(00:00:00) I guess I should fill in between the lines on my background because it might help explain why I'm here and why we've done this program in Massachusetts what my resume doesn't show is that the efforts to get ex-drug addicts employed in New York and the efforts to get disadvantaged youth employed in Boston both failed and they failed miserably and I guess I'm not one to give up. So we kept trying this time with welfare recipients and this one's working but I think in large part because as a society needless to say we learn as we go along and I really want to congratulate you people for spending a week at the seminar with the topic that you've picked for this year because both myself and my fellow welfare Commissioners are quite excited by the prospect that perhaps welfare reform has become such a keen topic again, and it maybe we can get some help from people like you to help us figure out how to get out. This morass that we have found ourselves in with something like 35 million people mainly children living below the poverty line my experience in New York was that it was actually quite ironic which you can't tell from my resume when I was the Deputy Commissioner of the Addiction Services Agency and I had the responsibility for putting ex-drug addicts to work one of the things that I and the fellow I was working for Gordon Chase to whom this black-and-white booklet is impart dedicated did was we went around on behalf of Mayor Lindsay and visited with the heads of all the major corporations in New York not all of them. I think was the top 10 and got out of them a commitment to hire ex-drug addicts because what we said was we were doing a good job in government making these people drug-free but what we found was unless they had a job. They went right back on the drugs after we got through with them. We got commitments for large numbers of jobs out of all the major corporations in New York including Citibank where the president of Citibank with all of his staff sitting in front of him made a commitment to my boss who is the administrator of health services for the City of New York that Citibank would hire 1,000 ex-drug addicts all of his Personnel people in the room fell off their chairs on the floor. Completely by coincidence at the end of the Lindsay Administration. I got hired by Citibank had a choice of processing their canceled checks managing at operation or managing an operation of hiring all the tellers and secretaries and professional people that the bank hired and I decided while I wanted to learn about management the private sector since I come out of government that managing people that process would be more interesting to me than managing process of canceled check. So I chose the one of being manager of all employment operations and my new boss said, oh by the way without any idea of what had happened before you get to implement the president's Pet Project, right? And it felt even with my background my desire to make it work. I couldn't make it happen. And I think the main reason I couldn't make it happen in the same reason when we went to put unemployed or disadvantaged youth to work in a city of Boston is unless you're back up and invest the resources that you've got to and you in the private sector understand. It's a lot better than less than You can't make it work unless you give the people whether they're ex-addicts or or unemployed or drop out youth or in the case of the welfare system mainly single women with Children what they need to become self-sufficient. They're not going to make and what we have finally figured out with the welfare system is what it takes at least to help those people who are currently on the welfare system get out of the poverty that they're trapped in what I'd like to do to explain a little more detail is to take you through the series of 10 charts that are attached to this pretty color cover. I won't take you through the black-and-white booklet. I'll let you read that at your leisure, but I think you'll find it a very interesting description of who is on Welfare today and the statistics in Massachusetts are by the way true nationally just very briefly two out of three people who are on welfare or children we tend to forget that Going to be white not minority. They happened to be young the average age of that adult at least that mother who's on welfare is 30 years. She has not moved to Massachusetts or for that matter any other state to go on welfare in Massachusetts. She's lived in Massachusetts for 10 years, which is the average length of any Resident of the state and probably most importantly in no state in this country including Massachusetts, including Minnesota that we give that family enough to live on and no state in this country to do they get enough in cash even get up to the federal poverty level. I think that kind of sets the stage a little bit this pretty color cover is not just to attract your attention, but this is actually a replica of a large poster that now hangs in every single one of the 63 local welfare offices in Massachusetts and everywhere else when we think a young mother with children on welfare might be and the reason we did it was to And completely reverse the whole psychology that we had built up in the welfare system of if you've walked into a local welfare office, you would see it for yourself overwhelmed with with forms a thousand and one instructions all kinds of rules and regulations to follow but we wanted to have stand out clearly and obviously a pretty color poster does in a drab welfare office is the notion of that when you're ready willing and able we'd like to help you get a job because that's the best route out of poverty that we've got in this country and it's worked for thousands of people and it can work for you as well. And why don't you give it a try it's free and you got nothing to lose. The first page is a simply a summary of what I'm going to describe to you if you turn to chart1 let me begin with with what the goals of the program are. We designed this program a little bit over three years ago. Tomorrow is actually the third year anniversary of ET and I met I said before that previous efforts that I and people that I've been working with to try and make programs like this work work of fail Governor Dukakis in his first term as Governor. Try to work for a program in 1982 Ed King, who was then Governor Massachusetts try to work for a program. They both failed. We didn't think this was going to work. We thought perhaps we would put the right ingredients together. But what we tried to do here was to set up what we thought were ambitious goals that again we weren't sure if they were going to work, but we wanted to be very very clear to the bureaucracy to the staff to the welfare department who we wanted to take and completely reverse direction to say to that department that your number one job is not just getting someone onto welfare determining their benefits in an error-free way getting people with their legally entitled to but we want your top priority to be when that person is ready willing and able to help her get a job and we thought it was terribly important and something that obviously I picked up in my private sector experience to be clear about what our goals were. So we set out three very clear logical goals, which are listed here. I'm very proud to be able to tell you that three years into the program that we are more than ahead of ourselves and meeting these goals to date we've placed over 30,000 welfare recipients or applicants into full or part-time jobs. Chart to is the guts of the program how it was designed a little bit over three years ago and how it's basically been running to date with some minor modifications and I'll spend more time on this chart that I will on the others just to give you a real in detail sense of how I think you have to design when these programs and how it has to work. The ET program is part of What's called the federal work incentive program known by its acronym of win. The wind program was set up in 1967 and in a 1981 the Congress in some legislation that they passed allow the states to change the nature of the wind program to take the dollars that the federal government was making available to help people get off of welfare and two jobs and to give it to welfare departments to use figuring it welfare departments had the most incentive to help people get off of welfare rather than the way the money was being spent before it's a problem because by and large the American public and the Congress and particular thinks that win is a failure and the probably right from 1967. 1981 probably didn't work terribly well, but since 1981 with these changes that the Congress allowed us to make under what's called a win demonstration project those States like Massachusetts that have tried it a different way have basically found that models like this work. We still have one major problem. As far as I'm concerned this box that says registration by law by federal law anyone in this country who's on public assistance must register for the win program in their state unless they are exempt real key to the whole story women with children under the age of 6 are exempt by federal law from having to register for the win program. I view registration is nothing more than filling out another one of our silly forms and my workers already have to fill out by my count or have to choose from among 250 separate forms to fill out the determine someone's benefits on public assistance. So this one gets lost in the noise level and again particularly those of you in the private sector know you can't run a business. Way it's crazy. But we do it because by federal law we have to do it. What's more important is the second box that says appraisal or employment plan. What we did in Massachusetts three years ago is we took about a hundred of our workers and I've got 5,000 workers who work from in the welfare department. We took a hundred relatively small number and train them and motivated them to develop employment plans and the work with any of our clients who are on welfare, whether they were registered for this program are not was immaterial anyone who wanted to get off of welfare. We set them down with the worker to develop a plan for getting off of welfare. If at that point in time what that woman needed was something as obvious as daycare, so I want to watch your kids so she could go out and get a job. We provided it. We can provide it ourselves. What we did was and this is the way we've been running the entire program. We arranged for her to get those services from the proper agency either a government agency or a non-profit agency that was already in the business of doing it, but simply wasn't delivering those services to women. Welfare in Massachusetts, they care. For example, what we do is we give a woman who needs day care for her kids a voucher. She goes over to another government agency that helps her choose a daycare center of her choice. We pay the bill the other government agency in Massachusetts called the Department of Social Services manages the daycare to make sure she gets quality daycare for her kids because obviously if she's worried about her kids while she's at work. It's not going to work out second thing we found that was a simple but very fundamental roadblock to women on welfare going off and getting a job with Transportation. They are literally pour that means they don't have a car they often don't have enough money to even take public transportation to go look for a job or to go through an education or training program. So we will reimburse people up to $5 a day and will make exceptions if people live out in the rural areas of the state where it costs more to go in to look for a job will reimburse for transportation help people get a job simple. The goal of that employment plan is to get people to choose one of the four boxes shown in the middle. Hence the word choices in the title of the program starting with the Box on the bottom. Every state has one of these but it's a big secret Most states at least in terms of women who are on welfare. Every state is something called a wagner-peyser agency there 50 years old in Massachusetts is called the division of Employment Security and some states that the labor department but every state has an operation set up which hands out unemployment checks and makes jobs available from the private sector, but they usually make jobs available to white males because that's the business they've been in for 50 years and what we had to do in Massachusetts as we had to turn it around each year the division of Employment Security in Massachusetts gets a hundred and twenty-five thousand job orders from the private sector mostly from small companies who use the division of Employment Security to augment their own small Personnel operations or two. Perhaps save money from having to It's a lot in newspapers, but the job orders are there and traditionally Massachusetts only about half of those job orders were filled by Des. What we said was we wanted some of those jobs not a lot because we wanted to avoid the displacement Factor as it's called. We didn't want anyone criticizing us that we were putting welfare mothers at the head of the line in front of other important groups in our society who want a shot at jobs. We just wanted some of those jobs the way that we did. This was an in two ways. First of all, when asked who should get the credit for et, despite the glowing introduction of me the governor in Massachusetts, governor Dukakis is the first to say, he should get the credit for UT for three basic reasons one. He appointed me to run the welfare department. It's better to he appointed my wife to run the division of Employment Security and three. He appointed the judge who married us. Now this put at risk our marriage but it is worked quite well over the past three years, but it was very significant because what the governor wanted to make sure is that literally from the top down that two of the state's largest bureaucracies work together because what he had found in his first term as Governor from 74 to 78 was that there was no connection between people who are on welfare and particularly those mothers and those private sector jobs at the division of Employment Security had they just didn't meet when we first started our jobs my wife and I would go out and visited a local offices across the state and I would ask the head of my local welfare office if he or she could tell me where the local DS office was and who the head of it was the answer invariably was they didn't know the answer to either of those questions and she found the same thing. I can assure you now you can walk into any welfare office or any DS office in Massachusetts and they know well who their counterpart is the working very closely together and in part because Not just we have told them in a top-down management way that you shall do this and the governor wants you to do it, but we've bought them into it. They now feel very good about this program. It's working. They like it the workers like it. We still have a lot of Roblox to get over but people have basically bought into the second way that we bought or the second way that we made this work which is more relevant for the other agencies and how other states might do it because not everyone is going to have a husband and wife team to run a program like this is that The welfare department negotiated with the division of Employment Security what is called in a private sector but as usually foreign to government a performance-based contract those of you who deal with government know that we don't do that government. What we do in government is if we're going to give you money, especially if it's a contract not a grant we sit down and we want to know how much you're going to pay in a way of salaries how much you're going to pay in a way of overhead how much their space costs and we nickel and dime. Well, what I learned in the private sector is that's not a good way of doing business in the private sector the best way of doing business this you buy a product and if the product meets your quality standard you pay for the product on a unit basis. So what I said was let's do performance-based contracts with all these nonprofit organizations and government agencies in Massachusetts that have got jobs training or educational resources that we want for our clients. We've got the money remember through that Federal wind program. And what we want to do is to contract with these She's deliver services to welfare recipients in Massachusetts. And what we Define as the bottom line is the Box shown on the right an unsubsidized job. Not a job in government, like the old see today's of public service employment but a job that's unsubsidized mainly the private sector, but if someone went to work in government, that's fine too, but can't be subsidized got to be a job like anyone else the way we've worked this out as it. We pay the division of Employment Security. We're now up to we pay them $1,600 for every welfare recipient that they Place into a job and there are two quality measures that go along with it. So it doesn't become just a numbers game for every welfare recipient. They place the new a job with the job paying at least five dollars an hour or ten thousand dollars a year and you'll see from a subsequent chart what's important about that and secondly that the person has been in the job for 30 days and more so it isn't just a quick hit they collect the money. Yes and nothing happens. We've done the same thing with supported work supported work the next box up the line. I put in parentheses here as on-the-job training because to me that's the best explanation of it supported work was something that I learned about in the Lindsay Administration in the late 60s and early 70s and outfit called the Vera Institute of Justice working with the Manpower demonstration research Corporation set up supported work programs to help in the case of New York City ex-offenders and ex-addicts get jobs during the Carter Administration the federal government took some money spread the concept around to about 15 or so other states in Massachusetts. The supported work program was set up specifically to take welfare mothers and put them to work again an ocean being to take if you will the hardcore unemployed or the people we think of as the hardcore unemployed in our society and the try getting them to work the way supported work operates is it's very labor-intensive. There's a lot of supervision a lot of hand-holding. I View it as being primarily for those welfare recipients have been on the welfare rolls for a long time who perhaps don't know how to even go off to look for a job have no resume are terrified of walking in at that door in a personnel office in filling out a job application because it's very labor-intensive because it involves a lot of hands and supervision by our contractors and we have a network of about a dozen contractors across the state who perform this for us, we pay an average about $4,500 per person placed into an unsubsidized job through the support of work program. It's our most expensive component. So between these two choices that yes runs at $1,600 per placement supported work up to $4,500 per placement. We now use the program to Target on those people who are the most difficult to reach and get off the welfare rolls. It's something we've learned over the past three years. Our supported were contractors can now only take those people have been on the welfare rolls two years or longer. Or who live in public housing we can make exceptions but by and large that's we try and Target the program to the third box and our biggest need in this is true. Nationwide is Education and Training 55% of those adults on welfare and Massachusetts. I'm sure you'll not be surprised to learn do not have a high school education again. What I at least learned the hard way is unless you're back up and finish the education and provide training to those people. They're not going to be able to survive in a job. They're certainly not going to be able to survive in a job paying enough for them to support their families. So we thought again using a business concept that was worthwhile to spend some money up front the save some money in the long run and what we do is we provide a substantial amount of Education or training for those people who are on welfare in Massachusetts and it's our biggest neat. We just don't have enough resources even with the substantial amount of State monies that are augmenting our federal Monies to provide the education or training we need I should add what's not on this chart, which is something that goes by the acronym of see WEP which stands for Community work experience program that is traditional workfare where Public Assistance recipients work off their welfare check by doing public service work. We don't do that Massachusetts. It purposely unconsciously was not part of the design of the ET program. In other words. The entire ET program is focused on placing someone into an unsubsidized job chart 3. And as I said before I'll go through the rest of these charts a little bit quicker, but I didn't want you to see the details of the program in short to chart three tries to give you some data on what choices people have made from chart to and as you can see close to 40% have gone directly into a job. I think that's an interesting figure since 45 percent of our clients do have a high school education. It tells me we're probably in the right ballpark with the percentage of people going directly into a job, but you got to be very careful. As if that's all you do and there are some in this country who would have us do only that and workfare place people directly into a job if that's all you do. You're not going to be able to really help the bulk of the people who are on welfare in this country what people need more of is what shown with these other choices education or training chart for shows what's happened over time to the ET program. As I said, we're now up to over 30,000 welfare recipients or applicants because we've also opened this up so that when someone walks in the door and if she is ready willing and able to go to work without going on welfare glad to place her into a job and save us the time and expense and her the trouble of going on public assistance. The other thing that's interesting is that these are full or part-time jobs. That's another choice that people get about two thirds of the jobs are full-time. But if someone doesn't want to go to work full-time yet. She wants to work part-time find we hope that leads to a full-time job later on chart five tries to answer the question of okay. Well what kinds of jobs these people get because we all know. That all I can hold down or service or clerical type jobs Well, yeah, if you look at the percentages on the left as you'll see a little bit over half the jobs are service or clerical jobs, but two points about it one almost half art and to look at the wages. The wages are substantially above the minimum wage. We've had the benefit of an excellent economy. As I think you well know in Massachusetts and I maintain that the single most important thing the booming economy has done in Massachusetts as to help us get wages like this for people who are on public assistance, but what's really happened is that those women know what it costs to feed their kids. They're the ones I'm telling you who run out of food before the end of the month who have to use the meager amounts of money that we give them in terms of cash on afdc the supplement their food stamps because we don't give them enough in the way of food stamps to feed their families and when you give them a shot at holding down a job they Turn out to be very well motivated and they know what it takes to survive and I've seen it happen where they'll go out and they won't take a job unless it pays enough money where they can provide for their families. Chart 6 remember I said back in Chart 2 that by federal law women of children under the age of 6 are exempt. This tells me a couple of things one. It tells me we must be doing something right with ET if we're getting that amount of participation with women who have children under the age of six. It also tells me that we're missing a very big segment of the American population was on welfare who would like to go to work chart 7 and I think this probably explains the guts or the main reason as to why ET has worked and which terribly important about designing programs like this, which jolinar left is the average amount of money. We pay out Massachusetts where we Rank by the way number 8 in the country in terms of the size of our welfare benefits that we pay out. This isn't everything that people get on public assistance. But in terms of what people get in cash that mother with two kids gets fifty three hundred dollars a year now, I don't know about you, but I couldn't live on fifty three hundred dollars a year much less. Raise two kids by in addition to this amount of money the average family, Massachusetts who collects this amount of money is eligible for all of $1,600 a year in food stamps. You combine it you're talking less than seven thousand dollars a year the federal poverty level the National Standard of how much money it takes to live on for an average family of three in this country is ninety one hundred dollars a year and we're giving out Massachusetts seven thousand dollars a year by contrast as you can see the jobs that people are getting for the ET program. The starting salaries are now over $12,000 a year obviously not a substantial amount of money, but more than twice what they can get on welfare and slightly above the poverty level. So what's happened in Massachusetts is the word has spread among our clients that there's a root out of poverty that there's a program. You can try that's free that doesn't penalize you if you fail that really tries to help you if you want to give it a shot and I think largely as a result of that we've seen More people come forward want to participate in program chart eight shows what effect its had on the case law the afdc caseload Massachusetts. We started the program three years ago. There were something like eighty eight thousand five hundred families on afdc in Massachusetts, as you can see the welfare rolls have gone down since then and we really believe that if it weren't for ETR welfare case load would be up close to a hundred thousand cases. I should tell you that the twelve largest welfare states in this country have experienced over the past three years despite the Improvement nationally in the economy and increase in their case loads of about on average three or four percent the trend is up not down. Chart 9 is what the public and Massachusetts the taxpayers and in particular the legislature like best and that's the dollars and cents argue on the left is what it costs us to maintain someone on public assistance in Massachusetts the $5,300 that I mentioned before plus the sixteen hundred dollars in food stamps plus while the family doesn't get the money. We pay it to Physicians and hospitals. It costs us on average When You Subtract out all the nursing home care all the states pay for about 900 dollars a year in health care costs. So we'll spend about seven 800 dollars to maintain someone on welfare by contrast. Even when you add in all that Day Care Transportation training education on average. It's costing us less than $4,000 to place sewn into a job. In other words for every dollar that we spend on ET we're saving $2 and Welfare benefits. This is what is called cost effective. The last chart is the governor's favorite chart, which is that we estimate that this calendar year that after deducting the cost of ETA that we will generate in the way of savings from reduced welfare benefits or from taxes since these people have now become taxpayers themselves over a hundred million dollars net after deducting all the costs part of the ironic thing in this is that the federal government gets two thirds of the savings or revenue and yet continues to try and pull out of the business of helping the states provide Monies to get women off the welfare rolls through programs like this. We will spend this year in Massachusetts about 50 million dollars on ET when we started the program three years ago. We had about ten million dollars in federal funds that's now down to about six and stands a very good chance of going to 0 because the Congress is considering implementing what the Office of Management Budget has proposed in Washington, which is to eliminate the federal wind program. We put up 40 million dollars of our own State money and yet the federal government gets two thirds of the savings. I would say that's unfair I would also ask you for your help in that. I really hope that one of the products of this seminar is after you've given some careful consideration to self-sufficiency. And is it possible that you're really agree with me and my fellow welfare Commissioners that it is possible. At least if you define it as helping people to help themselves and at we as a nation can afford and should run programs like this, we my fellow welfare Commissioners have come up with a proposal that we are going to try and unveil officially in November that essentially calls for a three-pronged attack on poverty in this country as our proposal for welfare reform jobs through programs like this child support because It's a very key feature of why these people went on welfare to begin with and self-sufficiency. If you will in terms of giving people enough to live on while they are trapped in poverty again. I hope that what you end up concluding after your deliberations is that we can do it and we should do it in this country ought to spend the resources. That's the ET program and be glad to take questions. (00:29:34) Yeah, the (00:29:40) question for those of you may not have heard it is what about job creation. How does government play a role in that? Let me phrase a question a little bit differently and answer that because I know someone also asked me if slightly different angle. If I don't answer it this way, isn't it just the booming economy, Massachusetts that's gotten welfare case law down and made et work I submit to you know, I really believe that yeah government's got to do stuff on job creation and economic development is important, but I think that's where the private sector comes in and I think The best in government can do is get out of the private sectors way or at least help stimulate the growth of jobs, but I think what's more important and we're government should play a role is in funding and operating and encouraging programs like this and people who work for government to help those people who are dependent upon government for their survival in this case welfare recipients. But but one of the things the governor Dukakis is now doing is taking this program and trying to make it work for other groups in our society who are also dependent upon government some of the other kinds of people that we fail before with on ex-offenders for example, but we think we can take the same approach. I meant what I said before about I really think that the key thing that the economy has done in Massachusetts where you should know that the unemployment rate is now down to about 4% It's the lowest in the country. I think the key thing that that economy has done is to force that wage rate up that it's not just been those women out there saying no, I won't take a minimum wage job, but the private sector has recognized that they gotta pay substantially more than the minimum wage in order to really attract some good people. I think that's the key thing. The economy is done and by no means would I minimize it would we have placed 30,000 people to date through ET if the economy hadn't been booming to Massachusetts. No, but we would apply some them and I'd say we'd be close to our goal not 30,000. I don't know maybe 20,000 and the reason I say this is for the basic reason of as explained before every state has got one of these organizations and government. Dese, Massachusetts that gets these job orders from the private sector the trick was to get them focused on. Women on welfare, every state gets federal funds from the job training Partnership Act, which I'm sure some of you are involved with with your service delivery areas and Private Industry councils to train people but very few states have really made taking women on welfare welfare recipients and made it a top priority, but it can be done government can address the resources to give women on welfare jobs or training that they need to get jobs before I even begin to talk about vocational education or other kinds of educational resources are out there. But the the the ability is there if Government wants to to focus in on these people and say their high priority, In his first Administration as Governor from 1974 to 1978 Governor Dukakis experienced a very bad element and it was in part responsible for his 1978 loss in the Democratic primary Massachusetts to the man who then succeeded him as governor and his first term as Governor the welfare department of Massachusetts accounted for one third of the entire state budget today we account for less than a quarter of the state budget in his first term as Governor from 1974 to 1978. The unemployment rate in Massachusetts dropped in half and went from 12% in 1974 the 6% when Governor Dukakis left office the first time in 1978 yet at that very same time. The unemployment rate dropped than half. The welfare rolls went up by 15% I met someone this morning who was a student of Mike Dukakis has while he went and taught for three years at X in Exile at the Kennedy School of government at Harvard. And one of the things he did besides teaching was to think a lot about what he did wrong first time as Governor both politically in terms of how he lost that primary fight but also substantively and I've spent many hours with that while he was out of government and I was off working in the private sector thinking through if he got back in the government how he could set up a program like this that might avoid some of the problems that happened before how if he got back in the government and if the economy improved he would have a program in place that would take advantage of those jobs being created and give in particular women on welfare a shot at those jobs again knowing that it hadn't worked in Massachusetts before no one had made it work that we could tell but could we put a program together so that we could be be there if the economy improved if we got back in office in 1983 when we started this program the unemployment rate Massachusetts was over seven percent higher than the national average. We had no idea that the economy was going to improve in Massachusetts yet. The governor went ahead and cut the orders to set this program up. And the reason I tell it to you in some detail is the doubters will tell you that it can only work where the economy is improving. Well, you know, we took the chance the economy happened to improve in the program work, but I really maintain that having a good economy need not be the excuse, Illinois a obviously a Republican state my counterpart there Greg Kohler and Governor Thompson have set up a program modeled after ET. It's now a win demonstration program. They have a high unemployment rate in Illinois, but both Greg Kohler and Governor Thompson will say that they're not waiting for the economy to turn around. And again, the basic reason is that there are jobs out there even in times of high unemployment and what we're trying to do with programs like this is to People on welfare a shot at those jobs last thing and in answer to this question in Massachusetts there about three million jobs, even if you figure turnover is 810 percent you're talking about a quarter of a million job openings a year. We've only got 85 thousand families on welfare in Massachusetts. I mean, there's no reason that we can't pick off the same things true in every state some of those jobs for these people. So the answer your question. Yeah job creation is important, but you can still do a program like this back in the room. Great question question being what about minority males and other groups in our society who we ought to be worrying about how we help them become self-sufficient. One of the toughest things that government does is to force itself to say what its priorities are one of the things that Mike Dukakis taught about at the Kennedy School. If you look at chart one is there's an age-old rule among successful politicians. If you don't follow the rule you're not successful which is never put a number and a date in the same sentence. Reason is you can be held accountable and your opponent will hold you accountable. If you fail same thing goes with setting priorities and government terribly terribly difficult to do but what Mike Dukakis thought about is again when he was out of office. What were my key mistakes when I was governor the first time and a key mistake was that I didn't control and manage the welfare department. It made it a very big problem because it was very visible in Massachusetts and because costs went up help defeat him. Those were parts of his reasons that I was willing to put welfare mothers ahead of some of the other groups in our society who I think can legitimately argue that they belong in that line as well to get some help to Dollars and cents argument and you can see it best on that chart number 9 because what we could do with the public and the legislature is very clearly show what the costs and benefits were a little more difficult to do with people who are not on public assistance, but it can still be done you can certainly show What the costs are if you don't help other people in our society who need training or education get a job. What we're trying to do in Massachusetts one step at a time. We've now made this program work. Basically the public is very supportive of it Massachusetts. The legislators responded with giving us the money. We need by and large to run the program. And as I said before one of the things the governor is now doing is using this as a springboard to help other people. He's got a theme that equals opportunity for all he says my parents came over here as immigrants from Greece, they pull themselves up by their bootstraps. We've now proven or destroyed the myth that welfare recipients cannot work. And now I'm going to do it with other groups in our society. So we're now starting to focus on in particular minority males and other groups that Society I think to easily passes over that are terribly important for us to focus on but at least my us there to your question is one step at a time these things do take time. These programs didn't work for many years. We've now figured out how to make them work on it. We've got to keep going. Yes. Interesting things about that comment about that Massachusetts became a good place to invest is we've started to run into the problem with our business community of should I expand in Massachusetts? Because the unemployment rate is so low you may have read stories here that for the past two Christmases stores in one part of the state and Framingham the central part of the state of had to bus in workers from over an hour away because it couldn't get people to take their part-time jobs. Well, you know, you certainly don't want business to start going elsewhere because they're not sure if they can get an adequate supply of labor. One of the things we've done with this program is to say the business look these people turn out to be terribly well motivated, unfortunately because they don't have a choice economically, but also we're investing a lot of money in finishing your Education and Training and we've now got businessman who will stand up as the governor goes around the state and holds press conference at a local business in this program and say these ET participants turn out to be very good employee. So what we able to show business is we've got a good labor source. It also answers the question that was asked before don't be fooled on employment rates. They are relative in nature. Other than that in absolute terms. They're meaningless. If you are on welfare in this country, you are basically not counted among the ranks of the unemployed. If you are minority male who is so discouraged that you're not looking for work, you're not counted among the ranks of the unemployed when the US Census Bureau calls up each month to determine the sample to take the sample of who's unemployed. If you're on welfare, you're presumed not to be looking for work. And therefore you're not even included. So even with a low unemployment rate in Massachusetts are in this country. They're still literally thousands of people out there who are not at work and we still need to do more on economic development and jobs. Yeah. Sure. I heard the first part of the question right in here that the last comments on the correct me if I've got it wrong, but the question being if two-thirds of the revenue is going back to the federal government as a federal. What is the federal government doing to export this program in other states? Basically nothing and it's quite ironic as near as I can tell what happened was when David Stockman was a head of the Office of Management and budget the federal government became totally preoccupied with reducing the deficit. And for those of you who have read his book or the excerpts of Newsweek. They used every trick in the book and quite clearly what the administration in Washington believes in terms of their parties is defense and foreign aid before domestic programs. You may be interested to know that this year we have now have the distinction of we have now spend as of this year more money in foreign aid. With federal dollars that we spend nationally on the afdc program. I mean they've clearly their priorities are not with domestic programs in the effort to reduce domestic spending one of the programs that the Office of Management and budget has proposed now for five years in a row in this Administration to eliminate is this Federal wind program. Luckily for the past four years. The Congress has believed these numbers and we're not the only state running it there other states will be able to say to their senators and Congress then the same thing in the Congress has overridden the recommendations of the Office of Management and budget and has kept the money in the budget this year for the fifth year were quite worried that the federal government might totally eliminate the wind program because of Congress is under such enormous pressure to reduce that deficit. I happen to be optimistic enough to believe that if Ronald Reagan really knew the details of this program and other others like in other states that he would not personally be in favor of eliminating. I think we're caught up in the budget Machinery that is just wildly looking around for stuff to eliminate. The reason I say it's ironic is it's not just that the federal government saves money and at this program and others like it actually help reduce the federal deficit but that what one of the things we're all waiting for his part of welfare reform is the welfare reform study that the president announced in February or Commission in February that is being conducted in Washington the head of the domestic policy Council Chuck Hobbs is directing one part of the study. He has come to Massachusetts. He's met with me in the governor to learn about ET and it's clear from his thinking at least that he's on the right track with jobs and child support being keys to helping solve poverty in this country, but Problem is that that study will not come out until after the win program may be eliminated. So at the present time the federal government is not helping but I do hope once the welfare reform proposal comes out that they too will get on the bandwagon of we think we now know how to fix the problem. We got to put some resources into it to do it. And I think we'll have some good success. Yes. The question is how do you move money around in government particular get it to community-based organizations get it out of government and I would add to that. I put in a general framework of how do you make institutional change because that to me I think is one of the terribly important challenges and government in the private sector you tend to be in your jobs a lot longer than we are in our jobs and government and by and large one of the things you run into and government from your traditional workers is I was here when you got here and I'll be there when you're gone, you know, leave me alone. You also quickly get reinforced at jobs at my level in particular Don't Rock the Boat Rock the Boat you get in trouble as an example just to jump ahead to a question has not been asked for those of you who have done all of your reading you'll notice on the almost the last page of one of your handouts is a From last week's issue of the new Republic Mickey cows wrote a series of articles on work and Welfare in the new Republic a few weeks ago and they got so much interest that there was in a symposium of articles in response to what Mickey cows had written making houses a very conservative reporter from Los Angeles who does not believe that we ought to be doing programs like this and in his rebuttal he a tributes a quote to me. There are two things wrong with the quote one. It contains a four-letter word, which my mother said never to use certainly not in public and definitely not in front of a member of the press since you know that they will print it to make good copy and even more importantly it's got a quote in are essentially saying and I don't believe the program's I don't believe that people in well for can work. Obviously believe just the opposite but my point being that what tends to happen to you in government is if you rock the boat people tend to come after you and not necessary maliciously, but you know, you make a good Target and you can write an interesting article and attribute something to someone and sells a good newspapers. So how do you know make change happen in government had to move Dollars around in part as you suggest with new dollars because it's always easier to do it by not taking money away from people and what we what we've been able to do with ETS to go to our legislature in particular and say look here's a cost-effective program in each year. They've given us more money because they can see the results with the decline in the caseload. They can see the savings reduction to welfare departments expenditures, at least on a per capita basis or for what we certainly what are spent and with those new dollars. It's clearly you can go off and do things with with existing dollars. It's a little bit more difficult and what we The existing dollars was rather than try and reallocate it was to take this performance Contracting approach when we started ET. We had a budget of 23 million dollars. And what I basically did was not try to get into the fight of reallocating it between or among Community Based agencies and government agencies. I simply said if you want to keep getting that money, here's what I want return. I don't want this nonsense anymore of what you've been doing. I want performance. I want someone trained placed into a job that they can survive at five dollars an hour more and it can stay in 30 days or more in the way we did that is we put out especially with the new money our request for proposal which is the way you do Contracting and government so that everyone has a shot or a chance at getting those jobs or getting them money and we basically said submit us proposals whether you are community-based organization or a state agency or local or County agency. Feel free to bid on this and we set up evaluation criteria and it's basically Worked in terms of allocating the dollars but what's been more important is holding the agencies accountable because you know what happens in government you give them money and you know, then what what we've been able to do is to measure the performance on this common bottom line measure of numbers of people placed in the jobs and very very importantly the wage rate. And then once a quarter, I hold a big meeting where I review all of our major contractors and they come in and they present to me and to 40 other people in the room how they've done for the previous quarter just like the business world does and lo and behold they love it and it's in part because the program's working so they all come in and they compete with one another and it's terrific one agency will get up and report that in the last quarter. They made 300 job placements and break down the demographics of sex and race and age and then report on the wage rate and then the next agency will end up trying to beat them and it's great the notion of competition that The private sector can work in government can work with community-based organizations. It's healthy, they like it and it does work last thing on that we've also and I think this is important in doing one of these kinds of efforts is we've got the governor support in doing this so that whenever we've run into some resistance on the part of the bureaucracy workers Community Based organizations. I've always got the governor to fall back on to be able to say look he ordered that this should be your top priority. He said you should be doing this you want the governor's discretionary funds or his support then jeez. I hope you participate in this and he's followed through by each year giving out Awards personally to each local office in the welfare department in the division of Employment Security and our contractors who have met or exceeded their goals. He gives them an award a little certificate cost about a buck and a handshake. We take their picture. They put it up on their wall and let me tell you especially for people in government or nonprofits where you don't pay bonuses and people don't get really Financial rewards having their picture taken with the governor and someone saying thank you to them is the best reward they can get (00:49:41) Yeah, (00:49:45) the question is what about the excuse that people use that women on welfare or even men on well for people on welfare can't work don't want to work in can't work. Let me answer that in two ways one. Let me confess that I used to believe that and I think most of the American public certainly believes it Barbara birk Tatum who you may know who runs the ET program for me used to work for me. When I work for Kevin White when he was mayor of the city of Boston and Barbara and I ran this program that failed to take disadvantaged youth in Boston and offer them a part-time job there in a school year in full-time during the Summers and instead of staying score or go back to school it fell in the sense of we had a goal of 5,000 kids put the work we never made it was very difficult at the time Jerry Stevens, as you may recall was the Secretary of Human Services in Massachusetts, and I needed some stuff out of him for health care for those kids and he said to Barbara and to me okay, if I give you the healthcare, I want in return you to take your seat of training dollars under the old Ceta program. Train welfare recipients and to put them to work because I got this welfare caseloads. It's going up and the governor's unhappy and you know, so make a match I said no deal because I get measured with the federal dollars that I get to run training programs and job placement programs in Boston by retention rates wage rates. And you know, why would I take these welfare recipients and put them to work when you know, I got other groups out there who I know I can succeed with and I'll lose my money if I do it. So no deal. I'll go by my Healthcare somewhere else. That's part of what I meant by when we got into this program Barber and I in particular was quite skeptical the shoe having been on the other foot and we weren't sure this was going to work but we really wanted to give it a tribe because we thought we had thought through the mistakes we made in the past. Let me ask you to turn in your black and white booklet to page (00:51:59) 20. (00:52:05) This statistic is basically the same in every state despite the Public Myth that welfare recipients do not want to work and cannot work a large number go off and get jobs on their own each month Massachusetts. The number was about about 750 afdc clients got went off and got jobs by themselves each month before ET existed with no help from the state in fact discouragement from the state because it was no daycare no Transportation the point being that one of the things we tend to think of that I hope this book helps you think through about who's on welfare is that they are the permanent underclass that there have been poor for generations and it going to remain poor. Yeah. Unfortunately, the probably are members of our society who are like that but by and large the people in welfare or not 90% of the people go on welfare in Massachusetts, and I'm sure the statistic is true nationally go on welfare because Is the legal reasons of the absent absence of one parent usually the father who is either walked out deserted that family died on them with divorce them. They got no other place to go their life is in crisis. They go to the welfare department. Let me tell you you do that as a last resort, you will go to family and friends before you walk in and go through the process of applying for welfare to say it is dehumanizing is to I think give it too much credibility. We do everything to look into your life by federal law including have workers who look under your bed in your closet to make sure you're telling us the truth. It's not a lot of fun to go on welfare by and large these people get off as quickly as they can both because it's degrading but also because the economic reality of you don't get enough money to live on what's happened over the past three years, especially you over the past two since we put this booklet out. Is that the number of people who have gotten jobs in, Massachusetts. Not through ET his going down a little bit. It's going down from about 750 people a month were getting jobs by themselves down about six hundred and I'd like to think that what we're doing is we're helping people may have gotten a job at themselves get a better salary put them through a training program before they rush out and go to work in the number of people who are getting job sweetie has gone up from 750 month to about a thousand but same thing exists in every state there are hundreds of people each month leave the welfare Rolls by themselves and go to work and if that doesn't disprove the myth that they can't work nothing us.