One method of social welfare can be more than just a payout to the unemployed, which creates a incentive problem to remain on welfare and continue to be dependent on the welfare system. An alternative to such programs are programs which provide employment for those who desire it, which allows the participants to gain job experience they can use toward future employment.
New Hope Program
The New Hope program was incorporated in Milwaukee in 1990 in order to reform unemployment insurance and address the misaligned incentives in existing welfare programs. The mantra of the program was simple: create financially rewarding work. The main provision of the New Hope program was that those who desired employment were assigned a case worker who would help participants find private-sector employment. If employment could not be found, participants would be put into community service jobs (CSJs) which carried a six-month employment limit; participants were limited to two CSJs .
Benefits of the New Hope Program:
- Work would pay. Earnings would be guaranteed above the poverty line to each New Hope participant who worked a minimum of 30 hours a week.
- Healthcare and child care. Meeting the 30 hour minimum would allow participants a subsidy toward healthcare and child care. (Benefits would be withdrawn slowly with increases in income)
- Work requirement. Those who did not meet the 30 hours per week minimum would not receive the earnings supplement, health care subsidy, or child care subsidy.
- Government benefits. New Hope was not a complete poverty policy (it was billed as a foundation) participants could still access government benefits (AFDC, EIC, Medicaid, etc.).
Positives of New Hope
The idea behind the New Hope program was an admirable one, that people have a right to work, but people should not have a right to receive money if they didn't. Overall the program was well received by the participants, especially to the self-esteem and work ethic of those involved. Across the board the participants were happy that they were contributing, and not dependent on a welfare check. Most also believed the work requirement attached to the program was fair.
Negatives of New Hope
The program was not all positives, however, as with most public policies there were costs. One such cost was the idea that the New Hope program created "make-work," or fake employment that is nothing but a burden on taxpayers. The CSJ program was seen as the guilty party in this, for if private-sector employment could not be found, participants were funneled into CSJ positions. (Another negative could be seen through the effects on children, mainly the denial of benefits to children should the minimum work-hours requirement not be reached. The prevailing thought was that the children were innocent of the shortcomings of their parents, and one of the main ideas was that social programs should protect the safety of children first and (foremost)which is imperative above all).
- ↑ Gutman, Amy, and Dennis Thompson. "Ethics & Politics: Cases & Comments. Belmont:Wadsworth-Cengage Learning, 2006.
- ↑ http://www.mdrc.org/Reports/NewHope/NHEXCSUM.html
- ↑ Ibid.