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In August 1994, New Hope opened its doors in two of Milwaukee’s poorest
neighborhoods.
New Hope was created to fit the contemporary social, political, and economic
context of the United States. Its package of benefits was not intended to cure
all of the structural and institutional causes of poverty, nor to replace a
system of cash assistance for people who could not work. It was designed to
address some important barriers to work created by current conditions in the
United States—low wages for people with few skills, the absence of universal
health care, and the lack of universal or low-cost child care.
Key Program Elements
Universal benefit
- Based on the belief that everyone deserves the opportunity to escape poverty
through work, the program was available to all adults who were willing to
work, not just those with dependent children, a significant departure from
past and current welfare policies.
Menu of options
- Individuals could pick and choose the supports that fit their needs,
rather than be fitted with a one-size-fits-all program. For those with dependent
children, the system was carefully designed to make work pay more generously
than welfare. If a participant could not find a job, the program provided opportunities
for temporary community-service jobs that paid the minimum wage but
still qualified that person for benefits.
What New Hope required:
- Proof of 30 hours of work per week
What New Hope provided:
- An earnings supplement that raised income above the poverty
line
- Subsidized child care
- Subsidized health insurance
- If needed,
a temporary community-service
job
- Respect and help from New Hope staff
Who
was eligible:
- All adult men and women, regardless of family status,
with low family incomes and living in Milwaukee's
poorest neighborhoods
Different from Welfare
New Hope was consciously different from welfare.
- It was voluntary. If an individual was not ready to meet the program’s
full-time work requirement, he or she could come back when ready.
- All of New Hope’s services were available in a single office to
reduce the time-consuming and confusing process of dealing with multiple
agencies.
- Unlike most welfare offices, caseworkers operated under the philosophy
that the program was a social contract, in which both New Hope and the participant
brought something to the table, rather than a paternalistic scheme that “acts
upon” its clients, telling them what they must and must not do.
Costs to implement nationwide
Rough estimates place the cost of New Hope at $3,300 dollars more per participant
per year than Wisconsin now spends on welfare programs for low-income families.
The question is whether the benefits from improved child outcomes and more
families living above the poverty outweigh the costs. As ample research
has shown, poverty has serious ramifications for children and families,
in school, health, and over the long-term.
Where to from here? Policy Directions
If a New Hope program were implemented state- or nationwide, the following
should be considered:
- Ensure universal access: the tax system offers a model—individuals
at all income levels can claim credits and exemptions as long
as they qualify for them.
- Ensure benefits are consistent and guaranteed
- The core of such a program would be an earnings supplement
- Provide automatic eligibility for subsidized health insurance to participants
and their families
- Provide child-care subsidies
- Make community-service jobs available to those who cannot find work. The
jobs must pay real wages and require people to meet the real
demands of the workplace.
- Ensure that caseworkers are well-trained and helpful. Design a management
system that encourages staff to treat clients with respect and
make the client’s
success their goal. The reward system for the staff must be designed
around the goals of the program: helping clients find and keep jobs, making
sure that participants gain access to the benefits to which they are entitled,
providing referrals to agencies that actually offer the needed
services, returning clients’ phone calls, and following up on requests
for assistance.
- Keep the work supports distinct from both cash assistance and tax credits
- House the program in a state Workforce Development Board or a network
of comprehensive job centers; One-Stop Career Centers, which
were established under the federal Workforce Investment Act (WIA), are a
good option.
- Create a foolproof verification system (verification every 3 months seems
most feasible)
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