The Great Training Robbery


By Tracie McMillan

Finalist, 2002 Harry Chapin Media Award


City Limits • May 2001

Five years ago, Joseph Cruz enlisted in New York’s welfare army. He spent a year doing clerical work in a city office in exchange for a public assistance check. Then he hit the streets for the Sanitation Department in Coney Island. Cruz donned an orange vest five mornings a week before clearing refuse, shoveling snow and riding the garbage trucks.

Six months ago, Cruz was pulled off the Work Experience Program trucks for a new welfare experience, this time in the shadow of Williamsburg’s elevated subway tracks. Here, at the St. Nicholas Job Center, welfare recipients double-click their way to employment. Aslee Williams, the center’s job specialist, leads a room of welfare recipients in an afternoon class that is supposed to prepare them for employment. “Okay,” she begins, peering over wire-rimmed glasses. “When you go in for a job interview, do you sit there like this?” Williams lolls about in her chair, slouches, dangles her arms, and rolls her eyes upward, garnering a few chuckles. “Or do you cross your legs and sit up straight?”

Help like this has been part of the city’s welfare-to-work strategy for years; when people weren’t at their WEP assignments, they could get help with résumés and interview strategies at one of the city’s local job placement programs. But many, including Cruz, worked long hours at WEP and ended up searching for jobs on their own. “Before, you just went to WEP,” recalls Cruz. “On your off time, you’d find another job on your own.”

Cruz didn’t. Now 57, he’s older than what most employers are looking for and has a history of health problems. When Cruz got sick six years ago, he spent a month in the hospital before finally going on public assistance. With just a high school diploma and few marketable skills, finding a job he can live on is a tall order. “I did everything I was supposed to do,” sighs Cruz. “But I couldn’t secure a job.”

His time at St. Nick’s is supposed to help change all that. Cruz, though, thinks he’s going to need more than good manners to get back to work. “The basic things I can do,” he says, “I can’t compete. I’d have to learn computers.”



He’s hardly unusual. More than six years after the city first required all welfare recipients to work for meager benefits, the people still on the rolls typically don’t have a real job because they simply can’t get one. Some have never held a position before. Others have never been able to keep one because of health problems, substance abuse or domestic violence.

“The people that just needed some push, some job readiness, they’re working now,” explains Aida Martinez, executive director of Williamsburg Works, the work program run by St. Nick’s. The people who are left, says Martinez, need help with much more than their résumés. “These people are very, very hard to place, with a lot of limitations,” Martinez reports. “A lot of them have been on welfare for many years. They have educational barriers, or medical barriers. They can’t find child care.”

The city’s Human Resources Administration, which once insisted that full-time work was the only way to prepare welfare recipients for independence, has come around to agree with Martinez that many people on public assistance need more than a broom and a vest to find long-term employment. Last year, it issued a dozen massive contracts to private organizations and companies to prep welfare recipients for work, on city time–and emphasized training as part of the process. “Slowly but surely, when the government found out that there were customers on a WEP assignment for a year, or two or three years, that’s when they decided, OK, we need to monitor this more,” suspects Martinez. (HRA would not explain why it altered its welfare-to-work programs, or answer any questions for this story.)

Welfare recipients now spend their first weeks at one of four central “assessment centers,” where they fill out job applications, make phone calls and do anything else they can to get a job. Clients who are ready to move to work–about 25 percent of the total–hook up with jobs right at these assessment centers. But it’s at places like St. Nick’s that the hard reality of welfare reform, year five, comes into striking focus. People who don’t get jobs right away are sent on to one of the city’s 11 “employment centers,” where they get help with basic job-search tactics and, if they’re lucky, job training. From there, the 11 city contractors running the employment centers typically refer those who need the most serious help–the homeless, long-term recipients, ex-offenders or people with little education or skills–to one of dozens of community-based employment training and placement organizations, where staff are charged with transforming people who are unemployable into functional players in the economy.

Clients here still spend three days each week in WEP, picking up trash in parks, mopping courtroom floors, tending school lunchrooms. But now, two days at employment centers are a core part of the mix, offering everything from dress-for-success seminars and supervised Help Wanted searches to preliminary training in home health care, computer literacy and other entry-level skills.

Two days of dedicated work preparation are clearly better than none. But the efforts HRA is paying for, report more than a dozen senior staff of organizations providing these services, can’t even begin to address what tens of thousands of New Yorkers like Joseph Cruz need to actually get a job and stay with it. Job-prep centers like St. Nick’s are now getting the toughest of the tough cases–and though training is required in the contract, they’re not paid to train them, or even to provide the social services these clients urgently need, but to get them into jobs as fast as possible. “The pressure with work-first is to place people as quickly as you can and not take into account special needs,” says one nonprofit executive, who, like most of the program administrators and officials interviewed for this article, refused to be named for fear of antagonizing the city agency they depend on for their cash flow.

Staying in those jobs, however, is another story. With the new private job-prep system, contracts that had paid agencies to keep clients in jobs for sustained periods of time have been replaced with ones that give these contractors incentives to find any job at all for their clients, even if that employment ends up lasting just one day. Until last year, agencies were paid about $1,000 when a client was in a job for a month and had to wait until a client was in a job for six months before getting the rest of their payment, anywhere from $1,200 to $2,000. Now, thanks to pressure from contractors, an average of $2,000 comes as soon as a client enters employment. Employment centers are finding jobs for about a third of the welfare recipients who come in. “In the short term, it achieves the goals,” says another job-prep administrator. “But in the long term we’re going to have problems, because there’s no retention.”

Even these minimal efforts don’t come cheap, and they’re only getting more expensive. By mid-March, nearing the end of the contracts’ first full year, about 15,000 men and women had been placed into jobs through the city’s new system–just over half of everyone who has shown up to the programs. By the time the new contracts’ three-year terms are up, the city will have spent up to $400 million.



The new welfare-to-work contracts are humming along now, but their debut was clamorous. Last January, a proposed $104 million deal with the government services corporation Maximus was derailed after City Comptroller Alan Hevesi reported that the company had cut an inside deal with HRA officials.

But in the year following the Maximus meltdown, the other 11 contracts have quietly moved ahead–and with them a massive new welfare infrastructure. In 1998, HRA administered $54 million in contracts for employment services; the Department of Employment, $67 million. There were hundreds of contracts in all. Today, HRA has taken over the entire business, and it’s spending its several hundred million dollars on a relative handful of mammoth contracts.

The new two-tiered system–private assessment centers to sort everyone out, then employment centers for clients who need extra help–keeps the city at arm’s length from the administrative headaches of tracking 93,000 workers-in-training. “We try to see if we can place them right away,” explains Craig Walker, assistant executive director at the Consortium for Worker Education, which runs one of the employment centers. If CWE thinks it can find a trainee a job, the organization holds on to her. “About three-quarters of the people we end up keeping and working with ourselves,” says Walker.

For every welfare recipient they can get in a job, the 11 companies and nonprofits running the assessment and employment centers get cash from HRA–and the longer they keep them employed, the more they get. “It’s better than what was in place before,” reasons William Grinker, a former city welfare commissioner who now heads the Non-Profit Assistance Corporation (NPAC), which also holds a contract with the city. “It puts considerable pressure to achieve performance. It’s not a bad system.”

But the toughest welfare-to-work action takes place outside of those companies, at the dozens of job-placement programs that have signed on as subcontractors to organizations like Grinker’s. (Williamsburg Works is one of NPAC’s subcontractors.) Many of these groups are deeply committed to training the poor and jobless to work; indeed, some were founded to do so.

They can receive up to about $5,000 for each client they place in a job. Yet the subcontractors are also finding that the calculus of work prep doesn’t always add up–not for them, and certainly not for people on welfare. The city pays these organizations only when they’ve gotten people into the labor force and off of the public dole. Forty percent of their compensation comes when a client starts the job, and another 30 percent when they make it to 90 days. Only when a client clears 180 days of solid work can providers claim the final 30 percent.

As a result, getting people working as quickly as possible is not only a goal for clients–it is also vital to these organizations’ survival. “If it’s costing you $100,000 a month [to run the organization], you have to make sure you’re making 50 placements a month to make your bills,” explains one job-placement services provider. “The contract is a placement contract. Training is really a secondary concern.” Low-wage, often tenuous jobs–home health aide, security guard, fast food clerk–become their first choice. Employment that will last, or pays more, call for education and training–and those take precious time these organizations can’t afford under the terms of the contracts.

Providers say the prospect of getting paid that final $1,500–for placing welfare recipients in jobs that last for six months–can’t make up for the money they’ll lose if they consistently hold on to clients long enough to give them meaningful job training. No matter how good the training, too many people will drop out of their jobs before then. “The biggest payment right now is when they get placed,” explains one provider. “It does create a different incentive in terms of the quality of jobs. The incentive is to spend more time getting placements, less time doing retention work.”

The bottom line inevitably comes first, agrees another organization’s executive. “If you’re prudent and fiscally responsible, you’re going to budget on the first two [payments]. The third, it’s a gift if it happens.”

Hitting the mark isn’t easy, and contractors have struggled to make their targets. While systemic data isn’t available on who’s placing how many and for how long, the smallest contractors–NPAC and CWE–say they hit their annual goals, around 450 each. NPAC boasts that 77 percent of those who find jobs stay in them for at least 90 days. It’s the larger contractors, who’ve taken on agreements worth tens of millions of dollars, that appear to be having difficulty, according to anecdotal reports. Citywide, the most successful job trainers are finding employment for about half their clients; the least, for barely more than one in 10.

The numbers can be deceiving. “Making the placement is not hard,” explains Martinez. “It’s the retention. They’ll find a job for two or three weeks and then they’ll lose it.” Sometimes it’s simply that the client didn’t like the job, or wasn’t acclimated to the basic etiquette of the world of work–not calling in when they were going to miss a day, for example. But just as often, the reasons they ended up on welfare in the first place are the reasons they cannot stay employed: lack of child care, poor education, limited English skills, illiteracy, substance abuse problems. “It’s all the same barriers we weren’t able to fix in the past,” says Martinez.

Jason Cumberbatch, 27, faces a fairly common array of obstacles. When he finished a four-and-a-half-year drug sentence in November, he applied for public assistance. But in the five months since Cumberbatch got on welfare, his 10th-grade education, prison record and lack of work experience have done little to help him get a job. “Everyone has more barriers than before,” says one job-training executive. “At least half are very serious, whether it’s literacy or substance abuse or whatever.” Martinez goes even further: “I would say, my god, 90 percent of them have multiple barriers. I hate to say it, but these people are the bottom of the barrel.” Job-prep specialists generally agree that the best way to guarantee long-term employment is to give people marketable skills, raise their literacy levels, remove barriers like lack of child care, address any health problems. Familiarizing them with work culture is just one step–ideally, the final one.

“I would say, my god, 90 percent of them have multiple barriers. I hate to say it, but these people are the bottom of the barrel.”

Instead, seminars in dressing for success, résumé-writing, interviewing and other work-readiness skills are welfare recipients’ first and last training experience before they are pushed into jobs. Welfare clients keep going to the employment centers and following that curriculum for as long as they remain on the rolls, no matter how hopeless their situation. With classes meeting just two days a week, the process is often protracted. “They’re not moving into jobs as quickly as they could if they had concentrated attention,” says the chief executive of a job-training nonprofit.

Thelma Williams, for one, has been on public assistance for 10 years. Her biggest problem is her health: Diabetes, obesity, fibroid tumors and back pain are a debilitating combination. But HRA will not exempt her from work requirements. “I just don’t know what to do anymore,” says Williams, her eyes welling up with tears. “I’m just so tired.”

Four years ago, Williams was working toward her GED, then got a letter from HRA saying she had to work for her welfare check. Ever since, she’s been mopping floors at the Supreme Court in Brooklyn. “I don’t have skills. If you have computer skills, you’ll find a job,” says Williams. “You need a diploma. You need skills. When you don’t have that, doors are closing in your face.” She was sent to Martinez’ offices last May to spend two days a week searching for a job. But a year later, still with no skills, no diploma and a host of health problems, she remains unemployed.



The city’s contracts with the private jobs organizations dedicate four lines of text to stipulating that contractors should provide job-training services. But they say nothing about what kind, when or how much. Pressed for time, many contractors stick with the basics required of them. The for-profit company Curtis and Associates, for example, which has $62 million in contracts to operate both an assessment center and an employment center, runs a job readiness program that offers help with résumés, access to phones and fax lines to get them out, and the latest want ads. It refers clients out for specialized preparation for jobs like security guard.

Community organizations that work under the Non-Profit Assistance Corporation have gone to unusual lengths to make sure they can do more than just shunt clients through the system and forget about them. Williamsburg Works, for instance, runs training programs, has a computer room where clients learn basic computer skills and software, and offers ESL classes and even training for commercial driver’s licenses. It also provides intensive case management from the get-go.

Much of that comes with NPAC’s help: Grinker’s organization has raised $3 million from sources other than HRA and scrounged for donations of equipment and other basic resources from private funders. “It’s up to the contractors to decide whether to develop the resources for training,” explains Grinker. “HRA has said clearly, ‘We’re interested in getting people into a work situation, and to the extent that you build in training because you think it’s a good way to do that, fine, but we’re not going to pay for it.’”

But even NPAC’s modest efforts don’t come easy or cheap. It got IBM to donate equipment for three computer centers, where trainees learn computer basics, set up e-mail accounts and get familiar with office software and the World Wide Web. With funding from the International Bank of Japan, it developed a series of job-readiness exercises. NPAC even finagled free checking accounts for recipients at Citibank, along with on-site financial counseling.

In all, NPAC’s budget for a year and half comes to $7.8 million. Just $4.8 million of that comes from HRA contracts. “This is just what we believe is appropriate to give these workers a reasonable opportunity not only to get a job, but to stay in a job,” explains Grinker. “Some other contractor may be about job placement, period, and they think that’s all they need. I’m not going to say that’s wrong. Ours is more costly, has more pieces to it. And we think it’s worth the effort.”

Other groups–usually nonprofits, often small–are also cobbling together enhanced programs beyond what the city’s contracts cover. One organization offers a culinary-arts program, funded by a mish-mash of private grants. Another uses private funds to help clients purchase items like eyeglasses–critical for reading job applications, but expensive.

Offering in-depth training is costly, and organizations say there’s no way they can provide it without raising other money. “The contracts we have now are grossly inadequate,” says a senior staffer at a major subcontractor. “We have to raise other money. It costs two to three times what the city thinks it’s going to cost to get someone to the point where you can help them in a real way.”

Private funders of job-readiness programs say the city’s formula is not even the most cost-effective way to prepare unskilled people for work. “Between the wages and the instability and not being able to read, it doesn’t make sense to just do placement-only programs,” says Suzi Epstein, managing director of job training at the Robin Hood Foundation, which has funded job-training programs in the city for the last 12 years. Epstein believes a successful program has to evaluate clients’ educational and social-service needs, address them, and provide training to those who are ready for it. Placement alone, she says, “ends up costing more. You’re paying a few thousand dollars just to place them. You can pay a little more, get them a skill, and the long-term success rate is going to be better.”



So what is the success rate of these contracts? For all its emphasis on performance numbers, the city is refusing to release figures. Most contractors, too, are holding on to their stats tightly. Administrators at smaller nonprofit organizations believe overall success rates would be higher were it not for a phenomenon known as “creaming.” Fueled by the incentive of $2,500 for each client they place themselves, virtually all of the assessment contractors cherry-pick the clients who are the best prospects for work. Then, the major employment-skills contractors do the same. They ultimately send the worst-qualified on to their subcontractors, which bear the financial burden of taking them on until they get jobs. (Unlike the employment centers and their subcontractors, the assessment contract-holders also receive large sums of money for “engaging” clients in job-search and other activities, or moving them on to WEP, in addition to placement rewards–Curtis and Associates, for example, was scheduled to receive nearly half its assessment funding just for moving people through.)

While statistics aren’t available on subcontractors’ placement rates, the prime contractors they work with admit that subcontractors’ rates tend to be lower. “We only go into subcontracting to do HRA a favor,” boasts one prime contractor. “For just us, we place one out of two people. When you add in the subs, it’s one out of five.”

NPAC has banned creaming, as part of its mission, in Grinker’s words, to “maximize human potential.” Though it is the sole holder of its three-year, $7.4 million contract with the city, NPAC sends all of its clients directly to the community-based organizations. It functions exclusively as a conduit for information and resources, pooling together public and private grants and funds that it passes on to the subcontractors. As a result, NPAC’s subcontractors have to rely on job placements for only 50 percent of their funding, freeing up considerable resources to invest in longer-term training.

One innovation may improve prospects for some of the hardest cases: Late last year, the city opened up bidding on contracts to do job training and placement for “special needs” populations, including the homeless, non-English speakers, poorly educated people and ex-offenders. These contracts, too, are based on performance–payment kicks in only when clients graduate. All the costs of the actual training program have to be absorbed, at least temporarily, by the training agency, once again forcing a choice between cash flow and training clients.

“They’re supposed to fund me for training and in reality they’re not, because everything’s based on placement numbers,” says a 20-year job training veteran whose organization has applied for one of the new contracts. These new special-needs programs also will force private agencies to confront another hard reality: As Ronald Lee, deputy director of Williamsbug Works observes of his own clients, “There are always going to be cases that can’t be put to work.”

Ultimately, community organizations are most worried about the impact on clients who are poor and increasingly desperate. “We’ve got to be able to provide them with more than we’re doing at this point,” says one subcontractor. “But when you have pressure to make placements, you try to make the match as quickly as you can. If people are sitting in a classroom being trained, we’re not getting paid. And you’ve got to place people. There’s no alternative



In the business of moving welfare recipients to jobs, knowing exactly why someone hasn’t been working is key. After all, if a person has been stuck on the rolls because she can’t read, can’t afford child care or has been living in a shelter, chances are those will still be problems when she enters the workforce. That’s where assessments–careful evaluations of people’s needs and abilities–come in.

Four assessment centers are supposed to evaluate everyone who enters the door and, in theory, direct people to the help they need. But that assumes the assessment centers actually do the work: figuring out a client’s education level, health status, family size, work history, skill level, housing situation, counseling needs and work interests. For that effort, they receive $250 a client.

But organizations that end up working with those clients complain that assessments are being done quickly and with little attention, when they’re done at all. “I would say that 98.9 percent of our clients are not even assessed,” says Ada Martinez of Williamsburg Works. “They check off ‘Do you speak English?’ and that’s it.” Sometimes, the assessments are just plain wrong. “I have a woman that was assessed through HRA,” explains Jennie Santos, a caseworker who works under Martinez. “She’s mentally disabled–depression and schizophrenia–and they’re sending her to get a job. They say she has a high school diploma, but she doesn’t. They say she speaks English, but she doesn’t.”

One Brooklyn organization ran a training program that required a high school education, but had to cancel it because it didn’t get enough qualified people to fill a 15-student class. “We have not gotten anywhere near the number that we have requested, nor have we gotten people who are appropriate for the training programs we committed to do,” complains a program administrator. Trainers end up spending considerable time and effort figuring out what needs their clients have–needs the city already paid the assessment centers to identify.

Why rush through such an important step? “I think that in order to make sure the contractors get enough people to work with, they send us people who haven’t been through an assessment process,” says Craig Walker of the Consortium for Worker Education, which runs an employment program. He estimates that between 25 and 30 percent of the people his agency sees are not assessed. “It’s been an inconvenience, but we’d much rather have the referrals.”

• Finalist, 2001 Harry Chapin Media Awards •

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