Report: Safety-net programs discourage career advancement

by Georgia Center for Opportunity | Aug 21, 2024

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Report: Safety-net programs discourage career advancement

While safety-net programs such as Medicaid and food stamps support those in need, they “discourage career advancement,” according to new research from the Georgia Center for Opportunity.

The group’s “Workforce Engagement: A Missing Link in Understanding Income Inequality” examines the drivers behind perceived “income inequality” and offers what the group described as “actionable policy solutions.”

The group also suggested offering work incentives for part-time workers to help them move into full-time roles and increase access to vocational training and educational resources.

“The number of hours worked plays a crucial role in driving upward mobility for households in the bottom quintile,” Jason Gaby, a research fellow at GCO and author of the report, said in a release. “By increasing their working hours and transitioning to full-time employment, these individuals can significantly improve their financial standing,” Gaby added. “We can create an environment where more people can achieve financial stability and independence.”

Read the full article here

Removing work disincentives in the social safety net will strengthen upward mobility and the economy

by Kimberly Sawatka | Jul 9, 2024

Removing work disincentives in the social safety net will strengthen upward mobility and the economy

Policymakers at the national level looking for ways to strengthen economic opportunity too often fixate solely on expanding government programs. Instead, they should embrace a simple goal: eliminating barriers faced by people striving to improve their situation. Removing work disincentives in the social safety net is the best place to start.

A clear example of this kind of disincentive is the benefits cliff: a circumstance in which a raise or a new job can trigger a disproportionately large reduction in safety net benefits, making the household worse off.

Aside from the shock to household stability, such experiences can create the impression that accepting work opportunities — such as a job offer, a raise, or working more hours — is not actually worthwhile for a family.

According to the Georgia Center for Opportunity’s benefits cliffs calculator tool, a Utah single mother of two could typically start to see these “cliffs” between $25,000 and $35,000 in annual earnings, or about $12 to $16 per hour.

To read the full article in the Washington Examiner click here.

Unraveling the Damage Done by Our Welfare System

by Randy Hicks | Apr 30, 2024

Unraveling the Damage Done by Our Welfare System

Education, employment, and family formation are “the building blocks for a flourishing life,” says the leader of the Georgia Center for Opportunity.

But, unfortunately, America’s welfare system includes penalties for both work and family formation, Randy Hicks says.

Although the safety net may not intend to punish work or the family, Hicks says, it does that through policies that reward Americans with financial benefits for earning less or remaining single.

Among all the states, Utah has created a model for a strong welfare system, he says. Utah integrated its workforce services with welfare services in the 1990s, so when an individual seeks government assistance, the first step is to help him re-enter the workforce, if he is able, before providing monetary benefits.

But around the year 2000, the federal government passed a law that made it almost impossible for states to integrate workforce and welfare services as Utah did.

To change this situation, Hicks says, the Georgia Center for Opportunity and the Alliance for Opportunity advocate congressional legislation to “give states the flexibility to do what Utah did: integrate workforce and welfare so that we’re not compartmentalizing someone’s life but viewing it holistically and viewing it all as simply a means to a flourishing life that includes work.”

Hicks joins this episode of “The Daily Signal Podcast” to discuss the path to restoring the value of education, work, and family in America.

Listen to the full podcast

U.S. House passes a bill that’s a step toward ‘One Door’ social safety-net reforms

by David Bass | Apr 10, 2024

U.S. House passes a bill that’s a step toward ‘One Door’ social safety-net reforms

PEACHTREE CORNERS, GA—Yesterday, a bipartisan majority of the U.S. House passed H.R. 6655, a Stronger Workforce for America Act, which establishes a crucial demonstration waiver for a handful of states to implement safety-net reforms similar to Utah’s “One Door” policy. As a member of the coalition group the Alliance for Opportunity, the Georgia Center for Opportunity has played an important role in educating lawmakers on the perils of the current social safety net that creates barriers to work and upward mobility.

H.R. 6655 revises the Workforce Innovation and Opportunity Act for the first time since 2014. The bill would give four states leeway to explore a “One Door” safety-net reform strategy similar to Utah’s model enacted in the 1990s. Utah consolidated federal workforce development and social safety-net programs into a single state entity and fully integrated the safety-net system into workforce development programs.

“This is an important first step toward improving the social safety-net in all 50 states and breaking down barriers to work and a flourishing life,” said Randy Hicks, president and CEO of the Georgia Center for Opportunity. “The next step is to broaden the scope to allow every state to explore ways to integrate workforce and safety-net programs. These reforms are badly needed. There are 8.9 million open jobs across the U.S., and the workforce participation rate hasn’t fully recovered from the COVID-19 pandemic. We must create a safety-net system that doesn’t trap people in generational poverty but provides a pathway to a better life.”

Under H.R. 6655, the five-year innovation waiver is only available to states with populations of less than six million and a labor force participation rate below 60%. According to the Alliance for Opportunity, currently only nine states fit the bill: Louisiana, West Virginia, Missouri, South Carolina, Arkansas, Alabama, Maine, Kentucky, and New Mexico.

Under the current version of WIOA, states are barred from implementing such reforms. Utah was grandfathered in and is the only exception.

The bill contains another potential pathway toward a One Door model as well. Three years after enactment of the law, any state’s governor can consolidate workforce programs into one entity, but doing so would require the approval of half of the chairpersons of local workforce boards.

“These reforms would advance the end goal for every work-capable individual in a safety-net program to participate in effective employment and training programs,” added Hicks. “Numerous studies show that the benefits of work extend well beyond finances, encompassing overall wellbeing and a host of other benefits. One Door reforms will help ensure we have a system that encourages people to find work and improve their lives.”

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Georgia Center for Opportunity (GCO) is independent, non-partisan, and solutions-focused. Our team is dedicated to creating opportunities for a quality education, fulfilling work, and a healthy family life for all Georgians. To achieve our mission, we research ways to help remove barriers to opportunity in each of these pathways, promote our solutions to policymakers and the public, and help effective and innovative social enterprises deliver results in their communities.

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How to ease the labor shortage by fixing the social safety net

by Randy Hicks | Mar 15, 2024

How to ease the labor shortage by fixing the social safety net

The United States is in the enviable position of having a labor force crunch: Too few workers chasing too many jobs. There is no shortage of speculation among economists about solutions to this labor shortfall. But one factor that could help, and is too often ignored, is the ways our nation’s current safety-net system prevents people from entering the labor market.

First, let’s consider the context we’re in. The U.S. unemployment rate has settled below 4 percent for over two years, the longest stretch since the 1960s. Even so, our labor force participation rate continues to lag, caused in part by an aging population, declining birth rates, and aftereffects of the pandemic.

In January 2000, the labor force participation rate was 67.3 percent. Today, it’s 62.8 percent. That might not sound like much on paper, but consider that it means 1.7 million Americans are still missing from the labor force compared to right before the pandemic alone. These are able-bodied, prime-age workers—defined as ages 25 to 54—and they are still on the economic sidelines.

What’s worse, the labor force participation rate is expected to decline even further to around 60.4 percent by 2032, according to estimates from the U.S. Department of Labor. On the flip side, consider that by 2023, 41 million Americans relied on food stamps to make ends meet and nearly 90 million Americans were enrolled in Medicaid.

These are the numbers and statistics, but they represent real human beings who are being left behind. One way to bring more individuals back into the labor market is by implementing badly needed reforms to our nation’s social safety net.

Read Randy’s full opinion in The Hill

U.S. Sen. Mitt Romney’s ‘One Door’ bill would allow states to integrate social safety net with workforce development

by David Bass | Feb 29, 2024

U.S. Sen. Mitt Romney’s ‘One Door’ bill would allow states to integrate social safety net with workforce development

PEACHTREE CORNERS, GA—U.S. Sen. Mitt Romney, R-Utah, has introduced a bill that would free up the 50 states to implement a “One Door” safety-net reform strategy similar to the very successful model created in Utah. As part of the Alliance for Opportunity, a coalition of groups seeking to drive state-level change in the safety-net system, the Georgia Center for Opportunity is in full support of the bill.

U.S. Rep. Burgess Owens, R-Utah, has previously introduced a “One Door” bill in the House, a version of which passed out of the House Committee on Education and the Workforce in December.

Despite a historically low unemployment rate across the country, states are still facing a workforce crisis with millions of able-bodied Americans on the economic sidelines. Our nation’s workforce participation rate has not fully recovered from the COVID-19 pandemic. By the end of 2023, 41 million Americans relied on food stamps to make ends meet and nearly 90 million Americans were enrolled in Medicaid.

Many of these Americans remain stuck in a safety-net system that simply doesn’t work. The One Door to Work Act, introduced by Sen. Romney on Feb. 28, would allow states the flexibility to implement Utah’s consolidation of federal workforce development and social safety-net programs into a single state entity. The end goal is to help work-capable recipients reintegrate more quickly into the workforce, empowering them to achieve the independence, stability, and purpose that are crucial to human well-being.

“Every state should have the flexibility to design an integrated workforce and safety-net model that enables people to succeed,” said Randy Hicks, president and CEO of the Georgia Center for Opportunity. “Every hour a safety-net recipient spends finding their way through the system is an hour they can’t spend working their way into opportunity. The One Door to Work Act allows states to create a system that works for people.”

The dozens of programs that make up the system have different and, at times, competing goals, inconsistent rules, and overlapping groups of recipients. Often, recipients must resubmit the same information multiple times for multiple programs with the aid of multiple caseworkers. This disconnect fosters despair and keeps recipients in a cycle of poverty—as every hour spent navigating the system is an hour not spent pursuing a path out of it.

What’s more, there is often a disconnect between safety-net programs and welfare-to-work initiatives. The end result is that people stay mired in generational poverty rather than receiving a helping hand to live a better life. The One Door to Work Act would free up state governments to explore ways to create a safety net that works for all citizens and doesn’t cause generational poverty.

“There are 8.7 million open jobs in this country, and the workforce participation rate has not fully recovered from the COVID-19 pandemic. States need the flexibility in the One Door to Work Act to use our workforce dollars to move our people off the sidelines,” said Greg Sindelar, executive director and chief operating officer of the Texas Public Policy Foundation, which is a member of the Alliance for Opportunity.

“A robust workforce is not only integral to a thriving state economy, but also to its social fabric,” added Daniel Erspamer, CEO of the Pelican Institute for Public Policy, also a member of the Alliance. “When a person is unemployed for longer than six months, it is associated with decreased well-being, even measurably affecting mortality. The One Door to Work Act gives workers, employers, and taxpayers the system that they deserve.”

Learn more about the “One Door” policy here.

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Georgia Center for Opportunity (GCO) is independent, non-partisan, and solutions-focused. Our team is dedicated to creating opportunities for a quality education, fulfilling work, and a healthy family life for all Georgians. To achieve our mission, we research ways to help remove barriers to opportunity in each of these pathways, promote our solutions to policymakers and the public, and help effective and innovative social enterprises deliver results in their communities.

Schedule An Interview