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CASE STUDY

BRIDGING the

&
Cultures of
ec-

BUSINESS
Poverty
Welfare to career at Cascade Engineering, Inc.

What makes hiring and retaining welfare recipients difficult?


What are the keys to successfully retaining employees who are from poverty?
Is there a business case for hiring welfare employees?

L ISA H UDSON ’ S PERSONAL SITUATION REFLECTS THE DEMOGRAPHICS OF WELFARE : S HE IS A


SINGLE mother with four children. She’s far from the unfortunate stereotype of a lazy welfare recip-
ient, however, working the day shift, taking a full college course load after work, and then studying
until 1:30 a.m. Over the course of the day she shuttles her children between two childcare providers.
Hudson assembles parts for car dashboards and is a client in a welfare-to-work program, but sees her
future in the field of psychology rather than on the shop floor. “I love it [my job but] it’s not what I
want to do. ... I’m going to school for psychology, but in the meantime, if it takes me ten years to get
finished with my degree, I’ll be here until it’s finished.”
PHOTOGRAPHS BY JEAN HOYLE, JEAN HOYLE PHOTOGRAPHY

Hudson is one of more than 500 welfare recipients who have participated in Michigan-based Cas-
cade Engineering’s “welfare-to-career” (W2C) program. Cascade reaps benefits from the program
too, making it a win-win for all involved. Still, no one at Cascade, including the privately held firm’s
CEO and Chairman Fred Keller, would say that the program’s 11-year journey has been an easy one.
The plastics manufacturer has traveled the path, first alone and then with partner agencies, in many
small and fitful steps. With each step, the challenges that people in poverty face have become more
apparent to Cascade managers, as has the need for countervailing support systems. The process has
been one of continual improvement, with many cycles of observation, hypothesis building, experi-

by JAMES R. BRADLEY

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Welfare-to-Career participant Lisa Hudson prepares injection moldings at Cascade Engineering.

Cascade Engineering Highlights


Privately held company founded in 1973 by Fred Keller
Located in Grand Rapids, Michigan
Workforce: Non-union workforce of 1,100, including 99 welfare-to-career employees
Products: Plastic injection-molded products such as office chair seats, waste and recycling containers, and automotive parts
Notable Customers: Herman Miller, Waste Management, DaimlerChrysler, Ford, and General Motors
Manufacturing Competence: “2001 Processor of the Year” (Plastics News);
“1998 Manufacturer of the Year” (Michigan Manufacturers Association)
Corporate Citizenship: 1998 Ron Brown Award for Corporate Leadership;
2002 Large Employer of the Year Award (Goodwill Industries)

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mentation, and more observation. Ulti- formance, and social impact. Indeed, in now works in many ways to help others
mately, the sustained commitment of Keller’s experience, greater environ- through the same transition, including
the firm’s senior management and part- mental or social performance often pro- championing Cascade’s W2C program
ner agencies has been critical to the pro- vides Cascade with economic benefit and providing a ministry to prisoners.
gram’s success. either directly or indirectly through Another way is by being a positive role
improved morale and more dedicated model. “I still live in what is known as ‘the
Welfare-to-Career Champions employees. Making good things into hood’ ... and I refuse to move out because
The success of the welfare-to-career pro- good business sometimes requires time, I want to be a role model for kids that are
gram at Cascade is due in large part to and private ownership affords Keller the down there. ... When I was growing up
two champions who are committed to necessary patience. in my local community all I saw was the
the program’s success. Fred Keller makes Keller’s desire to help welfare recip- pimps, the drug dealers, the prostitutes,
the environment safe for innovation and ients fits his ethos; breaking the cycle of the robbers, and the thieves. I never saw
the accompanying intermittent failures. generational poverty1 was a worthy goal, those positive role models.”
Ron Jimmerson, human resources man- and he foresaw benefits for his company, The two cultures from which these
ager of community partnerships and its employees, and the Grand Rapids men come represent the two cultures
workforce diversity, is the innovator who community. Cascade would sustain its that are merged in Cascade’s W2C pro-
built the coalition of partners that sup- workforce and improve its work envi- gram. Despite their different back-
ports the welfare-to-career program and ronment, society’s cost of welfare assis- grounds, Keller and Jimmerson shared a
has played the dominant role in building tance would decrease, and welfare clients vision of a successful welfare-to-work
a bridge between Cascade’s culture and would lead better lives. Cascade’s altru- program that never faded, despite a num-
the culture of poverty that allows former istic intentions are evident – the pro- ber of false starts.
welfare recipients to join the working gram started in 1991 before labor was
class. scarce. But the need for workers in the The Development of the
Keller and Jimmerson come from hot economy of the late 1990s bolstered Welfare-to-Career Program
diametrically opposed backgrounds. the business case for welfare to work. False Starts Cascade’s welfare-to-work
Keller, now in his fifties, graduated from According to Mike Goldman, Cascade’s program was not immediately success-
Cornell University in 1967, worked as a vice president of business services, ful; it is a sustained learning process that
metallurgist at Pratt and Whitney for unemployment was 1 percent at that continues today. There were two “false
six years, and earned an MBA from Rens- time, which made finding workers starts” that preceded the current ver-
selaer Polytechnic Institute. He was con- through traditional channels difficult. sion. The first experiment was in 1991,
vinced that corporate America was Jimmerson, the program’s other when Jimmerson, then the human
“doing it wrong” and started Cascade to champion, grew up in generational resources manager for one of Cascade’s
pursue, in his words, “worthy goals.” poverty, in a single-parent household. divisions, partnered with Faith, Inc. to
Tall and well-spoken, Keller doesn’t Disaffected by society, he dropped out of recruit the unemployed and homeless in
think that the role of business is to focus school. “In my growing up there was a the Heartside area of Grand Rapids.2
only on economic success, especially at lot of animosity and hatred toward white Faith, Inc. provided pre-employment job
society’s expense, and then just “give people because I felt powerless,” he training, and the state of Michigan heav-
back” charity to the community. He recalled. “I can remember going to high ily subsidized the purchase of a van for
believes in “doing something good and school and in history class there was welfare recipients to drive themselves
then making it good business,” looking nothing in there about what blacks had to work.
for win-win outcomes for Cascade and contributed to America. ... So that does- Within two weeks, all 10 welfare
society together. Accordingly, Cascade n’t give a minority person any self-esteem recipients who Jimmerson recruited
measures its success using a “three- as far as the whole American system. through Faith, Inc. either quit or were
legged” strategy that is comprised of So I had a lot of bitterness that you will fired. “We had the employees drive, and
financial returns, environmental per- probably find in all the working poor, not so they would stop at the liquor store and
just African Americans.” the dope house, and if the driver didn’t
–James R. Bradley is an assistant professor at Jimmerson became a licensed social come in then none of them came in.”
the Johnson Graduate School of Management worker in a substance abuse clinic before The partnership had not considered that
at Cornell University. He can be reached at joining Cascade and has made the tran- welfare recipients were unaccustomed to
jrb28@cornell.edu. sition from poverty to middle class. He work culture and responsibilities.

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The welfare-to-work idea lay dor-


mant until 1995, when Keller and Stuart
Ray, the owner of a number of Burger
King franchises in western Michigan,
Welfare Reform and Welfare-
developed a partnership to help people
learn work skills in two stages. They
to-Work Programs
T
called it the Work-to-Work Program. At he Personal Responsibility and Work Opportunity Reconciliation Act
Burger King, welfare clients would learn (PRWORA) of 1996 was enacted to break the culture of dependency on
the responsibilities that were missing in welfare and motivated many welfare-to-work programs. The legisla-
the Faith, Inc. venture. As Keller recalled, tion encourages unemployed parents of dependent children to find work by
“They could learn team skills, and learn limiting welfare support to five years. Job training is also provided, and busi-
how to get to work in the morning, and nesses were given power in terms of how this training is administered.
how to set the alarm clock, and all that
sort of thing.” Keller then promised Who Are Welfare Recipients?
those employees a career at Cascade if The majority of welfare recipients now looking for work are women,
they stayed at Burger King for six because single-parent households – most often headed by women – are
months. In theory, both companies more likely to be in poverty. Cascade’s W2C clients reflect these demograph-
would reduce turnover. Six months was ics: The current W2C population at Cascade Engineering consists of 77
longer than many workers lasted at women and 22 men (In contrast, the non-W2C workforce is comprised of
Burger King, and the “trained” employ- 211 women and 430 men.)
ees would have a greater chance of suc-
ceeding at Cascade. Is Welfare Reform a Success?
Reality, however, did not match the • Advocates note the unemployment rate for single mothers dropped from
theory. Cascade did not hire one approximately 43 percent in the 1980s and early 1990s to 28 percent in 1999.
employee from Burger King, because all The rate for never-married mothers fell from just over half in 1996 to one-
their hires were either fired or quit before third in 1999. (See “America’s Great Achievement,” The Economist, Aug. 25,
the six months were up. “We found that 2001.)
the pay range at Burger King was really • Critics, however, argue that the decrease in unemployment is due more to
much too low for these welfare mothers the strong economy that persisted through most of 2001 than to PRWORA,
to support their families. ... They had the effectiveness of which is currently being tested by a weak economy.
already [worked in the fast food industry]
and so they were not really interested in
that whole process,” Jimmerson com- help increasing their self-esteem. “When viding support for W2C clients where
mented. “The other problem was that they begin to see all the opportunities their resources were lacking, and enlist-
the Burger King managers, and even that they can have here at Cascade Engi- ing the support of social agencies where
Cascade at that time, didn’t understand neering, the benefits, when we’re talking Cascade alone could not provide the
the whole culture [of diversity], and so about diversity, trusting and caring, and necessary support.
many of the Burger King managers were valuing people ... their appetites begin to
resistant to the program.” open up. They become very hungry [and Recognizing Two Cultures: Poverty
begin to ask] ‘How can I have these and the Middle Class An awareness
Learning from Failure It must be easy things? How can I have this peace and this that people on welfare lived in a different
for managers to conclude that welfare joy?’” culture than most Cascade employees
recipients neither have the will to work Until 1997, Cascade had not found dawned when Keller attended the Insti-
nor see value in a middle-class lifestyle the keys to providing such an environ- tute for Healing Racism. Goldman
when they experience failures similar to ment. Through two failures, however, described how understanding racism
Cascade’s early attempts. Once Cascade Cascade managers began to identify the was a precursor to understanding clas-
honed its approach, Jimmerson obstacles to hiring welfare recipients, sism and forced people to “confront their
explained, welfare clients would embrace which included coping with differences own stereotypes about people ... of
life in the working world – given hope, between Cascade’s expectations of W2C color.”
an appropriate work environment, and clients and the culture of poverty, pro- Goldman made another vital dis-

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{ }
domestic disturbances. When W2C
With each step, the challenges that people in employees do not notify their supervisors
of absences, Cascade managers have
poverty face have become more apparent, as have learned that it isn’t because they are
intentionally irresponsible. Those in the
the need for countervailing support systems. culture of poverty value the people in
their lives first and foremost; because of
this, some W2C employees will, when
covery through his work with a Head- and her philosophy and her approach caught in a moment of domestic crisis
Start program that helped Cascade man- has made on this community. Because I with insufficient support systems, instinc-
agers better understand the W2C clients’ grew up in the 1960s where ... you did- tively tend to the needs of their loved
perspective. The principal gave him a n’t make moral judgments and every- ones and forget to call their supervisors.
copy of A Framework for Understanding thing like that. When I heard Ruby Payne
Poverty, by Dr. Ruby Payne, used to help start talking about class differences, A Strong Partner and a Ripe Oppor-
students from poverty cope in the mid- immediately it kind of put me off until tunity The structure of the current W2C
dle-class school environment. Payne you recognize that you’re telling peo- program began to emerge in 1997, and
describes the “rules” of each of three ple no matter what their background is, Cascade’s timing was just right. Con-
social classes – poverty, middle class, and business is the middle class, and as Ruby gress had passed the Personal Responsi-
wealth – and how people in one culture Payne puts it, there are rules.” bility and Work Opportunity Act
are generally unaware of the rules of Managers’ heightened sensitivity to (PRWORA) in 1996, and the state of
the others.3 (Sidebar, p. 79) the poverty culture enables them to inter- Michigan was eager to show progress
Now mandatory for every employee, pret behavior that might otherwise be toward getting people from welfare to
W2C or otherwise, the “Hidden Rules” construed as disrespectful, antagonistic, work. This, perhaps, is what allowed
training based on Payne’s book helps or irresponsible as an artifact of the three key individuals in the Kent County
the W2C clients understand the mid- W2C employee’s background and as an FIA the necessary latitude to create an
dle-class workplace, while also helping indication that support rather than dis- innovative program.
non-W2C employees and managers rec- cipline is needed. Even occurrences Zylstra, Randy Koekkoek, a man-
ognize the challenges faced by W2C seemingly as innocuous as “W2C ager who works under him, and FIA
clients. Andy Zylstra, director of the employees being sick or wanting to go caseworker Joyce Bosscher had seen
Kent County Family Independence home,” according to Ed Baweja, a pro- the ineffectiveness of welfare assistance
Agency (FIA), a state of Michigan agency, duction supervisor, could be a sign “that firsthand, and Cascade was their oppor-
emphasized the importance of Payne’s they are having a problem outside of tunity to finally structure a program
work. “You just can’t appreciate it work.” Such absences can be sympto- that worked. “We’ve been ready to do
enough, the impact that Ruby Payne matic of problems with children or other something like this for years,” said Zyl-
stra, but finding a business partner with
Keller’s commitment had been diffi-
THE HIDDEN RULES OF SOCIAL CLASSES cult. Koekkoek knew that Bosscher, a
28-year veteran in the welfare services
POVERTY MIDDLE CLASS WEALTH
field, was perfect for the task of on-
Possessions People Things One-of-a-kind objects site client support at Cascade, one of
the innovative features of the emerging
Money To be spent To be managed To be conserved program. Bosscher is intensely caring,
and invested which she says comes from a good
upbringing – guidance from loving par-
Time Focus on the Future most Focus on traditions ents, a large social family, and Christian
present. Decisions important. Deci- and history. Decisions values. She said that her job at Cas-
made on feelings sions made against made on basis of cade is “the first time that I feel as
of survival. future ramifications. tradition and though I have made a difference in peo-
decorum. ple’s lives.” Bosscher has passed up
opportunities to apply for promotions

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Angela Davis, a welfare-to-career participant, prepares sound absorbers

in order to stay with the program. wide, W2C clients often lacked reliable a local ministry called Angels Wings,
transportation and childcare, and suf- which Cascade partially supports, and the
Working with Partners to Support fered from domestic and substance Kent Regional Community Coordinated
Welfare Clients Managers have found abuse.4 In 1997, Jimmerson assumed his Child Care helps clients find suitable
that, besides learning the “hidden rules,” current position and, with vital support childcare. The FIA coordinates a host of
W2C clients had to overcome other from FIA managers, developed a coali- other agencies that are contractors to
poverty-induced obstacles. Consistent tion of agencies to meet these needs. the state of Michigan that help with job
with welfare-to-work programs nation- Transportation needs are provided for by training and on-site (emotional) adjust-

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ment to the workplace, includ- finds out why they did not
ing the Area Community Ser- come to work. Problems due
vices Employment and Train- to the conflict between the two
ing Council (also known as cultures are addressed before
Work First or Michigan- an employee is terminated
Works!), Ross Learning, and because of them.
Goodwill Industries of Greater Bosscher finds resources
Grand Rapids, Inc. for clients when their support
The coalition didn’t come systems break down. One
together overnight and, from client’s truck broke down, and
Cascade’s perspective, it took Bosscher helped her find a car.
time before all the social agen- As the client explained, “Yes,
cies could focus solely on the she tells me that there are these
W2C clients’ needs rather than programs out there and if
on their own interests. A facil- something goes wrong they
itator was hired to help with help me get a car. I got a 1990
the relationship-building Probe that’s real nice for
process and, with time, the $1,000. ... They say that I was
coalition members “divided dependable and they said,
up the turf” so that the respon- ‘Well, let’s get her in a car so
sibilities of each agency were she can get here.’”
clear and all of the clients’ Bosscher also counsels
needs were provided for. W2C clients before stressful
meetings with supervisors to
On-site Support Jimmerson help clients cope with the cul-
and Koekkoek concluded that ture of work. For example, a
the typical support provided common and acceptable
to welfare recipients was insuf- response in the culture of
ficient. Social workers shoul- poverty to criticism from a
dered high caseloads, and supervisor is anger, which can
clients received infrequent and lead to self-destructive behav-
impersonal service at large iors such as quitting. Bosscher
centralized social agency prevents such reactions to crit-
offices. Also, after clients are Ron Jimmerson and Fred Keller, champions of Cascade Engineering’s icism by discussing with the
placed in a job, most govern- W2C program. client beforehand what his or
ment-supported agencies pro- her natural interpretation and
vide support for only 90 days. “You’ve Cascade W2C clients with more respon- response to such a situation might be and
got people who have been in genera- sive support, especially because they what the proper reaction is in the work
tional poverty, or poor for a long time, handle smaller caseloads – 50 per case- culture.
and 90 days is not enough,” commented worker rather than 150 at the centralized Bosscher addresses not only the social
Jimmerson. Once an employee was facilities. Even after the official govern- issues in the workplace but also those at
placed in a job, the FIA often heard of ment 90-day cutoff for support, on-site home, because they eventually affect job
problems only after it was too late, usu- caseworkers continue to provide clients performance. Being in the W2C pro-
ally when the welfare recipient reapplied with unofficial support. gram can lead to new behaviors, for
for assistance after quitting or being fired. As an on-site caseworker, Bosscher example, which sometimes touch off
Jimmerson and Koekkoek worked quickly troubleshoots problems. She is domestic disputes that can lead to abuse
around this problem by placing FIA case- alerted to potential problems by daily e- and absence from work. According to
workers on-site at Cascade, an arrange- mail messages from the supervisors of Jimmerson, “Many of the women end
ment that no other employer in Michi- W2C clients. If W2C clients are absent, up in the Women’s Resource Center –
gan has. On-site caseworkers provide for example, Bosscher locates them and that’s one of our partners for domestic

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{ }
violence – because now the mother is try-
ing to save money rather than spend it,
which is a typical trait of those living in Cascade measures its success by financial returns,
generational poverty, and the boyfriend
or the husband is mad and so he goes environmental performance, and social impact.
into a violent rage.”
W2C clients appreciate the close,
personal attention, especially in com-
parison with the traditional support pro- rules.” Goodwill provided a retention spent on this and similar topics. The
vided at large centralized facilities. As specialist, Scherry Shabazz, who visited other half is devoted to on-the-job train-
Hudson said: “Like when those clients on the night shift. Although Good- ing.
[case]workers were down at FIA, they will workers are not formally allowed to Cascade managers attribute higher
weren’t personal. I didn’t want to be provide support for clients past the first retention of W2C clients, as well as other
bothered with them and they didn’t want 30 days of employment, Scherry’s super- employees, to the training and W2C
to be bothered with me really. But here, visors allow her to provide informal sup- support efforts. The monthly turnover
I know [Bosscher] cares.” Hudson appre- port for W2C clients past that limit, and rate for W2C employees is currently
ciates that the caseworkers and the other Scherry doesn’t hesitate to stop and ask around 3 percent per month and is all
support systems are available on-site. former clients how they were doing. due to involuntary termination. The
“Everything you need is right here.” turnover rate for all non-W2C Cascade
Continual interaction engenders per- Retaining W2C Clients employees is approximately 1.4 percent
sonal relationships between Bosscher Turnover data from Cascade’s early wel- per month, which is due to both volun-
and the W2C clients, many of whom fare-to-work efforts showed that clients tary and involuntary termination. While
consider her to be more friend than case- were lost primarily in the first two weeks a 3 percent turnover rate is a marked
worker. Close personal relationships and of employment. Cascade managers improvement over performance early
confidential support often motivate believe that exposure to cultural and on in the program and over typical wel-
W2C clients to approach Bosscher rather diversity awareness, including Payne’s fare-to-work retention, it nonetheless
than a Cascade manager when work or Hidden Rules, can prevent early causes implies an annual retention rate on the
domestic issues arise. The feedback of turnover, and so half of the one-week order of 69 percent.
received allows her to arrange special training program for new employees is W2C workers describe the Cascade
accommodations with Cascade man-
agement for clients in extreme situations
(without divulging confidential details).
“We had a domestic violence situation.
... [A female worker] was missing work
The Retention Problem
C
because she was so beat up and abused,” ompanies commonly experience low retention with welfare-to-work
said Bosscher, “and we identified that programs, which implies potentially greater costs for hiring, training,
and the company gave her a week off and administration than hiring through more traditional channels.
and we put her into an emergency shel- Poor retention is perhaps the main reason why many companies abandon
ter and got her connected with the legal welfare-to-work programs
system. ... She came back after a week
and walked in and gave her first-line • One study found that 46 percent of welfare-to-work employees lose their
supervisor a big hug and thanked him for jobs in the first three months, 63 percent in the first six months, and 72 per-
that kind of support. Would another cent in the first 12 months. (See Flynn, G. “Who’s Left in the Labor Pool,”
company do it? Maybe, but they’d never Workforce [Oct. 1, 1999]: 34.)
know that this was going on. The com-
passion might exist in a lot of companies, • The cost of hiring and losing an entry-level employee within the first 60
but probably not like this one.” days runs between $2,500- $3,000. (See Gooden, S.T. and Bailey, M. “Welfare
Goodwill Industries, which also pro- and Work: Job-Retention Outcomes of Federal Welfare-to-Work Employees,”
vided on-site support, is another exam- Public Administration Review, vol. 61, no. 1 [Jan.-Feb. 2001]: 83-91.)
ple of an agency willing to “bend the

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technical position in quality control. Cas-

{ }
Keller’s desire to help welfare recipients fits his cade was able to accommodate Rayann
with a day shift job so that she could be
ethos: Breaking the cycle of generational poverty with her daughter after school. Goodwill
Industries helped Rayann get to work for
was a worthy goal, and he foresaw benefits for his three months when she didn’t have
money to pay for insurance and regis-
company, its employees, and Grand Rapids. tration for her car.
The Costs and Benefits of W2C
work environment as supportive and laid her off. “Here, it’s more family,” she I conducted a pro forma analysis, based
familylike. Rayann, for example, enjoys explained. “This is my home.” Like all roughly on Cascade’s experience, to
working there so much that she’d rather Cascade employees, Rayann started at gauge the benefits of welfare-to-work
stay at Cascade than return to her former $10 an hour as a “Level A” employee; she programs on: (1) a company and (2) the
higher-paying job at the company that would like to progress to a “Level D” government and government-affiliated
agencies that support that company,
which I treat as a collective unit.5
COSTS AND BENEFITS TO A The analysis was aimed at assessing
WELFARE-TO-WORK COMPANY the marginal benefit provided by a wel-
NPV @ 20 percent fare-to-work program based on the rel-
annually evant cost components that we found at
COSTS Cascade.
Initial Training $8,000 From a company’s perspective, costs
Welfare Client Hiring Costs $145,000 involve the initial investment, including
Transportation Assistance $25,000 training; hiring costs for welfare-to-work
clients; and support for transportation
BENEFITS and childcare assistance.
Contract Employment Cost Reduction $290,000 Benefits include a reduced hiring
Wage Subsidies $630,000 cost for employees compared to those
hired through regular channels; wage
Gross Pre-Tax Benefits $742,000 subsidies for welfare-to-work clients; fed-
Federal Tax ($260,000) eral tax credits; and on-site casework-
Tax Credits $20,000 ers.
Net Marginal Benefit $502,000 What is a benefit to Cascade, how-
ever, results in costs to the government-
COSTS AND BENEFITS TO affiliated agencies. These include wage
GOVERNMENTAL-AFFILIATED AGENCIES subsidies for welfare-to-work clients; fed-
NPV @ 20 percent eral tax credits; on-site caseworkers; and
annually the initial investment, including train-
COSTS ing expense. The benefit, of course, is a
On-Site Caseworkers $350,000 reduced (welfare) assistance expense.
Wage Subsidies $630,000 The tradeoff between the hiring cost
Tax Credits $20,000 of welfare clients and the hiring cost of
employees through regular channels is
BENEFITS one of the main issues in this analysis. In
Reduced Assistance Payments During Program Horizon $ 1,400,000 Cascade, the cost of hiring a welfare
Reduced Assistance Payments After Program Horizon $240,000 client is less than that of a “regular”
Increased Federal Tax Receipts $260,000 employee. Cascade contracts with an
TOTAL BENEFITS $900,000 employment agency to hire “regular”
employees and officially employ them

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able at www.acf.dhhs.gov/news/welfare/reports/
until they satisfactorily complete train- employees, about what it means to employed.htm.
ing and a probation period. This imposes be in poverty. 5 This cost-benefit analysis implies that the com-
an additional cost above that for hiring 3. A strong system of support for pany in question:
Is a public corporation (note that Cascade is a pri-
a welfare client. Even so, maintaining people moving from poverty to vate company).
the same size workforce with welfare careers. Has roughly the same population as Cascade.
clients can become more expensive if While high-level program champi- Has a welfare-to-work program similar to Cas-
cade’s, which:
the retention of welfare clients is signif- ons were critical, the strong commit- Has access to and takes advantage of the same gov-
icantly less than that for “regular” ment of individuals at Cascade, the FIA, ernmental support (e.g., tax credits, wage subsidies,
employees. and all the other supporting agencies etc.).
Has similar relationships with social agencies as Cas-
Assuming that a program was imple- who personally believed in this program cade (e.g., on-site caseworkers).
mented for five years and then discon- was just as critical. Results in roughly the same retention performance
tinued and that cash flows are discounted The former welfare recipients are for welfare clients and “regular” employees.
Has roughly the same percentage of welfare clients
by 20 percent annually, the net present not the only winners, however. The in its workforce.
value was positive for both parties, and company and society as a whole have Hires welfare clients for this subpopulation that dis-
roughly as shown in “Cost and Benefits benefited. “The organization actually is place an equal number of employees from its tradi-
tional hiring source.
of a Welfare-to-Work Company” (See more energized,” according to Keller. Because comprehensive retention statistics for wel-
table, p. 74). Keller believes that Cascade “People are more focused because they fare-to-work programs that would allow detailed
receives collateral intangible benefits know that the organization values modeling are not available, we assume a retention
model that is based on learning curve theory. In this
from the W2C program as well. For everyone there and we actually get case, we have two “learning” components. First, as
example, a recent employee opinion sur- more done.” the company gains experience over time, it learns
vey indicates an improved working envi- how to better implement training and intervention
Acknowledgments practices so that the turnover decreases. Second, as
ronment, and Cascade managers also an employee gains more tenure with the company,
I am grateful to Alice Curry and Zoë Werner who
believe that overall retention rates are provided assistance with research and a preliminary the probability that he or she will be terminated
higher than they would otherwise be draft. I am deeply indebted to Linda Johanson, man- involuntarily decreases – this is consistent with the
aging editor of Administrative Science Quarterly, welfare-to-work literature and Cascade’s experience.
without the W2C program, perhaps due This second component is not a “learning” process
who provided editorial assistance on many drafts
to the awareness of diversity that W2C but who was much more a colleague than an editor in the traditional sense, but a learning curve model
has raised. in this endeavor. Substantial support was provided that allows us to effectively represent the decreasing
by Fred Keller, Mike Goldman, and Ron Jimmerson probability of involuntary termination over time.
of Cascade Engineering Inc., as well as numerous We calibrated two turnover models, one for the
The Right Stuff welfare clients and one for the remaining popula-
other Cascade employees. Special thanks are due to
Moving people from the welfare rolls Joyce Bosscher of the Kent County FIA, who tion, because the retention rates for these two
devoted a great deal of time to many interviews. groups are typically different.
to self-sufficiency has been a difficult 6 “Rolling off ” welfare is a term that describes the
Thanks are also due to other representatives of the
endeavor, but Cascade and its partners Kent County FIA, Michigan Works!, Goodwill point at which an employee no longer qualifies for
have discovered some critical success Industries of Greater Grand Rapids, Kent Commu- welfare assistance. As an employee progresses up
nity Coordinated Child Care, Ross Innovative Cascade’s career ladder and receives a higher hourly
factors along the way. Cascade’s W2C wage, his or her eligibility for governmental assis-
Employment Solutions, and Angels Wings Trans-
program has attained some measure of portation. tance decreases. For example, once a certain wage
success – 21 W2C clients have completely rate is exceeded, a W2C client may become ineligi-
1 Generational poverty occurs when a family is in ble for childcare assistance.
rolled off welfare, no longer receive FIA 7 Calabrese, D. Cascade Engineering press release,
poverty for two or more generations (see Payne,
assistance, and have become indepen- R.K. A Framework for Understanding Poverty, Revised April 2. 2002.
dent and financially self-sufficient.6 Keller Edition, RFT Publishing Co., Highland, TX, 1998).
encouraged a U.S. House Ways and Poverty is “passed on” when behavioral patterns,
values, and norms of the parents, which make
Means Committee, in testimony given income above the poverty line less probable, are
April 2, 2002, to craft future welfare adopted by their children.
reforms using Cascade’s program as a 2 Faith, Inc., is a private, nonprofit agency in Grand
Rapids that supports homeless people and welfare
model.7 Keller outlined to the commit- recipients. It provides job training in light assembly
tee the three keys to a successful W2C and packaging jobs on a contract basis to employ-
program: ers.
3 Payne, R.K.
1. An accepting organizational cul- 4 Examples of studies that cited transportation,
ture. childcare, and/or domestic issues as prevalent obsta-
2. Education, not only of new cles that welfare-to-work clients must overcome
include (1) Gooden, S.T. and Bailey, M.; and (2)
employees but also of existing “Helping Welfare Recipients Stay Employed,” avail-

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