65% and 80%. However, employment rates among those who were sanctioned (i.e., full or partial cuts to benefits for non-compliance) were even lower: only about 50% or less (e.g., 30% in New Jersey) were employed. Nationally, one-quarter of leavers are not working, nor are their partners.

Most who find work are poor - often poorer than when on welfare. Former recipients who are employed tend to work in low paying occupations (e.g., sales and services), and 71% earn below the three-person United States poverty line ($250 a week). Many go hungry, and lack medical care and stable housing. In state studies, between 57% and 87% of employed leavers worked 30 hours per week or more, indicating high levels of part-time employment.71

In Wisconsin employment prospects for those forced from welfare were precarious with less than 4% of recipients holding jobs that pay family sustaining incomes. Close to one-half of Wisconsin's leavers had incomes that were lower than when they were on welfare, and, among families with three or more children, 62% had lower incomes than when they were on welfare. An assessment of Milwaukee's program found only 818 of the 19,074 jobs held by single parents paid family-sustaining wages.Low earnings were directly related to the insecurity of low wage work. Only 25% of single parents under Wisconsin's mandatory work-for-welfare program held the same job in the year after leaving welfare.72 73

US reforms have created a revolving door of welfare-to-work in deep poverty. The portions of former recipients who return to welfare vary by location, (e.g. 50% in one study) but are substantial: about one-third return to welfare nationally. Rates of unemployment are substantially higher for former recipients. They also have low earnings and weekly hours, intermittent work, and are at greater risk of quits/firings due to conflicting family responsibilities. As such, protection for them from unemployment insurance is unlikely, only 20% of former recipients are likely to qualify for unemployment insurance.74 Former recipients will cycle on and off welfare simply because the labour market, other income supports and services (UI, training, child care) provide no other alternative.

This is also of concern given state lifetime limits, (dubbed "the welfare clock") for welfare receipt. However, beyond the "welfare clock", other aspects of welfare reform already act to discourage receipt. Complicated procedures, requirements and sanctions serve to deter people in need from applying or staying on welfare. The rise in the number of people who after preliminary inquiries about assistance never come back is substantial.75

TANF sanctions are punitive. The sanction rate varies widely: whereas half of families were sanctioned in Delaware, in South Carolina the sanction rate was 3%. However, surveys on the duration and level of sanctions suggest a trend toward more severe sanctioning. A study of three states with full sanctions (100% loss of cash benefits) found that these states had higher than average caseload declines. Yet a study in Delaware found that full sanctions were no more likely to increase compliance than partial sanctions.

In a Utah study on the impact of sanctioning, two-thirds of sanctioned recipients reported severely negative consequences, especially in terms of stress and mental health, and their ability to provide for children. In a Michigan study, three-quarters reported insufficient money for food and had to rely on family and charities. In Wisconsin, half the in-school youth whose families were sanctioned because of their children's poor attendance ("learnfare") dropped out of school completely.

Sanctioned families are likely to have more barriers to employment than non-sanctioned families. Families sanctioned in Michigan were 50% more likely to have been involved with child welfare services. A Utah study of families sanctioned because they failed to participate in required activities found 23% had lacked transportation, 18% lacked child care, and another 43% and 20% respectively could not participate due to health and mental health problems. Three-quarters of families sanctioned in Michigan had one or more barriers to employment. Sanctioned clients are more likely to not understand TANF rules, and the consequences for non-compliance. Multiple studies found higher sanction rates among those with the least education and work experience, and longer prior receipt of assistance. The risk of being sanctioned may increase as caseloads fall and those who remain are the most difficult and long-term cases. 76

Mandated work for welfare has yielded modest results. Evaluation studies found the most effective welfare-to-work program produced above welfare earnings of $8.40 a week or $2,000 over a five-year period. 77

Nor did mandatory programs result in lifestyle changes. A longitudinal study of 6,000 teen parents required to participate in mandatory work, training or educational programs found no change in the participants future employment prospects and produced few significant differences in marriage, living arrangements, fertility or access to child support.78

A 1998 national study concludes that the vast majority of state welfare policies adopted under reform are likely to worsen the economic security of poor families. While a few states made choices aimed at improving the lives of poor families, most are disinvesting themselves of the poor.79

Conclusion - TANF sanctions are harsh and often patently unfair. Caseload decline has been dramatic. However much of the decline is attributable to employment growth rather than welfare reform. Recipients who leave welfare for work remain poor, often poorer than when on welfare. Work brings low earnings and weekly hours, is often intermittent and precarious. The risk of unemployment is high, yet few will qualify for unemployment insurance. They remain poor, often poorer than when on welfare. Because reforms do little to develop long-term employability, large portions of those who leave welfare for work return to welfare. US reforms have created a revolving door of welfare-to-work in deep poverty.

3.13 The Affect of Transitions Into and Out Of Poverty/Welfare on Child Development

The National Academy of Science urges that the central challenge of welfare reform is to not just move families into the workforce, but also to reduce levels of child and family poverty. Moving from welfare poverty to in-work poverty, or cycling between the two, has very negative implications for the lives of children. Figure 2 illustrates the percentage increase in reported child maltreatment and in the number of children placed in substitute care between 1984 and 1994. Across the United States, there was a 39% increase in reported child maltreatment and a 36% increase in substitute care. In Los Angeles, and in the state of California, the increases were even more striking: reported maltreatment increased by 256% and 291% respectively, and the number of children in care increased by 53% and 87% respectively. A number of factors account for these increases. However, poverty is one factor commonly associated with real increases in the incidence of child maltreatment. Poverty harms children.80


As illustrated in Table 6, children in families who were continuously on welfare from 1986 to 1990 were 1.6 times more likely to exhibit high levels of behaviour problems in 1990 than children in families who were not poor throughout the four-year period. However, children whose families exited welfare but not poverty, fared less well: children were 2.3 times more likely to exhibit high levels of behaviour problems. Children fared even worse where families made a transition from not being poor to welfare.

Table 6: The Affect of Welfare/Poverty Transitions on Children (1986 and 1990 for Children Aged 7 to 12 in 1990)
	A) Chance of Being in the Worst Quartile of Behaviour Problems		B) Chance of Being in the Best Quartile of Home Environment Quality
	Not Poor 1986	On welfare 1986	Not Poor 1986	On welfare 1986
Not Poor 1990	1.0 (reference group)	-	5.3	-
Poor, not on welfare 1990	-	2.3	-	1.6
Poor, on welfare 1990	3.5	1.6	1.9	1.0 (reference group)
Source: adapted from the National Academy of Science: 1996, Figures 1 & 2, citing Kristen Moore et al., 1994.

Similar results were found for measures of nurturance and cognitive stimulation. Children whose families were not on welfare or poor were more than five times more likely to live in homes where there were high levels of warmth and stimulation than were children whose families were on welfare throughout the four year period. The home environment for those children whose families had left welfare but remained poor was not significantly different from those of children whose families had been on welfare continuously. Other research indicates that moving families off welfare was not associated with better cognitive outcomes for children if family income remained near the poverty line.81

Conclusion -- The research on the impact of transitions in and out of poverty on child development underscores a most important point: welfare reform must reduce poverty. The research also has serious implications for home child care as an employment option. If home child care earnings in combination with other income and in-kind supports do not lift the provider from poverty, then both her children and the additional children she cares for may be at risk.

3.2 Welfare Reform and Child Care

3.21 Quality, Affordability and Availability of Care Problems with child care affordability, availability and quality impede mothers from participating in the labour market and in job training. Child care is among the most commonly identified barriers to training and finding and retaining work. 82 83 84 Next to health related concerns, child care problems were cited by former welfare recipients as the most prevalent reason for job loss. 85

There are two different approaches to considering child care as an employment strategy. One strategy simply considers child care as necessary to support mothers' employment efforts with minimal or no attention to quality and the effect on the development of children. The other approach emphasises quality care as a way of both supporting mothers and securing a good start in childhood, later educational success, and the prospect of a productive adulthood as a long-term anti-poverty measure.

Research indicates that the road to quality care is the best route. Care that is safe, dependable, and developmentally enhancing is important not only to children, but also for the mothers' efforts to prepare for and maintain work. Quality, safety, and flexibility are especially important. In one state study of its welfare-to-work program, mothers who were assured of the safety of their children's care and trusted the caregivers were twice as likely to complete the training program as those who did not.86 87

Poor single mothers are reported to be less satisfied with the child care they use than other mothers. This is significant since parents tend to rate the quality of their children's care much higher than child development experts. Surveys of parent satisfaction typically find that 95% or more parents are satisfied with their care arrangements. Yet only 66% of low-income, employed mothers said they were satisfied and 41% said they would change their child's care if they had a choice.88

Nevertheless, welfare-to-work in the United States appears to be largely concerned with simply increasing the supply of care with little regard for quality.

A study of home care providers and child care centres used by low-income families in three states raises disturbing questions about the quality of existing care (Figure 3). Three-quarters of children of low-income families (incomes under $20,000) in family and relative care arrangements were observed to be in unsafe, unsanitary, and unresponsive care arrangements. The other one quarter of children were in arrangements that only met a minimal standard. None were in arrangements that were rated as good in quality (as rated by the Family Day Care Environmental Rating Scale).

Centre-based care only looks better relative to the abysmal standards of family day care. Almost a fifth of children from low-income families in centre-based care in this study were found to be in arrangements of an unacceptable standard. Most low-income children (62%) were only provided minimal care, and only a fifth of children were in arrangements that provided good care.89

Affordable access to any child care is a problem. Though child care costs can run between $4,000 and $10,000 per year, state subsidy programs are under-funded, therefore, eligibility is very restricted. In many states, earnings as low as $20,000 a year for a family of three can disqualify that family from subsidy eligibility. Even those who do qualify may not get help. As of January 1998 half of the states were turning away eligible low-income families or putting them on waiting lists. California, for example, has 200,000 families - mostly low-income workers, not welfare recipients - on its waiting list for child care assistance. Often, parents who do qualify and get help are given such low rates of assistance that they are either limited to caregivers who charge little, or must take on a large portion of the expenses themselves.90


Single mothers spend a much higher proportion of their family income on child care (23% versus 9% for higher income families). They are more likely than married poor women to rely on their families for child care because no or minimal fees are charged.91 However relative-care is not always the mother's first choice. According to Hofferth's findings, those using a relative are most likely to want to change arrangements, while those using a child care centre are least likely.

Nor is relative-care always an option. An Illinois study reported that two-thirds of families said they had no friend or relative who could provide care. 92 In some case relatives were not the best choice. Galinsky found that children were less likely to be attached to providers who are relatives. Relatives were least likely to be providing care because they were motivated by a desire to care for children. Sixty per cent of the relatives interviewed were providing care to help out the mother and only 25% viewed child care as their chosen job.93 The findings point to the importance of caregivers freely choosing this work.

In at least one program, relative-care was cited as criminally dangerous. Washington's Department of Social and Health Services cut off subsidies to families who hired 207 relatives or friends with criminal histories. Thirteen were registered sex offenders. Washington requires criminal reference checks for licensed child care centres and homes. There are no regulations for its Working Connections Child Care Program, which subsidises care for parents leaving social assistance.94

Location and hours of care are also factors. According to the findings of the 1990 National Child Care Survey, one-third of working poor parents worked weekends, nearly 10% worked during evening, and one-half worked rotating schedules. However few child care centres or family day care providers offered weekend, evenings or part-time care.95 Transportation to child care was another barrier. The survey indicated only 40% of centres and 28% of regulated family day care providers were accessible by public transportation.

An assessment of Wisconsin's welfare reforms highlighted the importance of transportation to recipients, judging it more beneficial to finding and keeping employment than a high school education.96 Centre-based care was scarcer in poor neighbourhoods than in other areas. Child care was often needed immediately by recipients to begin work or training, however, studies showed that it takes from two to seven weeks to find acceptable child care arrangements.97

Children's health problems were a major barrier for a number of parents. A Wisconsin study found that 16% of mothers on social assistance had children with chronic health and developmental problems but little appropriate child care was available for these children.

Retaining child care support after a recipient leaves a social assistance related program was also a barrier to parents who continued workforce participation. Wisconsin dramatically expanded child care funding as part of its welfare transition initiative yet only 7% of all families receiving public child care assistance were low income earners who were off the system.98

Training recipients for work in child care has the potential to expand the child care supply for mothers entering the workforce. However to qualify as an effective strategy it must simultaneously be accessible to the working mother, offer a living wage to the mother delivering the care, and supply quality care to their children. In the following section, different models of child care training for welfare recipients are examined.

3.22 Training Recipients for Work in Child Care

Temporary Assistance to Needy Families requires states to reach 50% work participation by TANF recipients by 2002 or face financial penalties. It affects four million adults and nine million children99 who receive AFDC benefits.

Washington provided considerable financial support to the states to support welfare reform, including substantial funding for child care.100 Regulations also require states to immunize children who receive child care subsidies, educate parents about child care choices and set minimum health and safety regulations in centre-based and family day care settings. Increased federal grants to expand and improve public housing were also included in the reforms. 101

The Centre for the Child Care Workforce (CCCW), Washington, recognized the impending impact on American child care services. TANF recipients are competing with other working families for limited child care resources, and the demand for affordable, quality care for children has mushroomed. The challenge for both governments and the community has been to build the supply of services quickly enough to meet demand. State governments have responded with a number of initiatives to train TANF recipients for work in child care. 102

In 1998, the CCCW compiled a list of the initiatives (Table 7). It continues to track the projects while raising concerns about initiatives that promise inexpensive or easy solutions to building a supply of child care and viable employment. Research consistently rates most child care in the United States as mediocre and a large portion of the child care work force earns poverty-level wages and receive little or no benefits.103

Table 7: State Initiatives to Train TANF Recipients as Child Care Workers
No state funded program and no plans to implement them	No current plans, but may include in future	Training programs may include TANF recipients	Training programs targeted to TANF recipients
20 states	2 states	6 states	11 expanded to target TANF recipients
			10 pilot projects underway
			1, New Jersey, state-wide policy

Nor is everyone suited to this work, the CCCW warns. Child care is a demanding, skilled job and the nature and circumstances of the lives of many recipients would exclude them as candidates. Studies have found that a large portion of welfare recipients have limited education. Fifty percent have not completed high school or equivalency.104 Between 25-50% have limited work history. 105 An estimated 60% of recipients have been victims of domestic violence, and violence tends to be an issue in their lives.106

3.23 Features of Child Care Training Programs for TANF Recipients

The programs are delivered through state, county, private companies, and foundations, and through collaborative efforts. Where programs are not delivered directly by states or counties, these jurisdictions contract with either private or non-profit agencies.

Some are ongoing programs. For example Head Start programs have a long history of training parents and others as child care workers. Since Head Start focuses on low-income families, its training programs would include TANF recipients but are not targeted to them.

Many pilot projects are administered by child care agencies, which are contracted to recruit, screen, train and place TANF recipients. Programs range from extensive to basic. Some, such as California's Mason County project, require three years of both post-secondary academic instruction and practical experience. By comparison, the District of Columbia offers 40 hours of training in health and safety for providers who will operate outside the licensed system.

Michigan offers direct funding to the recipient to purchase training. This, however, is rare. In the majority of cases the funding for programs flows through counties or agencies.

Only New Jersey has adopted as public policy the recruitment of TANF recipients as child care providers. All 21 counties have been directed to design programs meeting state guidelines. The suggested curriculum is a two-week training module with classroom and on-site components for family child care or centre-based care. Family care providers receive additional consultation in business practices. Providers who rent must have landlord approval.

3.24 Child Care Careers Program, Wheelock College, Boston

The Child Care Careers Program at Wheelock College, Boston,107 was founded in 1989 and is recognized as a premier early childhood training institution.

Funding is provided through the Economic Development Industrial Corporation of Boston, the Massachusetts Department of Education and (Pell) educational grants available to eligible students on an individual basis. The College provides in-kind institutional support but not direct funding to the program.

The course features:

· A 9 month course offering 15 college credits qualifying the graduate to work as an assistant teacher in group child care.

· Enrolment that is limited to 25 students, 80% of spaces are reserved for TANF recipients. The majority of students are Latina and African-American women. They range in age from 19 to 50, with most between 22 and 32, and are parents of young children.

· The program has a vigorous recruiting and screening process and is able to choose the best applicants, turning away 3 out of 4.

· Students are eligible for state subsidized child care vouchers to enroll their own children in local child care programs during the course of training and for the first year of employment. Training is split 50/50 between in-class instruction and on-site practice.

· Training covers children 0 to 8 years.

· Weekly life skills classes are mandatory.

· 90% of graduates find work. Staff provides support for job searches.

· Graduates may continue their education with the college. Tuition is free for courses with vacancies. 48% of the program's graduates are enrolled in Bachelor of Art level courses.

· Average annual wage upon graduation is $20,000, after 6 years earnings are $27,000.

The program cites a number of features that account for its success. It has a good reputation. Participants are well screened. Staff are assigned to mentor each student. Life skills training is mandatory. Child care is continuous through training and after employment begins. The popularity of the program allows for the selection of participants with the fewest barriers to making the transition from welfare-to-work. The increase in federal and state funding for child care has ensured a growth of jobs in the sector.

3.25 The Consortium for Worker Education Satellite Child Care Project New York108

The Satellite Child Care Program, opened in 1998 at the initiative of District Council 1707 of the American Federation of State, County, and Municipal Employees. The union, which represents New York child care workers, acted to circumvent the potentially negative impact of the state's pending welfare reforms on the wages and working conditions of its members.

Funding for the Satellite Child Care Program is provided by the State of New York. Providers are unionized employees, work a standard work day/week, and receive health, vacation and related benefits. The union was able to push the program through the legislature largely because the state was under pressure to spend or lose the federal funding provided for welfare reform initiatives.

A number of city and community partners are involved in the program. The Consortium of Worker Education, an established non-profit training agency, receives state funding and serves as the employer. The Consortium contracts with local child care agencies to recruit, train, support, and monitor providers and to recruit children for the family day care slots. District Council 1707 is the collective bargaining agent.

Community agencies, welfare and housing authorities are enlisted to identify potential providers who are largely residents in the New York City Authority and other publicly subsidized housing. All participants are TANF recipients and continue to receive welfare benefits throughout the training process.

Training, inspections, and monitoring are more stringent for Satellite homes and providers than state requirements for its licensed family day care providers. A number of steps are taken before an applicant is accepted:

1. An initial recruiting meeting provides an overview of the program, reviews eligibility requirements, and assesses the applicant's reading and math levels.

2. Successful applicants participate in a one-on-one screening interview and additional psychological assessment. To proceed, recommended applicants must submit to a criminal clearance check and home inspection. At this point the housing authority is expected to take the necessary steps to make the home "child care ready."

3. Child care is arranged for the provider's own children. A two-week prevocational training orientation includes a review of child care regulations, site visits, health and safety training, child abuse clearance check, and health screening for all household members. Spanish speaking applicants receive ESL training to bring their English to emergency communication levels - a minimum requirement for Satellite providers.

4. This is followed by 20 weeks (35 hours) of training. Fifteen hours per week are spent in-class covering child development, activity planning, nutrition, safety, and provisions for children with special needs. The balance is spent participating in child care programs. Classroom training is provided by Child Care, Inc., New York's largest resource and referral agency, specializing in entry-level and advanced training of family day care providers. A 20-hour per week placement in the child care centre satisfies the mandatory community work requirement for welfare benefits. The agencies are required to provide attendance and progress reports to welfare authorities.

5. A final interview and home inspection follows. The centre provides start up equipment. Employment begins with a three-month probation.

Each provider averages four children. They are encouraged to enroll their own children in alternate child care. The program maintains that this enhances the status of the work and promotes professionalism.

Families access care through participating day care centres. The selected centres are located in and around public housing projects. The arrangement is open to all families, but is almost exclusively used by TANF recipients participating in mandated work activities, and low-income working parents living in New York housing. The program has taken steps to recruit the children of other union members in an effort to expand the program outside the housing projects and to provide more socio-economic integration.

Day care centres manage the 40 hour work week by partnering providers in the same housing complex. For example children who are dropped off very early spend the first part of the day with the 'intake' provider and the remainder with their regular caregiver who starts and ends the work day later. Partnering also allows stable backup when providers are ill or on vacation. Ratios are maintained throughout the day. As in group child care settings, children develop close relationships with more than one caregiver.
Initial Evaluation of the CWE Satellite Child Care Project:

· a positive retention rate of providers;

· transferable training for the child care sector;

· the provision of sustainable employment;

· quality, educationally focused care for the children, and support for their parents to participate in work and/or training;

· parents report high rates of satisfaction with the care provided;

· additional resources for child welfare authorities who are able to place children at risk with Satellite providers;

· enhanced self-esteem for providers who view themselves as early childhood educators;

· support to severely depressed communities through job opportunities, quality services, and improved housing maintenance by the authorities; and

· enhanced community cohesion ( providers are viewed as community leaders; neighbourliness between parents and providers extends beyond the child care arrangement; children living in city housing view the homes of providers as safe places with responsive, caring adults.

3.26 Wisconsin's Workfare 'Miracle'

Wisconsin has been at the forefront of workfare, and, in recent years, the approach has been of particular interest to the government of Ontario. Over the past decade, welfare caseloads in Wisconsin dropped by 70% (which also coincided with an unemployment rate of 3% to 4%). Between 1986 and 1994 welfare benefits were chopped by one third. In 1996, Wisconsin passed the first state plan abolishing Aid to Families and Dependent Children (AFDC) and replaced it with "Wisconsin Works" (W-2).

W-2 reflects the trend toward more state control of welfare, and an explicit shift in emphasis from education and training toward moving people as quickly as possible into any available job or job placement (a so called "jobs first" approach). Local governments were required to reduce their caseloads by 15% to 25% or have their welfare system privatised. Recipient benefits are reduced in proportion to any failure to carry out the number of hours specified for workfare and job search. Non-compliance results in all support being withdrawn. A five-year lifetime limit on receipt of welfare was introduced. 109

Under W-2 parents who find work on their own receive food stamps and tax credits. Those who do not are placed in subsidised employment. For those with major barriers, a program of work activity and twelve hours per week of training and education is required. Parents under 18 are ineligible for welfare. Access to food stamps, and health and child care requires that teens be in school and live with their parents, or in foster care or a group home.

Child and health care user fees are set at $7.5% for families earning minimum wage, with the percentage rising as income increases. When family earnings reach $26,650 for a family of three all subsidies end with the exception of tax credits.110

A central component of W-2 is child care. The state has increased its child care budget six-fold to pay for the care of children whose mothers must find work. Many W-2 participants have found employment in the expanded market for family day care.

Wisconsin recognizes four levels of child care - one level of group care and three levels of family day care. The state licenses all group centres and licensed family day care providers. Counties and Tribal Councils provide two levels of accreditation for providers based on state legislation - certified and provisional. Provisional family care is the newest category and the one with the fewest requirements.111 It was designed to both meet the expanding need for child care and to provide jobs and/or placements for welfare recipients to meet their community service requirements.112 Licensing or accreditation is required to receive state subsidy payments.

Counties contract with community agencies to certify the provider, inspect the home, provide background checks, investigate complaints, administer the federal child care food program payments, and match providers with families needing care.

State Licensed Provider

If caring for 4-8 children (including the provider's children if under age 7), state licensing is mandatory, and requires:

· Initial training of 40 hours (plus 10 more if caring for children under age 2);

· 15 hours of continuing education per year;

· Pre-licensing consultation with Wisconsin Child Care Improvement Project;

· One or two home visits during licensing process;

· An annual home visit after becoming fully licensed;

· Written policies for parents when child is enrolled;

· Fee: $15.12 for a 6-month provisional license; $60.50 for a 2 year license; and

· Licensed providers are eligible to receive public funds for subsidized children.

County Certified Provider the maximum number of children is 3 under the age of 7 plus the provider's children. Becoming 'county certified' involves:

· Initial training of 20 hours;*

· 5 hours of continuing education required annually;*

· Home visits by 4-C staff are made upon initial certification, annually upon renewal, if a complaint is filed, and if the provider requests assistance with child care issues;

· Criminal background check and child welfare check are conducted.

No fee is charged. Benefits include a start-up business file; child development pamphlets; health and safety materials; food program eligibility; free parent referrals from 4-C database; 4-C Focus newsletter. Providers are eligible to receive public funds for subsidized children.

* Not required for provisionally certified provider
The City of Madison has different qualifications and supports for its accredited (certified) providers although the ratios remain the same, as determined by state regulations. They are:

· Maximum 1-3 children under age of 7 years plus the provider's children;

· Initial training of 20 hours, 40 hours if caring for infants or children with special needs;

· 20 hours continuing education required annually;

· Monitoring inspections to meet city quality standards; 4-8 home visits annually;

· Assistance meeting state child care regulations;

· 5 hours of respite care every 3 months; more available for a fee ;

· Access to special curriculum units and equipment loans;

· Business support and assistance with contracts, rates, parent enrolment;

· State Grant Assistance;

· Free training and annual family child care conference;

· Provider support groups; and

· Free High Scope training through the City of Madison Child Care Unit.

· The provider is eligible to receive public funding for subsidized children. Fees are $20 for enrolment fee and quarterly fees of $25 (reduced to $5 for low-income providers).

Source: C-4 Community Co-ordinated Child Care http://4-c.org/regs.htm

Variations between counties makes a state-wide assessment of family child care in Wisconsin difficult. Child care quality evaluation studies are not available however a three-month investigation in 1997 by the Journal Sentinel into Milwaukee County's program found serious violations.

The program experienced start-up problems. Child care centres and providers stopped accepting children referred by welfare agencies when the county fell months behind in subsidy payments. The providers' strike left parents scrambling for alternate arrangements when they were denied any reprieve in work participation until the mess was sorted out.113 Teen parents, who had priority status for child care, were also caught; school boards reported that when denied child care mothers were dropping out of school.114

While all new programs experience implementation difficulties, the more serious problems uncovered by the investigation involved the lax screening of providers and weak enforcement of regulations. There were cases of providers receiving payments for more children than regulations allowed. Monitoring was minimal, complaints inadequately investigated, and suspect providers were allowed to stay in business. Health and safety standards were routinely flouted. One provider was found with 34 children, including nine infants, when her certification limited her to three. The county was billed for 17 of the children and forwarded the payment.

County certification processes did not routinely involve criminal reference clearances, or checks with child welfare authorities. In some cases providers received their certification by mail without a home visit. Three providers were involved in substantiated child-abuse complaints involving their own children, but two were allowed to continue to take in children under the state's subsidy program.115 Another provider, who lost her state license when a family member residing in the home was convicted of child abuse, received county certification and continued to operate.116 In other cases, when provider certification was revoked other family members applied for and received certification.

Despite the problems Milwaukee eliminated the annual inspections and licensing renewal on the grounds that the county needed to concentrate its resources on establishing more family child care homes to meet escalating demand generated by W-2. The agencies managing the counties' child care subsidies were ill-equipped to provide quality assessments of homes to inquiring parents. Information on complaints or convictions was not available. Complaints made to state licensing officials would not make it to county files. The investigation found agencies were slow to investigate serious infractions, record keeping was scant, and follow up action slow.

The problems experienced by Milwaukee have been attributed to a system that expanded rapidly, without adequate infrastructure support. Existing licensing regulations meet established quality standards and with experience, enforcement will improve.117 The state can be credited with recognizing the barrier the absence of child care presents for families trying to move from social assistance to paid work. Wisconsin's spending on child care to meet the requirements of its W-2 program went from $12.5 million in 1987 to $55.6 million in 1995 and $177 million by 1999.118 Despite the large infusion of public dollars into family day care, the ability of the service to provide both sustainable employment for former recipients and quality child care still faces obstacles.

3.27 Reliance on Low Cost Care

The three levels of family day care providers and their resulting payment schedules is an incentive for both welfare authorities and parents to opt for lower cost care. The higher the level of certification the higher the payment per child.119 County authorities pressed to meet employment targets for welfare recipients and to stretch their child care budget to meet demand are inclined to cut monitoring, enforcement, and support measures, and to steer parents toward the most inexpensive options.

Subsidy rules also make the cheapest care the most attractive to parents. Child care fees are based on a formula including the number of children, child care costs, and employment earnings. The type of care parents choose effects what they pay. Cost of care is, therefore, a major factor, particularly when combined with issues such as location.

This preference for low cost care is demonstrated by public expenditures. New public spending on child care went to increasing the number of certified and provisional family day care homes while spaces in licensed family and group care declined. In Milwaukee alone licensed spaces dropped by half while provisional and certified care increased by 735% and 325% respectively. 120

Not only does the reliance on low cost options affect the quality of care provided to poor children, it reduces the choices of parents with resources who are seeking higher standards of care.

Quality is also affected by the stability of the care offered. The high turnover of children in care reflects the fluctuating job prospects of their parents. Only 17% of children whose parents were enrolled in W-2 remained with the same caregiver for twelve months.121

3.28 Employment Potential

Increased public funding for child care through W-2 has opened up new employment opportunities in the child care sector however former recipients are rarely the beneficiaries. Provider earnings are determined by the number of children in care and the subsidy payment rate. Licensed family care providers who are allowed to care for a maximum of eight children at a higher rate have seen greater earnings under the new system. The average annual subsidy payments for these providers doubled from $12,613 in 1996 to $26,260 in 1998, with some providers receiving subsidy payments of $37,000.122

The expectation that the increased payments available to licensed and accredited providers would serve as an incentive for provisional caregivers (the level that most welfare recipients enter family day care as providers) to upgrade their qualifications has not materialized. Of the 1,550 provisional providers who received day care payments in the 1996 to 1999 period, only 36 (or 2%) had attained licensed provider status by 1999.

Certified providers were more likely to advance to the lucrative licensed group. Still only 10% of those who began as certified providers in 1996 received their license by 1998. (Another 41 certified providers unsuccessfully attempted to become licensed.) Annual payments from subsidies averaged $10,078 for the certified group.

With the exception of eligibility for the child care food supplement program, all equipment, supplies, and facilities are the responsibility of the provider. Parent co-payments are on top of subsidy payments, but parent failure to make co-payments is a recurring problem.

Housing presents a major barrier to recipients qualifying for licensing, The cost of training, licensing fees, and upgrading homes to meet required standards are substantive barriers to households living on the financial edge. 123

Wisconsin is the first large scale initiative to make family day care provision a major component of state welfare reform policy. Child care funding has increased dramatically however recipients have not been the major beneficiaries. Established family day care providers and new providers from outside the welfare population profited from the increased funding and demand for care.

State studies show mothers leaving welfare face considerable obstacles. They lack work experience, high school diplomas or drivers' licenses. Many need help with basic math and reading skills. A sizeable number are in abusive relationships, have had contact with police or suffer from alcohol or drug problems.124 These challenges, coupled with housing barriers, produce particular and significant barriers for those hoping to provide home child care.

3.29 Nebraska - Job Opportunities for Low-income Individuals (JOLI)

Another welfare-to-work strategy that seeks to expand the supply of child care through community job creation is called "employment integration" because in addition to providing training to recipients, it seeks to increase service capacity. 125 An example of the employment integration approach is the Job Opportunities for Low-Income Individuals program (JOLI) in Lincoln, Nebraska.

Overview of the Job Opportunities for Low-Income Individuals Program

Program Goal: Create 125 new in-home child care or other businesses over 3 years.

Program Funding: $500,000/ 3 years (about $4,000/each business)

Program Content:

· Screening: a police check, and a house examination

· Training: 50 hours in child care and business;

· Financial Assistance: $200 on completion;

· Support: monthly networking and business support group, mentoring;

· Other Assistance: loan applications, case management and family assessment.

Program Dynamics:

· Recruiting: many candidates were not appropriate. Targeted recruits through other organisations and in future seek more quality candidates;

· Enrolment: 149 participants over 3 years;

· Education: enrolled had a higher education than those who were not enrolled. 43% of participants had a high school diploma or GED. 31% had some post-secondary education. (Total = 74%)

· Half attended at least one training session;

· Barriers to Participant Self-Sufficiency: financial resources (up to 90% of participants); "support systems" (1/2 of participants); transportation and health care (1/2); adequate housing (1/3); child care (1/5); parenting (1/5); legal issues (1/5).

Results:
Of 127 participants:

· 73% not operating a business; 27% operating a business (34).

· 80% not self-sufficient; 18% are self-sufficient.

(Sources: University of Nebraska, 1999; Johnson, A. Meckstroth, A., June 1998).

While the program may have benefited recipients in other ways, it appears to have had limited success to date in terms of creating child care businesses and moving recipients to self-sufficiency. After 3 years, just over a quarter, (34 participants) are operating a business. Under a fifth (23) are self-sufficient, (it is not clear from the evaluation whether these people are operating a business). Interviews with participants who did establish a child care business indicates that the development of personal and business networks of support was a particular program strength. Program costs come to an average of $3,355 per participant. However, if viewed strictly in terms of how many businesses were created over the 3 years the cost was $14,705 per business.

At the end of the third year half of participants had attended at least one training session on topics around first aid, business practices, and child care. The total training curriculum was 50 hours. Participants were educated people: most had graduated high school, and a third had some post-secondary courses. Barriers to self-sufficiency were quite pronounced, and reflect issues of poverty and social exclusion (problems with money, isolation, housing, transportation, child care, health care, and parenting). The JOLI program wants to secure a better quality of participants in the future.

The employment integration approach to welfare-to-work is more positive than other aspects of US welfare reforms. However, conditions of poverty undermine these efforts. While program supports may have been useful in other ways to TANF recipients the results in terms of increasing the supply of child care appear quite modest. The quality of care was not part of the evaluation. It does not seem to offer a community employment alternative sufficient to allow many recipients to leave welfare. Indeed, given the level of participants' education and the program costs and outcomes, access to mainstream post-secondary education would perhaps be a more viable consideration.

US research into the outcomes of post-secondary education as a welfare-to-work option notes that the assumption that work is the best route to independence is true when work brings job security and high wages. For many parents, however, they will not be able to earn enough to get off and stay off welfare. Studies consistently find that most recipients who acquire a post-secondary education go on to earn sufficiently high wages to be financially independent of welfare and to prevent future poverty. The research urges that post-secondary options be included in personal plans for independence for recipients who qualify and that support and child care while in school be available. (Karier, T. (1998) Welfare Graduates: College and Financial Independence Washington:Jerome Levy Economics Institiute.)

Conclusion -- The US welfare-to-work models cited illustrate the two welfare-to-work transition approaches. The Boston and New York initiatives share common features: intensive screening and training components; child care for the recipient's children both during training and when employment is secured; and on-going monitoring and mentoring. Sufficient public funding for the sector ensures that employment opportunities are available for graduates. From these perspectives the programs meet the criteria for a human resources development approach. As a mechanism to increase the number of child care workers these are expensive projects; requiring substantially more resources than would be required to recruit and train from a different population group. While there are without doubt many personal benefits to participants, earnings on graduation still deliver family incomes below the poverty line.

Nebraska's and Wisconsin's initiatives are also expensive but had much lower success rates with their target populations. Considerably fewer upfront resources went to recruiting, training and assisting recipients to overcome obstacles. In the Nebraska project 27% of participants established businesses and only 18% are no longer receiving welfare. Wisconsin, "threw money at the problem." It dramatically increased public funding to expand child care, including home-based care, as part of its welfare reform package. It assumed enhanced employment opportunities would trickle down to welfare recipients. However less than 2% of recipients who entered the field in 1996 were still providing care three years later.

3.3 Welfare-to-Work in Canada

In contrast to most countries, Canada's social assistance system is highly decentralised. Many OECD countries have centralised social assistance systems. National governments set benefits and conditions of eligibility for the country, and are responsible for the full costs. In other countries, such as the United States, both the national and local governments play a role. In Canada, there are now no national social assistance standards. There is only one requirement: residency can not be imposed on applicants as a condition of eligibility by the provinces.126 Provinces have the responsibility for welfare-to-work policies. As such, benefits and programs vary considerably.

Proximity to the United States and its two decades of welfare reform and workfare has had an impact on Canada. While the Canadian system remains distinct, it has adopted some of the features of American welfare reform. This trend is most evident in Ontario, but began with Canada's federal government.


3.31 Decentralisation and the Shift From Employment Insurance to Welfare

Although the system of welfare in Canada was already quite decentralised, the Government of Canada's decisions decentralised it further.

Between 1990 and 1995, Canada replaced with a block grant its system of dollar for dollar cost sharing under the Canada Assistance Plan (CAP) of provincial welfare and social service expenditures (including child care). This process began in 1990 with a ceiling on federal cost sharing under the CAP for three provinces in which over half of the national caseload resided - just as the country plunged into a recession.

In 1994, as the national caseload peaked, (Figure 4) Canada froze its contribution to all provinces. In 1995, CAP was replaced with the Canada Health and Social Transfer (CHST), a block grant. Due to the cap on CAP, the federal government was already carrying less than its 50% share of welfare costs. It went further and cut cash transfers to the provinces by another $7 billion.

The fiscal pressures on the provinces were considerable. In 1988, 6.9% of Canadians, about 1,853,000 people, relied on welfare. By 1994 it peaked at 10.7% before easing to 8.5%, about 2,577,500 people, by 1998. In Ontario, Canada's largest province, the number of unemployed individuals and welfare caseloads almost doubled between 1988 and 1998.127


Growing welfare caseloads and costs have been the impetus behind public and political frustration with the welfare system, and innumerable changes in welfare policies by the provinces. Some changes were thoughtful. Others were harsh, and played upon the worst stereotypes - the welfare system as over-generous and the poor as lazy and indolent.128

Public frustration about welfare and termination of CAP paved the way for mandatory workfare. The Conservative Party promised mandatory workfare in the 1995 Ontario election, and won. To counter criticism of insufficient child care to implement workfare it was suggested that parents use neighbours, and others baby-sit for welfare. Implementation of workfare was deferred to spring of 1996, just after CAP expired.129

Federal abandonment of welfare was accompanied by constraints on eligibility to the national Employment Insurance program (EI). Figure 5130 illustrates that as the number of unemployed grew and fell between 1989 and 1997, so did the national welfare caseload. As unemployment grew the proportion of unemployed receiving Employment Insurance actually dropped.

The proportion of unemployed receiving regular EI benefits fell nationally from 74% of the unemployed in 1989 to 36% of the unemployed by 1997. By 1997 the percent of unemployed receiving EI benefits had dropped in every province, although the level of coverage varies considerably: from as many as 75% of the unemployed in Prince Edward Island to only 25% of the unemployed in Ontario. 131

By default, provincial means tested welfare programs were the only alternative for many unemployed individuals. The number of welfare cases mushroomed. The federal government and provinces disagreed on the size of the impact of ineligibility for EI on provincial welfare schemes. However, research indicates that in 1998, about one-quarter of unemployed workers who could not collect EI benefits relied on welfare. Individual households absorbed the biggest burden for workers unable to collect EI. About half of these workers relied on their parents or their partners, and the other quarter used their savings, took out loans or relied on other sources of funds to see them through their unemployment spell. 132

Conclusion - Federal decisions to terminate the Canada Assistance Plan and changes to Employment Insurance in a high unemployment environment off-loaded the burden and costs of unemployment onto the unemployed and their families, and onto provincial welfare schemes. The loss of federal protections and cost-sharing under CAP, growing demands and costs on provincial welfare caseloads, and growing public frustration with welfare paved the way for the introduction of workfare.

(Figure 5)

3.32 Who Relies on Social Assistance?

People who rely on welfare are more than just poor; they live in deep poverty with incomes many thousands of dollars below the poverty line. The poverty gap refers to the depth of poverty: that is, the difference between total income and the poverty line. Benefit levels vary considerably from province to province. However, on average the gap between total recipient income (welfare + additional benefits and tax credits) and the poverty line was -$9,614 for a single person; -$6,110 for a disabled person; -$8,284 for a single parent with one child; and -$14,500 for a
couple with two children.133

Surprisingly little is known about people who rely on social assistance. A recent and constructive development was a decision among the provinces to actually collect standard information about welfare recipients. Table 8 provides a profile of the national social assistance caseload, derived mainly from the National Council of Welfare analysis of this new provincial data. The table is divided into six sections (sections A through F) and describes the national caseload by family type, reason for assistance, the distribution of cases among the provinces, levels of education, and type of housing arrangements.

Families With Children - The number of families with children (Table 8, sections A and B) who rely on welfare underscores Canada's lack of progress on family policy. Children are the largest single largest group (39%) who rely on welfare and 70% of them live in single parent families. Individuals living in lone-parent families make up just 7% of the entire population, but accounted for 20% of the poor, and 43% of welfare recipients. The largest component of government transfers to single parents is welfare (39%). (Statistics Canada August 4, 1999 The Daily, Ottawa.)

Single parents and their children are particularly vulnerable: they are disproportionately poor, have low average earnings, have longer spells of poverty, and are much more likely to have to rely on welfare. In 1997, 56% of female lone parents were poor, compared with 12% of two parent families. In 1997 average income before transfers was only $21,040 for lone-parent families. For two-parent families it was $60,721.

Lone parents remain on welfare longer. A study of income dynamics between 1993 and 1996 found that half of lone-parent families were poor for one year or more, and that 18% were poor for all four years. For married couples with children, 12% were poor for one year or more, and only 4% were poor for all four years. 134

Relatively few single parents on welfare receive child support payments (only 20%). The availability of child support is an important factor in determining whether a mother will remain in the work force after leaving welfare. 135

Table 8: Social Assistance Profile, Canada 1997.
A) Welfare Characteristics by Family
Cases			Individuals		Child Support	Other Income: Work		E.I.
Single Parent	425,800	29%	1,186,800	42.8%	20%	19%		1%
Two Parent	157,675	11%	644,350	23.2%	2%	36%		4%
Childless Couples	75,013	5%	150,026	5.4%	-	16%		2%
Single Persons	793,990	55%	793,990	28.6%	-	7%		0%
B) Children and Welfare				Family Size: Number of Children
		Children	% of Recipients	1	2	3	4+
Single		761,000	27.4%	49%	31%	13%	7%
Parent Two		329,000	11.9%	34%	35%	19%	12%
Parent Total		1,090,000	39.3%	45%	32%	15%	8%
C) Reason for Welfare by Family Type
		Single Parent		Job Related		Disabled	Other
Single Parent		46%		29%		8%	16%
Two Parent		-		70%		19%	11%
Childless Couples		-		38%		42%	20%
Single Persons		-		49%		38%	13%
D) Distribution of National Caseload by Province