COVER  STORY    

Lois Burwell went from the welfare line in Hampton to the assembly line at Gateway 2000.

photo by Mark Rhodes

Gateway 2000, the fabled computer company from South Dakota, had just opened a factory in Hampton and was scouting for people like Burwell. A 36-year-old mother of three, she had been forced to accept public assistance when her husband was hospitalized with appendicitis and lost his job. Burwell had a retailing job at Burlington Coat Factory, but it didn't pay enough to keep the family afloat. Her husband's medical bills were staggering, and neither of them had health insurance.

Food stamps were helping the family through a tough time, but on this trip to the social services office, Burwell picked up something much better. A Gateway 2000 representative told her about job openings at the new plant, and she jumped at the chance.

"I never got this kind of opportunity before," says Burwell, whose responsibility on the production line has grown by steady steps from putting stickers on equipment to her present task of loading software into computers. "I thought these jobs would only be for higher-educated, college people," she says with amazement.

Burwell is now among 140 people at the plant who have been hired directly from the welfare rolls. Nine out of 10 have stayed on the job at least a year in positions ranging from assembly to shipping.

"We need to shatter the myth that they don't have a work ethic," says William Shugrue, the facility's human resources manager. Welfare recipients have often outshined their co-workers, enjoying a higher level of promotion and a lower turnover rate, he notes.

Burwell shows up early for her 6 a.m. shift. Last summer, she saved enough money to buy a car, which she uses to provide transportation for two fellow employees who are former welfare recipients. "I can't wait to get to work in the morning," she says with a laugh.

The Virginia Independence Program, a vast change in social policy from a decades-old entitlement mentality, debuted statewide in 1995. The work requirement of the reform, called the Virginia Initiative for Employment not Welfare (VIEW) occurred in phases, with all localities aboard by October 1997.

More than 10,000 VIEW participants -- about 75 percent -- now have jobs. In the first two years of welfare reform, they earned nearly $21 million in wages. Statewide, social-services caseloads have dropped by 34 percent, which represents a savings to taxpayers of more than $57 million.

Under the new system of mandates and incentives, able-bodied individuals on welfare must get jobs within 90 days of receiving assistance. Transportation, child care and medical benefits are provided for no more than two years plus one additional year of transitional benefits.

Gateway 2000 is among more than 2,700 Virginia businesses that have extended the career ladder to welfare recipients, a nontraditional labor pool.

Before being hired, Burwell had to complete two weeks of training at Thomas Nelson Community College, a commitment of three hours a night, Monday through Thursday. Gateway 2000 developed the program as a way for job candidates to demonstrate their ability and, more importantly, their desire. For those who make the cut, the starting wage is $7 an hour plus full benefits and profit sharing.

Since the first computer rolled off the assembly line in June 1996, Gateway has seen employees like Burwell move up the ranks from entry-level jobs to supervisory positions.

As a whole, the business community has met welfare reform with more esprit than most people predicted, according to Clarence H. Carter, commissioner of the state Department of Social Services. "The private sector told us, If you give us people who show up on time, are ready for work, leave their problems at home, ... we'll take care of the rest,'" he says. "We've done our part of the bargain, and they've held to their part."

About 62 percent of companies say they do not hire welfare recipients, according to an American Management Association survey.

One reason for their reluctance is misinformation about people on public assistance. Contrary to welfare stereotypes, 70 percent of recipients have recent work experience. Their real challenge is not getting a job but keeping it. Inadequate child care, health care and transportation make it tough for them to stay in the labor market.

Forty-two percent rely on public assistance only as a stop-gap measure, using benefits for less than two years. Fifty-nine percent have a high-school degree or better, according to the U.S. Department of Health and Human Services. Ninety percent of welfare parents are single mothers, most of them in their 20s and 30s -- a prime age group for workers. Like the general population, the average number of children in a welfare family is less than two.

One group trying to get the word out about this untapped labor source is the Welfare to Work Partnership, a national, nonprofit organization founded by five major firms -- United Airlines, United Parcel Service, Burger King, Monsanto and Sprint. About 2,500 companies, most of them with fewer than 250 employees, have joined the partnership, which was founded in May 1997.

"We're finding that so-called welfare queen never existed," says Eli J. Segal, who heads the Washington, D.C.-based partnership. "Those on welfare hated it worse than Bill Clinton or Newt Gingrich. And given half the chance, they can make it."

A company's decision to tap into the welfare population takes a commitment, Segal says. Each company should assess its existing resources, labor needs, personnel practices, company culture and its ability to nurture and motivate these new employees. Success, Segal says, requires an upfront investment.

The partnership created a blueprint to help businesses decide what hiring strategies suit them best. Marriott, for example, built an in-house program that handles everything from recruiting and training to job placement and retention. Welfare recipients who complete a 10-week training program get full-time, unsubsidized jobs in one of Marriott's hotels. Marriott also tracks new employees to ensure that potential conflicts with child care and transportation, for example, do not cause them to lose their jobs.

Most companies, Segal says, choose to work through an intermediary -- a private or public entity that acts as a broker between the public welfare system and the employer. Small companies, especially, use temporary staffing agencies or nonprofit community-based organizations to assist them with hiring and training welfare recipients.

"That's where the great American capitalism kicks in," Segal says. "Springing up with the reform are many that are in the business of helping businesses and welfare recipients find each other."

In Virginia, temporary agencies such as Adia Services Inc., Ameristaff Inc., Kelly Services and Manpower International Inc. top the list of businesses that have hired significant numbers of welfare recipients in the first 18 months of reform.

The private sector's rousing response to the program, Segal says, is based more on economic motivations than on any sense of social responsibility. "We emphasize the bottom line for businesses," Segal says. "Over and over, we tell them that it's a smart solution, that it satisfies the growth needs of employers."

One Saturday afternoon in mid-December, a small group of women gather in one of downtown Richmond's empty office buildings -- cashiers, nurse's aides, bank tellers and retail clerks on their day off. They eat takeout and swap tales about the 40-hour work week.

"Do you like your job?" asks Rita Ricks, an animated, no-nonsense businesswoman who addresses each of the nine women in turn. Her question brings a few nods, some grimaces and a slow shrug or two.

The first hurdle, finding employment, is behind these former welfare recipients. Now a few wobbly weeks or months into new jobs, they face the next sticky challenge: keeping the paycheck coming.

Some have to work different shifts than they were originally hired for, which has created problems with day-care arrangements. One woman says she likes the company she works for. Her co-workers are nice, but she isn't getting the skills and training she wants. Another complains about having to settle for minimum wage. They're not feeling too empowered.

"We always say take something and continue to look," Ricks tells the group. "Something is better than nothing."

These are, after all, the early days of welfare reform in Virginia. In July, Richmond and three neighboring counties hired the Greater Richmond Chamber of Commerce to provide job-readiness training and placement services for people on public assistance. This unprecedented pact put the formidable tasks of job training and placement in the hands of business executives instead of social services professionals.

This privatized approach to welfare reform involves three local companies -- Interim Personnel, Mirror Enterprise Inc. and Gordon Trayce Advertising and Public Relations -- that act as vendors to the four local governments.

Social services agencies refer people to Interim, a national staffing company with local ownership in Richmond, which puts them through a range of skills tests and evaluations to get a picture of their job experience and interests. Nearly all of these people undergo an intensive, three-week class that promotes self-esteem and imparts basic work habits such as punctuality and proper attire.

Ricks, who started Mirror Enterprise a decade ago as a professional development and training company, designed the curriculum. After participants successfully complete the 80-hour course, they are added to a computerized employment database and scheduled for interviews.

Each locality also has the option to contract with the Chamber of Commerce for transportation to get VIEW participants to and from work. So far, a private van company runs four shuttles throughout Richmond, and Henrico County recently committed to its first van service. Transportation assistance is vital for people like Gloria Ford, a 33-year- old single mother of two who doesn't have a car. Without the van service, she wouldn't have been able to secure a job as a nurse's aide at Bethany Healthplex on the opposite end of town.

Gordon Trayce's public relations campaign portrays hiring people from the welfare rolls as a good business decision. And the fact that the VIEW liaison is the local chamber of commerce -- rather than a government agency -- makes the business community more willing to participate in the program

"We've got as many people committed to hiring as are ready," says James Dunn, president of the 2,200-member chamber. "It's a pipeline effect."

Crestar Bank started posting job vacancies through the chamber's program in October. Now the bank has about 20 VIEW participants working in long-term temporary positions throughout the Richmond area. They earn between $7 and $8 an hour, with customer service representatives drawing $9 an hour. They undergo the same competitive hiring process as other workers.

"All the major employers here are looking to hire good people who are somehow not making it to their door," says Katherine McCary, vice president and manager of strategic staffing for Crestar. Welfare recipients, she observes, often have good work experience but may need help with the finer points of job hunting. As employees, they are hard- working and focused. "With transportation and day care provided, they have a fantastic attitude," McCary says, "and that's all we ask of anybody."

Temporary clerical assignments at the bank allow the trainees to gain experience and work toward achieving full employment from Crestar. McCary, who oversees temporary staffing for the bank's operations throughout Virginia, Maryland and Washington, D.C., encourages people to get six months of experience under their belts before applying for more permanent positions.

Like Crestar, UPS recruits from the welfare rolls, although company officials say they want to campaign more aggressively in 1998. In the Virginia district -- which includes Roanoke, Richmond, Charlottesville and Virginia Beach -- only nine people have been hired through the program. Most of them are part-timers in the Charlottesville office.

There have been some communication glitches between UPS and some of the local social services agencies, says Dennis Byrd, the parcel service's work force planning manager for the district. "Six months from now, I'm hoping we'll have better numbers," he says.

There are direct financial incentives for businesses that hire welfare recipients. Among the most popular inducements are the Work Opportunity Tax Credit and a wage subsidy program. Others include enterprise zone job grants and neighborhood assistance grants. Low-income workers also qualify for earned- income tax credits, which can help companies retain employees.

The Work Opportunity Tax Credit, enacted as part of the Small Business Job Protection Act of 1996, can reduce an employer's federal tax liability by as much as $2,100 per qualified worker. The current tax credit for a company hiring eligible low-income employees is 35 percent of the first $6,000 in wages, but only when the employee completes 400 hours of work.

The wage subsidy program, also known as subsidized employment, allows welfare funds that would otherwise have gone to a recipient's family to temporarily subsidize his salary. If a new employee had a monthly welfare subsidy of $600, for instance, his wages would be subsidized by $3.75 an hour. So if he were making $6 an hour, the cost to his employer would be only $2.25 an hour during a break-in period.

Critics of Virginia's welfare-to-work initiative charge that social services agencies may be reducing their caseloads, but they're not eliminating poverty. People are finding employment, but many of the jobs pay only minimum wage -- not enough to support a family. At 40 hours a week, someone making $5.15 an hour grosses only $10,712 per year.

But the program is not designed to eradicate poverty, argues Carter, the social services commissioner. "What it's about, and doing in great measure, is getting people on the road to self-sufficiency. ... There will be a number of individuals who will fall back, but the important thing is that many more people are getting up out of the system than ever before."

"Nobody's first job is their last job," Carter adds. The point of the employment mandate is for people on public assistance to develop the skills and confidence to get the next job.

Corinne Gott, director of Roanoke's department of social services, takes a dimmer view of the future. She says the job-readiness program is not enough. The state, she argues, needs to put its resources into a good educational program where welfare recipients can learn competitive skills. Gott also objects to the automatic two-year time limit for benefits like day care and transportation. Welfare recipients earning $5.85 an hour -- the average in Roanoke -- likely won't be able to shoulder those expenses two years from now, she says.

"A lot of people are overwhelmed with their situation," she says. "I'm seeing it now, and I'm going to see it at the end of two years."

Others worry that the welfare-to-work effort might stall when the buoyant economy takes a downturn. In the past four years, the state's economy has created 225,000 jobs. Unemployment is low and entry-level jobs are plentiful.

The timing was fortunate for Burwell at Gateway 2000. She is making the most of the opportunity by showing up early every day armed with determination and enthusiasm. Her Gateway 2000 job ended a financial struggle and an unhappy dependence on public assistance. "This is where I'm going to retire," she says. "I'm not looking for another thing. I said that on the first day."