# Presentation: 100764

## From Getting By to Getting Ahead:Navigating Career Advancement for Low-Wage Workers Work Advancement and Support Center (WASC) DemonstrationACF’s Tenth Annual Welfare Research and Evaluation ConferenceJune 5, 2007Betsy L. Tessler and David SeithWASC is funded by the U.S. Departments of Labor, Agriculture, and Health and Human Services, and the Ford, Rockefeller, Annie E. Casey, and Joyce Foundations

**From Getting By to Getting Ahead:****Navigating Career Advancement ****for Low-Wage Workers** **Work Advancement and Support Center (WASC) Demonstration****ACF’s Tenth Annual Welfare Research and Evaluation Conference****June 5, 2007****Betsy L. Tessler and David Seith****WASC is funded by the U.S. Departments of Labor, Agriculture, and Health and Human Services, and the Ford, Rockefeller, Annie E. Casey, and Joyce Foundations**

## Brief overview of the Work Advancement and Support Center (WASC) demonstration

- Problem:
- Many low-wage workers not earning enough or advancing
- Not taking up the work supports for which they are eligible
- New approach to helping low-wage workers take strategic steps to advance.
- Increase earnings in the long term:
- increase wages or hours
- acquire employer-provided benefits
- Increase and stabilize income in the short term:
- make the most of available work supports

**Notes:**
Low-wage workforce is getting larger
Wage rates for less-skilled workers have fallen in real terms since the mid-1970s 
1996 to 2001: Expanding economy and changes in workforce and welfare policies brought record numbers of less-skilled workers, including welfare recipients, into the workforce. 
Subsequent recession resulted in millions of workers being displaced, or losing their jobs and being reemployed, but often in jobs that paid substantially less than previous earnings
Many low-wage workers secure jobs with little opportunity for wage growth and advancement. 

Advancing can also mean obtaining better work hours.

## Brief overview of WASC (cont’d)

- Operating in four sites
- Dayton, Ohio
- San Diego, California
- Bridgeport, Connecticut
- Fort Worth, Texas
- Institutional home:  WIA One-Stops, but requiring
- close collaboration between workforce and welfare agencies
- integration of staff and services
- Two core, integrated components:
- Employment retention and advancement services
- Eased access to financial work supports

- “Learning sites”

**Notes:**
Institutional home:  WIA One-Stops, except FW, which is entirely employer-based.

## The catch . . .

- Best path toward advancement can be complicated
- As earnings increase, work supports decrease or disappear altogether
- Must know the consequences of each advancement step before taking it to ensure a positive outcome
- Must combine work, training, and work supports in an optimal way

## The WASC model

- Integrated teams of workforce and work supports eligibility professionals
- Offer intensive career and advancement coaching for low-wage workers
- Increase access to and take up of work supports
- Food stamps
- Public health insurance
- Child care subsidies
- Earned Income Tax Credit (EITC)
- Child Tax Credit (CTC)

## Welfare as a work support

- WASC focuses on working people who are not current recipients of TANF.
- Nevertheless, TANF can be an important work support for some people, especially if they experience job loss.
- As a rule, sites are not promoting the take-up of TANF
- Coordination problems from having more than one “coach” with different approaches
- Distinguishing WASC from a welfare program
- Keeping emphasis on advancement
- Sites have different approaches to TANF
- One refers when there is job loss, one refers when asked

## Advancement tools

- Income Improvement and Advancement Plan (IIAP)
- Helps customers identify advancement goals and motivation
**Advancement Goals**: (check all that apply)
- □ Promotion to _______________________
- □ Earn raise from _____ to _________
- □ Increase in hours from _____to _______
- □ Education & skills training: _______________________
- □ Move into ____________job in _________________career
- □ Be awarded employer benefits: _______________________

**Notes:**
Most important, and not displayed on the form here, is the motivation: What drives you to advance?  To be able to provide for your children.  To need less support from family or friends, etc.

## Advancement tools (cont’d)

- Income Improvement and Advancement Plan (IIAP) (cont’d)
- Helps customers identify income stabilization goals
**	****Income Stabilization Goals**: (check all that apply)
- 	□ Child care and/or transportation assistance
- 	□ Assistance with food costs
- 	□ Health insurance for self and/or family
- 	□ EITC/Child Tax Credit Child and Dependent Care Tax Credit
- 	□ Child support

**Notes:**
One site also offers financial literacy, though this is not a core element of the WASC program.

## Advancement tools (cont’d)

- Work Advancement Calculator
- Quantifies changes in income that would result from specific advancement moves
- Takes into consideration decrease in work supports and increase in taxes

**Notes:**
Modeled off of an existing tool – Oregon Helps benefit screener – with the addition of the advancement functions.

## Work Advancement Calculator

**Notes:**
Here is a preview of the calculator, though we will go through it more thoroughly later.  But you can see that it compares a current job with a potential future job, shows earnings at which the customer will hit certain cliffs, and displays changes in earnings and work supports.

## The WASC evaluation

- WASC sites
- Diverse with regard to their workforce and welfare agency structures, demographics, and labor markets
- Should help test the adaptability and feasibility of the WASC program model in different contexts
- Target population
- Relatively low income
- Limited prior connection with welfare system
- Reemployed dislocated workers
- Research design
- Random assignment; implementation and impact studies

**Notes:**
Relatively low income: Initially had a wage cap of $9 per hour and a total household income cap of 130 percent of the federal poverty guideline (FPG).  However, the two WASC learning sites had difficulty recruiting into the program enough individuals who met those guidelines.  As a result, the designers of the demonstration raised the wage cap to $15 per hour and the household income cap to 200 percent of the FPG – still widely considered to be low-income, especially if working less than part time.

## WASC’s strategies

- Provide strategic assistance to advance
- Advancement coaching
- Increase work supports take-up
- Clarify eligibility
- Reduce stigma
- Ease access and simplify the process
- Successfully combine advancement and work supports
- Coordination of workforce and welfare staff/services
- Work Advancement Calculator

**Notes:**
Add a few notes from federal response slides . . .

## Most low-wage workers have a substantial amount to gain from work supports

## But as they advance, the same supports that make work pay begin to phase out

## For nearly all families, work supports phase in and out with earnings to create 3 “advancement phases”

## Jack Taylor works 40 hrs. per week @ $7 per hour.Diane Taylor is looking for a job.

## If Diane works Saturdays (10 hrs. @ $6/hr.), family earnings go up 14%, but yield a take-home rate of -8%.

## But a 40 hr./wk. job @ $7/hr. would boost earnings by 64%, for a take-home rate of 43%. 

## Operations lessons: WASC Career Coaches can use this understanding to help customers:

- Plan smooth transitions from public to private health insurance and childcare coverage.
- Understand which advancement phase he/she is in and how to make strategic decisions accordingly.
- Phase 1: Take full advantage of the high take-home rates.
- Phase 2: Consider combinations of on the job advancement and training.
- Phase 3: Take full advantage of the high take-home rate.

## WASC coaching “on the ground”

- Help customers identify clear, obtainable short-term and long-term advancement goals and the steps required to achieve them (IIAP)
- Market work supports as a way to increase income in the short term while pursuing longer-term advancement goals
- Simplify the process of applying for and receiving work supports
- Educate customers about the interactions between advancement and work supports and prepare them for the loss of work supports as earnings increase.

## Marketing work supports

**Notes:**
Single parent with one child living in Dayton, Ohio, working 20 hours per week at $9.00 per hour 
Not eligible for Ohio Works First (TANF) 
Eligible for approximately $248 per month in food stamps 
Eligible for more than $2700 per year from the EITC 
Not yet reached the phase-in range for Child Tax Credit 
Monthly child care expenses drop from $150 per month to $76 per month 
Yvonne and her child both eligible for Medicaid

## Marketing work supports (cont’d)

- Taking up the full package of work supports available would increase net monthly income by $518.25, from $532.84 to $1051.09
- More than $6,000 in additional income per year
- Implicit wage is $14.12 per hour

## Customer reactions to work supports information

- “Wow!”
- Most customers are interested in applying for the work supports for which they are eligible
- Most customers are already familiar with food stamps, Medicaid and child care assistance
- Many are familiar with or already receiving the EITC
- Fewer are familiar with the Child Tax Credit at the time they enter the WASC program; even fewer actually claim this credit
- Medicaid is most popular
- Child care assistance is very popular in one site (not other)

## Customer reactions (cont’d)

- EITC – found money
- Hesitations
- Food stamps – most closely associated with negative welfare stigma
- Is application process worthwhile for small benefit amount?
- Take-up varies
- Future research will try to understand who took up which work supports and why

## Work supports access and application process

- Process designed for working people
- Can apply outside of a welfare office
- Quicker access to a staff person who can assist with eligibility screening and application
- One location, one staff person, no lines
- One set of questions for multiple applications (or, in some places, combined applications)
- Flexible hours and locations for meetings
- WIA and Workforce staff are either cross-trained or work closely together under one roof – helps keep focus on advancement

## Coaching towards advancement

**Notes:**
The far right columns, below the “Cliff Alerts” box (which is discussed below), compare Yvonne’s current employment situation, including the mix of earnings and work supports she is now receiving, with the mix of earnings and work supports she would receive if she took the target job in the other department.[1]  Yvonne’s earnings alone would increase by $780.60 per month.  She is no longer eligible for food stamps, but the loss is more than made up for by the gain in earnings; her earnings are now more than five times the amount of her previous food stamp grant.  Her monthly EITC would decrease by $66.80, but this would be more than offset by the $83 gain in the Child Tax Credit.  Her taxes would go up, of course, and her monthly child care expenses would double.  [1]These numbers do not match up exactly with those in chapter 2 because of slightly different assumptions that went into the respective calculations – for example, the scenario above assumes an increase in child care costs with the new job, while the scenario in chapter 2 did not.

## Coaching towards advancement (cont’d)

- After taxes, transportation, child care expenses, and the changes in work support amounts, net monthly income would increase by about $343, or about 44 percent of the earnings gain of $780.60.
- For every *extra *dollar that Yvonne would earn by taking the new job, she would “take home” 44 cents.
- The “take-home rate” is a short-cut to demonstrate the interplay between earnings and work supports

**Notes:**
Coaches can use take-home rate to help customers understand why their take-home income would not be equal to the increase in earnings they would receive by taking a new job with higher pay or increasing their hours.
Yvonne is a good example of a customer who might need strong coaching and encouragement to double her work hours or who might want to work with her coach to identify longer-term advancement moves that will lead to more favorable outcomes further in the future; though she comes out ahead after advancing, as do most people in most situations, she loses 56 cents in work supports for every extra dollar she earns.  By moving from part time to full time at the same wage, Yvonne has to make new child care arrangements for the additional time, and her out-of-pocket child care expenses double.  The Cliff Alerts box indicates that she loses family Medicaid (coverage for herself), though her child remains eligible and will remain so until her wage reaches $12.70 per hour. For Yvonne to advance to full time, her coach would likely need to stress all of the positives that would come with this move: Her net yearly income would increase by $4,000, despite the loss of some of her work supports; by working full time, she might be eligible for employer-provided benefits that she does not currently receive; and by working full time, she could gain more experience and help position herself for another full time job that pays more.  Yvonne’s coach might want to remind her that as she advances out of the eligibility range for some work supports, future advancement moves will be more favorable, because her take-home rate will start to increase again.

## Coaching towards advancement (cont’d)

- Uses for the Work Advancement Calculator
- Demonstrate the value of taking up work supports
- Motivate customers by showing how much a small raise, or a small increase in hours, could increase their incomes
- Show changes customer can expect from taking a specific job offer
- Compare two job scenarios: one job with a higher wage but fewer hours compared to another with a lower wage but more hours
- Show the value of the EITC, and how many hours customer needs to work to receive a certain EITC refund amount
- Help customers overcome fear of losing work supports

## Advancement decisions and behaviors

- Loss of Medicaid for children is biggest fear
- Some customers have chosen not to make moves that would result in the loss of Medicaid for their children
- Most make the move anyway and look for other ways of handling the loss.
- Very few examples of customers cutting back work, or failing to take advantage of an advancement opportunity, because of the receipt of work supports
- Even low take-home rates have not seemed to prevent customers from advancing

**Notes:**
For example, in Dayton, one woman made an advancement move that resulted in the loss of Medicaid for herself (her children were still eligible); at the same time, she enrolled in part-time classes at a local community college through which, as a student, she was able to enroll in a low-cost health insurance plan.  In the meantime, she began to plan for obtaining employer-provided medical insurance, the first step of which was simply to look into which positions at her current employer offered this coverage. 
Customers are realistic about short-term advancement options. Working with their coaches, and with the Calculator, enables them to prepare for the changes in their work supports that they can expect when they make those advancement moves and, perhaps more important, provides a vision for longer-term advancement options, even if short-term options are limited.

## Use of the Work Advancement Calculator

- Varies by site, coach, and background of coach
- Some use mostly for eligibility
- Some use more for advancement
- Changes with changing caseload sizes
- More time to use Calculator when caseloads are smaller
- Some coaches switched to doing calculator in advance of meeting with customer, rather than together with customer
- Different levels of computer comfort influence use
- Some coaches are not comfortable with computers in general and are challenged to use the Calculator

## Conclusions

- The “take-home rate” for a worker who advances – the amount of each additional dollar earned that the person gets to keep – is usually less than 100 percent
- Nevertheless, it nearly always pays to advance, as total income still increases with almost every advancement move
- For nearly all families, this interplay between earnings and work supports creates three distinct “advancement phases”
- First phase: Strong advancement incentive, with take-home rate more than 100 percent
- Second phase: Low take-home rates as work supports phase down

## Conclusions (cont’d)

- Third phase: Take-home rate approaches 100 percent as workers become ineligible for work supports
- WASC was designed to provide intensive career coaching; strategies include:
- Bringing welfare and workforce staff together under one roof
- Using innovative tools, such as the Income Improvement and Advancement Plan and the Work Advancement Calculator
- Implementation varies
- The four WASC sites are in different stages of their program
- WASC staff vary in their use of available tools
- WASC customers vary in their responses to the coaching they receive.