Tidings & Revelations: Welfare Reforms that Works

As the Republicans craft yet another round of welfare reform legislation they should look at one of the few federal programs that has succeeded in moving recipients off welfare and into jobs: the refugee welfare system. The key to success in the refugee program has been the involvement of the private sector.

The Office of Refugee Resettlement in the Department of Health and Human Services was made by Congress in 1980 to resettle the 100,000 or more people who are designated by the State Department as refugees each year. The bulk of them come from Southeast Asia and the countries of the former Soviet Union. Congress has appropriated from $400 million to $900 million annually since 1980, much of which goes directly to refugees as welfare payments.

Contrary to conventional wisdom, refugee welfare participation is extremely high, often over 50 percent in those states with high welfare payment levels. Concerned by high welfare dependency, Congress passed the 1984 Wilson/Fish Amendment to the Immigration and Nationality Act authorizing the Secretary of HHS to implement pilot programs allowing private agencies a larger role in providing services to refugees. The Act allows private sector organizations, with government and private money, to take complete responsibility for providing welfare, medical care, case management, and employment services to refugees.

The results have been impressive. In San Diego, a pilot program was established in 1990 by the local affiliate of the U.S. Catholic Charities (USCC). Since 1990, 64% of the private sector refugees have gained employment and are off welfare compared to less than 25% of those resettled by the county government.

A Chicago project established in 1984 was even more successful. 74% of the refugees found employment within 6 months of their arrival. After 13 months only 2% of the refugees were receiving public assistance, compared to 40% of those who remained in the state-administered welfare program.

Why are private agencies better at getting refugees employed than local governments? The key may be that they expect more from their clients.

Bob Mosier, executive director of the San Diego USCC, describes the phenomenon this way: “Early employment and self sufficiency is the best avenue for accomplishing integration and social adjustment. Once people are socialized to a welfare state of mind, getting them off is very difficult. We refuse to buy into their self-pity or dependency syndrome. We challenge and support the refugees…and we hold them accountable.”

The staff of the private institutions believes that refugees must seek employment at the earliest possible time. Many state government bureaucrats feel that refugees should be allowed to remain on welfare until they can compete for middle class jobs — which often takes years.

But refugees who don’t find employment within one year after arrival usually remain on welfare indefinitely. One study in California found that refugees who were not working within one year had only a five percent chance of being employed after five years.

Another reason the private agencies excel is that the federal government expects more from the private sector than it does from government agencies. If a local government agency fails to move clients from welfare to employment, the federal government does nothing. But the feds require private agencies to get a specific minimum number of clients off welfare. If the agency fails to meet these goals, the government can take a variety of measures, including reducing the size and funding for the program, or ending it altogether.

In addition, the private institutions have much smaller bureaucracies than local governments, with lower overhead. And delivery of all services is centralized in one agency. The same case-worker who hands the client a welfare check also works on job training and job placement, giving the case worker much more authority with the client than the government intake worker has.

According to Dick Parkins, former Director of Policy at USCC, “The job development effort is much more aggressive. Our people hustle for jobs for refugees. There is a sense of ownership of the clientele.”

The federal government’s experience with the Wilson/Fish refugee program could be an important model for other welfare programs. There is no reason why the federal or local government couldn’t contract with private agencies to provide welfare and job services to American welfare recipients. In addition, many inner-city Black churches are well suited to provide such services. If the agency succeeded, it would get its grant renewed and possibly expanded. If it failed, it could lose the program.

A unique public/private partnership distributing welfare to refugees has proven successful. There is no reason it should not be tried now among regular welfare clients. If the pilot programs prove successful, then the entire welfare distribution program could be run in this fashion.


  • Chris Gersten

    Chris Gersten was Director of the Office of Refugee Resettlement in the Department of Health and Human Services from 1989 until 1993.

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