If you have money in America, the odds are with you.
You likely have reasonably good health, and when something goes wrong, you can select and pay for the specialized medical care you need. Your robust social and professional networks can help you find and succeed at your job. If you want to buy a car or a house, or start a business, or make an investment or cover a loss, you have the money—or access to credit to make it possible. And if you, or your children, are arrested or otherwise need legal help, you can pay a qualified lawyer to get the best possible outcome.
But if you lack financial resources, the odds are against you.
While you are likely resourceful and have set goals for yourself and your children, you may lack the financial means to achieve them. You might face health challenges related to the environment you live in: lead paint, contaminated water, unhealthy food options, and limited access to medical care, to name just a few. You and your children may not have professional networks that will help you to access resources and jobs, and the systems that have been set up to provide assistance are complex, confusing, and confounding. If you find a service that’s available, it may not be what you need, or the government gatekeepers controlling access to that assistance may make assumptions about you and what you should receive. And if you manage to get ahead, one setback—a health crisis, cut in hours, or car accident—can send you back to square one, exhausting any savings and undermining your ability to work and support your family.The stress of your situation may impair your job performance and your children’s ability to learn, exacerbating the challenges your family faces. And your difficulties may pass to the next generation when, as adults, your children are likely to experience the same relentless challenges.
The numbers confirm this story, with discouraging consistency. Low-income people, especially those who live in predominantly low-income communities, experience worse health outcomes than people with more resources; in fact, on average, they live 15 years less than their wealthy peers. Two-thirds of people who file for bankruptcy cite medical issues as a key contributor to their financial difficulty. Researchers have found that transportation is another major factor affecting income—the longer an average commute, the worse the chances of low-income families moving up the ladder, as a broken-down car can mean the loss of a job. Even minor legal infractions—such as a traffic ticket—can balloon to thousands of dollars when fines, processing fees, court costs, and collection costs are added to the original penalty, with jail time a possible result of failure to pay. Given that the average family has less than $9,000 in savings, and that research shows more than four in 10 American adults couldn’t cover an unexpected $400 expense, financial stability is out of reach for far too many.
Black, Latinx, and Native families are less financially stable than White families, who hold 10 times the wealth of Black households and eight times that of Latinx households. Structural and systemic barriers, rooted deep in our nation’s history, have stripped wealth from communities of color over time and contributed to a persistent racial wealth gap. These barriers also intersect with barriers to wealth-building for women, who are more likely to be poor than men.
Female-headed households comprise over half of all low-income households with children in the United States, with Black and Latinx families making up a disproportionate share.
Unfortunately, the system put in place to help low-income families includes a maze of 126 separate programs by one count, managed by six different federal agencies with varying eligibility requirements, access points, and application procedures. While more than half of the total population has incomes below 200% of the poverty line, and is likely eligible for some form of assistance, just a quarter of these families receive help from a federal program. What’s more, many low-income Americans may enroll in just one or two of the many programs for which they qualify, likely due to program complexity and the stigma associated with public benefits. The lack of coordination across programs means that people make rational trade-offs with dire consequences. For example, accepting housing assistance may mean moving away from a support network, free child care, or easy transportation to a job. And modest success can be easily reversed when a family starts to get ahead and then loses eligibility for programs it still depends on due to an increase in income.
The intergenerational aspects of poverty are well known. Adults who were poor during at least half of their childhood are 75 times more likely to be poor than those who were never poor as children. The outcomes are worse for Black Americans, who are more likely to be poor as adults than White Americans with similar exposure to poverty during childhood.
It doesn’t have to be this way.
We strive to ensure that every family is able to secure what it needs to pursue its goals, including financial security.
WHO WE ARE
Organizations in the America Forward Coalition recognize the power of families to change their circumstances if they have access to information, financial capital, and the services they need. Some Coalition members provide social service navigation help or coaching. Others create jobs or provide working capital directly to families. Still others offer targeted services, develop affordable housing, or help low-income communities improve the quality of life and economic opportunities for residents.
WHY WE CARE
Economic circumstances affect every aspect of the current and future well-being of adults and their children in every kind of community across America.
While Americans still believe the United States is a nation of opportunity, the fact is the number of people moving from poverty to the middle class has steadily declined. Studies by the Urban Institute and the U.S. Treasury have both found that about half of the families who start in either the top or the bottom 20% of the income distribution are still there after a decade, and that only 3-6% rise from bottom to top or fall from top to bottom. Black Americans, households headed by women, and households with more children have the lowest probability of improving their economic circumstances. Sadly, those families who do find a way out of poverty have a 50% chance of becoming poor again within five years. For those who were poor for at least five years, more than two-thirds will return to poverty within five years. Many efforts to end this vicious cycle provide fragmented and sporadic jolts of support without systemically addressing its root causes or valuing the strengths that families and communities possess. We are not making fast-enough progress to reduce the number of people living in poverty, or the number of places experiencing long-term, large-scale persistent poverty.
Policy approaches should be rooted in the ability of low-income people to set their own goals, while providing an easy-to-navigate set of services they can access as needed. Investment in whole communities is needed to build results-oriented, inclusive ecosystems that support the economic success and well-being of people trying to find a pathway out of poverty.
Organizations in the America Forward Coalition illustrate promising approaches to support families’ efforts to overcome the debilitating effects of intergenerational poverty. These organizations offer insights about how such a system could work, starting with the importance of recognizing families’ own resourcefulness. For example, in response to policies that penalize families who struggle to build the necessary assets to weather the next crisis, the Family Independence Initiative (FII) developed an alternative approach: partnering with, learning from, and investing directly in families. With this approach, the families are the experts and FII staff act only as the story-gatherers, connectors, and advocates for the FII model alongside thousands of family partners. FII provides an environment and technology platform for families to build their own community, learns about the actions and activities families are taking to improve their lives, and designs direct capital investments to match their initiatives. Families join FII with five to seven other families in their community. They make a two-year commitment to one another by meeting and journaling monthly. In return, FII provides funding through its UpTogether Fund based on the data they provide, accelerating their mobility. With a direct average investment of $3,200 per family, during two years of engagement with FII, families report the following: a 27% average increase in monthly income; a 36% average decrease in subsidies such as TANF and SNAP; 88% of their children now earnexcellent, good, or improved grades; and $1,099 in funds saved through newly established retirement investment accounts.
Compass Working Capital similarly recognizes that assets are a stronger predictor than income of financial well-being and economic mobility, as they provide a cushion in times of economic distress as well as capital that can be invested in opportunities that move families forward. Unfortunately, the opportunity to build assets is out of reach for many families with low incomes, particularly families of color. To address this inequity, Compass provides experienced financial coaches to work with clients to help them understand their current financial situation, identify their personal financial goals, and chart a course for a more secure financial future. It also provides access to savings products and financial education workshops. An evaluation of Compass’s asset-building model for families living in federally subsidized housing, supported by HUD’s Family Self-Sufficiency (FSS), showed that participants earned more than their matched peers who did not participate, improved their credit and reduced their debt, and depended less on public assistance, resulting in more than $10,000 in increased income over a five-year period, at a net cost of only $276 per participant.
Addressing the challenges presented by fragmented and gap-filled support systems is another key to changing outcomes for people with multiple barriers to economic stability. For example, the Corporation for Supportive Housing makes assistance easier to access and more effective by combining affordable housing with services for people facing a multitude of complex medical, mental health, or substance use issues. Residents in supportive housing find homes of their own and are linked to intensive case management and voluntary, life-improving services including health care, workforce development, and child welfare. Structured as a tenancy, where residents pay rent and have the same rights and responsibilities of anyone renting, access to supportive housing is not contingent on meeting arbitrary behavioral thresholds. Nearly 40 independent studies over the past three decades have concluded that supportive housing results in tenants’ decreased use of homeless shelters, hospitals, emergency rooms, and jails and prisons, all while saving money or realizing budgetary offsets for many public institutions and using no more—and sometimes fewer—resources for better results.
LIFT engages volunteers to help low-income families secure the assistance they need. It partners with high-quality community and early child care organizations that refer parents and caregivers to become “members” of the organization. LIFT works to build a strong, trusted relationship with each member and pairs them with a professionally trained volunteer coach who works with them to create an actionable plan centered around family goals, such as increasing savings and reducing debt, finding educational opportunities, and securing jobs that can provide more economic stability. LIFT also provides families with funds to meet emergency needs and support long-term goals, connects parents to a broader community of their peers and volunteer mentors, and provides access to curated local resources and partnerships.
LIFT believes a critical step for strengthening its impact is to gather feedback directly from the families it serves. Through surveys, interviews, and focus groups, LIFT regularly collects and analyzes feedback and uses the insights to improve services. Among its most important findings are the importance of building relationships (members who report strong engagement with LIFT staff make up to three times as much progress on their long-term goals, such as securing a full-time job or enrolling in higher education); focusing on holistic solutions (members who report strong social support and self-efficacy go on to achieve 50% more outcomes); and meeting parents where they are. In response to direct member feedback, LIFT is piloting innovations to make its services more accessible, including co-location, weekend hours, and virtual meetings.
Roca similarly focuses on a discrete population: young men in crisis. Disrupting the cycle of incarceration and poverty by helping young people transform their lives, Roca’s intervention model is based on a simple, yet powerful theory: When young people are reengaged through positive and intensive relationships, they can gain competencies in life skills, education, and employment, and move toward economic independence and stay out of jail. Focused on males aged 17-24 in crisis, particularly those involved with the criminal justice system, Roca’s intervention has four core components:
Relentless outreach designed to meet young people where they are and build trust;
Transformational relationships using an intensive case management model;
Stage-based programming to increase young people’s ability to move toward economic independence through life skills, educational and pre-vocational, and employment programming; and
Engaged partners, including criminal justice, health, and education institutions, that work to increase systemic capacity to provide supports to young people facing significant barriers.
This rigorous commitment to results requires Roca to use intensive data collection and analysis to determine participant progress and staff performance, and ultimately determine the effectiveness of the model as a whole. The results speak for themselves: 97% of youth served have no new arrests, and 79% have held jobs for at least six months.
Other organizations take a community wide approach. For example, Local Initiatives Support Corporation (LISC) focuses on whole communities, working with residents and partners to forge resilient and inclusive communities of opportunity, including in rural areas. Recognizing the importance of local organizations to achieve these goals, LISC focuses heavily on building the capacity of local nonprofit community organizations that can address local shortages of quality and affordable housing options, health care and medical facilities, job opportunities, quality education, and digital access. With offices in 34 local markets and rural partners across 44 states, LISC supports its partner organizations through capacity-building grants, repayable investments, low-cost lending capital, and equity investments. Since 1980, LISC has invested $18.6 billion in communities around the country, resulting in $56 billion in total development—400,500 affordable homes and apartments, and 67 million square feet of commercial, retail, and community space. Over the last 24 years, Rural LISC has leveraged its $1.25 billion investments in its partners to secure $3.3 billion from public and private sources, enabling the production of 35,000 affordable homes and apartments, 1 million square feet of commercial and community space, assistance for 700 businesses, the creation of 12,000 jobs, and support for 20 early childhood centers.
The GreenLight Fund addresses systemic challenges in communities by basing its investments on the recommendations of experts who are close to the community serving as the focus of GreenLight’s work. With the assistance of a local advisory group, GreenLight assesses the community landscape to discover urgent unaddressed issues, where smart, effective approaches would make a significant difference in the lives of low-income children and families. It searches the country for the most effective solutions—the nonprofits that are creating new ways to deliver services, connect with their clients, and sustain their work. After conducting due diligence, GreenLight invests in nonprofits that are the best fit for the community, meet identified needs with innovation and impact, and can be successfully replicated. Using this method, GreenLight has launched 27 organizations across eight communities.
Other America Forward Coalition organizations support bridge-building work and service experiences. For example, having invested in 186 social enterprises in 26 states, REDF works to accelerate the success of employment social enterprises—mission-driven, revenue-generating businesses that employ, empower, and invest in the potential of people with barriers to employment. For example, REDF has invested in Clean Decisions, a janitorial and general labor service company solely owned and operated by returning citizens in Washington, DC. Not only does Clean Decisions employ members of the returning citizen community, thereby increasing their likelihood of success, but also it provides a significant support network, encouraging all employees to create life and career development plans they review on a monthly basis with management to outline their short- and long-term goals and discuss what Clean Decisions can do to help them on their path. Clean Decisions also provides access to a case manager, a mental health counselor, and weekly community-building gatherings. By investing in social enterprises like this one, REDF has helped thousands of individuals—typically people of color with limited education and employment experiences—to enter the workforce and often secure better-paying jobs in the traditional workforce after graduating from the program. Employment social enterprises supported by REDF have on average increased profits by 19% year-over-year and covered 105% of their costs through the sale of goods and services.
Service Year Alliance similarly strengthens a national network of programs that offer bridge-building experiences, with the mission of making a year of paid, full-time service—a service year—a common expectation and opportunity for all young Americans. Taking a systems-change approach, Service Year Alliance works to alter the narrative that opportunity youth are clients not contributors, improve policies to enable more young people to serve (including individuals from low-income communities), and influence practice by working with individual organizations and whole communities to connect service-year experiences to post-service employment. Research shows that individuals who do a service year develop essential workplace and leadership skills.
These programs tell a story about effective approaches to empowering adults and families to withstand and overcome intergenerational poverty. They:
Recognize that people are the experts on their own lives, including their goals and what they need to achieve them. These programs understand that people closest to the problems are closest to the solution, and their expertise should be respected.
Examine the whole ecosystem. They imagine what the system looks like from the point of view of the community members looking for services, and work to elevate and empower voices with direct lived experience with those systems. They break down silos to deliver a suite of interventions that work for the customer and address the mindsets that hold a problem in place. And they look for ways that the system can counter racial and other biases that exacerbate glaring inequities.
Use technology, but stress the human touch. They understand the power of technology to help people navigate a complex system, learn at their own pace with immediate feedback, and track data. But they also know that caring, coaching, and social capital come from people, not devices.
Partner across sectors to go beyond traditional approaches. They appreciate the value that peers, nonprofits, businesses, higher education institutions, volunteers, national service corps members, and others in the community offer. They help their partners understand how countering biases and unfair perspectives can create transformational impact.
Use data to track results and innovate to achieve better outcomes. They examine data to test approaches, and continuously innovate to increase their effectiveness. They disaggregate the data to secure inclusive impact, and to ensure they don’t leave some families behind. They commit to building evidence for what works but, with humility, recognize that what works for some communities might not work for others, or may require an altered approach.
A vast number of insufficiently interactive systems have been set up to reduce poverty in America, including: Medicaid; Temporary Assistance for Needy Families (TANF); unemployment insurance; workforce development and career and technical education funding, including the Workforce Investment and Opportunity Act (WIOA); public and subsidized housing; the Supplemental Nutrition Assistance Program (SNAP) and SNAP Employment and Training Program; the Community Development Block Grant program; AmeriCorps VISTA; the Earned Income Tax Credit and Child Tax Credit; programs to address homelessness; the Family Self-Sufficiency program; and numerous place-based strategies including Performance Partnerships, the New Markets Tax Credit, Opportunity Zones, and the Sustainable Communities Initiative. In addition, the criminal justice system and the civil legal system have disproportionate impacts on low-income families.
We propose a set of programs and policies gleaned from the experiences of America Forward organizations. These proposals would strengthen low-income individuals and families by recognizing their assets, investing in self-determined plans, making services easier to access, removing barriers to work faced by specific populations, and increasing investment in communitywide strategies.
23. MOVE 100,000 FAMILIES OUT OF POVERTY BY INVESTING DIRECTLY IN THE INITIATIVE AND STRENGTH OF LOW-INCOME FAMILIES WORKING TOWARD ECONOMIC MOBILITY.
Test innovative asset-focused strategies that enable families to become financially secure.
Programs and policies focusing on low-income people are generally needs-based, which disincentivizes initiative and mutual assistance, and leads to an ecosystem that focuses on deficits. Too many low-income people are faced with the untenable choice of either forgoing opportunities or losing their safety net assistance. Many mistake this plight for a lack of resourcefulness or ambition, when in fact, the opposite is true. Throughout our history, many groups of people—affiliated through religion, neighborhood, national origin, or workplace—have organized to pool their resources and pursue collective action to improve conditions for their members, using both mutual aid and political strategies.
To achieve the goal of 100,000 individuals permanently leaving poverty, we propose setting up test communities, using TANF funds or an alternative funding source, to engage cohorts of families who sign up to work together to support each other in achieving their financial and personal goals. Families would do this work in conjunction with a nonprofit partner that commits to providing information about available services and their impact, data and technology tools, and unrestricted financial seed capital. This system would leverage and enrich communities’ social capital, elevate natural role models, and provide advice and support—all from the peer group of the participating family. It would call on families to define their own goals, and find the pathways that work for them, with rich information about how others have succeeded and services available in the community. And it would offer access to financial capital that allows poor families to do what rich ones do—weather setbacks, invest in opportunities, and choose the future they want to have.
24. DEVELOP AN INCLUSIVE WORKFORCE DEVELOPMENT STRATEGY.
Recognize and address the racial, educational, and other barriers faced by people who are unemployed, or leave the workforce altogether.
Although the official unemployment rate is less than 5%, which many economists consider to be “full employment,” this statistic belies the reality that many people are not counted because they have left the labor market altogether due to health, disability, and other reasons. It also masks racial differences—Black Americans today are experiencing unemployment at Great Recession-era levels. Even controlling for parental income, White men earn more than Black men in 99% of census tracts. While the national unemployment rate is the lowest in 50 years, this figure primarily reflects White employment dynamics. In terms of educational attainment, for example, wealth inequality research has shown that White high school dropouts have the same chances of getting a job as Blacks who have completed some college or earned an associate degree. In fact, Blacks face higher unemployment rates than Whites at every level of degree attainment.
In addition, too many young adults struggle to enter the labor market or are unemployed. Experts count nearly 4.6 million “opportunity youth” aged 16-24 who are neither in school nor employed and often face the largest barriers to work. Racial disparities are significant among opportunity youth as well: White youth have a 9% disconnection rate, while 13% of Latinx youth, 18% of Black youth, and 24% of Nativeyouth meet the definition of opportunity youth.
Additionally, high unemployment is often concentrated in specific communities. Despite a robust job market and the fact that many companies are struggling to find skilled labor, the unemployment rate is 10% in low-income neighborhoods, compared with the overall national rate of about 4%. Racial factors may also play a role: In 20 of 28 Black-majority cities with more than 65,000 residents, the average Black unemployment rate is 12%, compared with the general unemployment rate of 4%.
At the same time, a related problem is on the rise—the growing “skills gap,” or difference in the skills required on the job and the actual skills possessed by prospective employees. As much as one-third of the unemployment rate may be due to the imbalance between workers’ skills and open jobs. By 2020, 65% of all American jobs will require post-secondary education and training beyond high school. While much of the national debate about the skills gap has focused on jobs in the for-profit business sector, social-sector organizations—nonprofits and government agencies—also experience workforce gaps, either due to unavailability of qualified workers or lack of funding to pay for the workforce they need.
To make a commitment to inclusive full employment, we propose six critical policy changes:
Reenvision the workforce development ecosystem and ensure that it adequately serves all populations, including high-need adults facing multiple barriers to employment.
Engage in job creation in a serious way, including both “bridge-building jobs” and permanent positions with nonprofits, to meet the demands of the future.
Make supportive services more seamlessly available across the workforce development and higher education sectors, to enable low-wage workers to climb the economic ladder.
Utilize an equity-focused measurement system that tracks not only employment, earnings, and credential or degree attainment, but also the progression of men and women, racial and ethnic groups, court-involved individuals, and other groups of people with systemic barriers.
Remove the nearly insurmountable obstacles that returning citizens face when they seek to rebuild their lives after incarceration.
Pilot inclusive full-employment zones to demonstrate the power of these approaches.
Each of these policies is discussed in more detail on the following pages.
1. Connect the dots to build an inclusive workforce development ecosystem.
Assess, improve, and integrate all the systems that prepare and connect people to work, including the perspectives of both clients and employers.
Any effort to change the circumstances of those now left out of the economic mainstream—and reverse the negative impact on our overall economy—demands that we rethink the way we invest public resources in the workforce development ecosystem. We use the term “ecosystem” intentionally. Many people think of workforce development too narrowly, excluding the higher education system, omitting the role that national service programs play, and discounting many external factors that drive who participates and who benefits from the system as a whole.
Looking at the workforce development ecosystem broadly highlights important inequities. Many higher education institutions are designed for full-time college students right out of high school and do not work well for adult full-time workers who may wish to pursue a part-time degree. The federal government invests $139 billion in postsecondary education, mostly for financial aid for undergraduate degree programs. However, today’s students are increasingly older, with family or job responsibilities, and prefer short-term or part-time education options. In addition, the majority of the $170 billion that employers invest in formal training each year goes to workers who have already earned bachelor’s degrees and work in higher-paying professional and managerial positions.
A recent report by the Strada Institute for the Future of Work and Entangled Solutions surfaces key recommendations to build an inclusive workforce development ecosystem that align with the America Forward Coalition organizations’ experiences. These include building systems with employers in mind, including implementing “try before you buy” outsourced apprenticeship models to reduce risk for employers and develop sustainable revenue streams; positioning on-ramps as robust talent pipeline solutions for employers, rather than corporate social responsibility efforts; extending support services beyond job placement for retention and advancement; and incorporating data measurement systems to guide decisions by learners, employers, and providers.
A critical element is having effective organizations focused on connecting adults without postsecondary credentials to a broader range of economic opportunities. These organizations are guided both by the desires of learners to pursue goals that they define for themselves, as well as the needs of employers of all types, not just those from the business community. They ensure that learners are able to ramp up foundational literacy and math skills, get technical training and pursue certifications for a particular industry, have relevant information to make good choices about the education or training they will pursue, and ensure that the choices are available. These options include foundational skills training, traditional and short-term workforce development and credential programs, as well as two- and four-year higher education programs and national service. Organizations also offer or connect future workers to options for supports that will help them succeed, such as English language learning, remedial education, career counseling, mental health services, financial planning, housing, and transportation. They work closely with employers to ensure that program completers will have both the specific technical and content-based skills employers require and the competencies for workplace success they desperately desire. Crucially, these organizations all develop strong employer partnerships and commitments to hire through apprenticeship and internship models, as well as through proactive job placement services.
In most cases, these connector organizations already exist in one form or another. But they aren’t resourced or mandated to approach their work in this way. Technical assistance and training is needed, as well as a robust data system and feedback loop to learn what works where.
Only by reenvisioning the workforce development ecosystem can we ensure that it adequately serves all populations, including adults with lower levels of education facing multiple barriers to employment.
2. Invest in bridge-building work experience, including social enterprise and
Expand opportunities for individuals with barriers to employment to develop workplace skills through well-supported employment and service experiences.
A second key component of an inclusive employment system is a network of organizations that provide bridge-building work experiences, offering opportunities to broaden learners’ essential workplace skills, including critical thinking, creative problem solving, communication, teamwork, persistence, self-efficacy, and professionalism. Organizations may also offer support services, ranging from remedial education to substance abuse counseling. Beyond traditional apprenticeship and on-the-job training, which qualify as bridge-building work experiences in some cases, we see strong promise in two strategies worthy of increased public investment: employment social enterprises and national service.
A. Employment social enterprises
Employment social enterprises, such as those funded by REDF, are mission-oriented businesses that provide bridge-building paid employment and wraparound services. They offset a share of their costs through earned income, and in some cases, support from federal programs, including the SNAP Employment and Training Program and WIOA. Evidence shows that social enterprise employees are more likely to retain a job for one year, obtain higher levels of income, and have greater housing stability compared with individuals who only received traditional workforce services. Despite their benefits, employment social enterprises face obstacles in obtaining the capital needed to grow. We see a three-part national strategy to scale employment social enterprises that can be adapted to state and local policy: Increase investment; expand the market; and enable social enterprises to access small business resources on an equitable basis.
Increase investment in employment social enterprises through an outcomes fund. Employment social enterprises are accustomed to operating in a market-driven environment in which their products and services must compete with those of other vendors, including traditional businesses. A multiyear fund to invest in the growth and sustainability of employment social enterprises can make periodic payments contingent on meeting agreed-upon outcomes.
Expand the market for goods and services produced by employment social enterprises. The public sector should use its purchasing power to drive employment social enterprises’ revenue and job growth. Procurement incentives can enable employment social enterprises to expand revenue, allowing them to hire and train more individuals overcoming barriers to employment. Policymakers should ensure that procurement policies include incentives for outcomes-based employment social enterprises in their business preference program, thus enabling them to secure contracts and potentially receive business technical assistance.
Treat employment social enterprises as small businesses for purposes of assistance programs, regardless of their legal form. Many employment social enterprises are nonprofits, which means they are not eligible for programs aimed at supporting the health of small businesses. To address this, policymakers should amend the Small Business Act to include nonprofit social enterprises within the definition of a “small business concern” so that they would be clearly eligible for loans, guarantees, and contracts under the Small Business Administration (SBA) programs and designations. Policymakers should also ensure that Department of Commerce policies and regulations include nonprofit employment social enterprises within the definition of a “small business concern” so that they would be clearly eligible for federal loans, guarantees, and grants targeted at businesses. And policymakers should allow the leveraging of existing Community Development Financial Institution and SBA resources to provide for technical assistance and best practice information about social enterprises through existing federal centers of excellence, technical assistance, and capacity-building programs to ultimately increase the capital available for start-ups and expansion of current social enterprises.
B. National service
While rarely recognized as such, national service is a kind of “civic apprenticeship” that combines work-based learning and career development with a motivating social purpose. The evidence shows that regardless of background, young people in full-time service learn workplace behaviors and skills, experience a specific field, make connections, and change their self-perception. Research demonstrates that the sense of purpose and direction developed through these experiences can inspire a young adult to pursue further education or advance on a career path, leading to future economic success, often in public-service fields that are experiencing talent shortages.
Two types of national service programs are designed to serve as bridge-building work experiences: youth corps and YouthBuild. Some youth corps and YouthBuild sites are also part of AmeriCorps, a diverse program that also includes locally designed and national models that fit this category.
The growth of national service would have a positive impact on the nonprofit workforce, providing both increased pipelines for talent while preparing corps members for future work in the sector. However, it could have an even greater impact on inclusive employment policy if policymakers do the following:
Increase funding for YouthBuild programs, and encourage diversification of and target funding to communities designated as inclusive employment zones.
Align expansion of AmeriCorps with workforce needs within the social sector, incentivize communitywide strategies connected to inclusive employment, and prioritize funding for programs that offer the opportunity to earn a credential or post-secondary credit.
Expand utilization of the 21st Century Conservation Corps authority to contract with youth corps to reduce the backlog of maintenance and other projects on public lands, including national parks, and create similar authorities within state and local government.
Encourage higher education to offer formal credentials that recognize postsecondary learning through national service.
Direct government agencies to develop national service programs to address priority needs within their jurisdictions, and integrate specific job skill development into the programs.
Formally recognize national service as a form of workforce development parallel to on-the-job training and apprenticeship, or create a subcategory in workforce programs.
Make national service an eligible category for GI Bill funding, parallel to on-the-job training and apprenticeship.
3. Create supportive service pools for trainees and low-wage employees.
Support common wraparound support systems that can be accessed by low-income people looking for—or training for—work, as well as workers who do not receive a living wage.
Although existing workforce programs allow for funding to be used for supportive services such as transportation, child care, mental health support, and assistance with housing for eligible recipients, research by the Institute for Women’s Policy suggests that many supportive service needs have been unmet. In addition, research by Race Forward suggests that less than half of One-Stop Career Centers and community-based organizations provide wraparound services for workers of color. Furthermore, once individuals become employed, they may lose eligibility for these services.
We propose a different system, where existing funding for these supports is pooled, matched by a national or state fund, made available to all individuals in bridge-building or other workforce development programs, and extended to them on a sliding scale until they achieve living wage employment. The pool would function like an HMO, modeled on innovative portable benefit structures or union benefit plans in trades where individuals commonly move between jobs.
4. Develop an equity-focused measurement system.
Change the way we measure outcomes of workforce development policy to incorporate race and gender outcomes as well as the quality of jobs.
While existing workforce development policy measures success based on employment, earnings, and credential or degree attainment, the measures do not speak to inclusive and equitable participation or mobility. Knowing how different racial and ethnic groups, court-involved individuals, and men and women are progressing—as well as the race and gender divisions and upward mobility potential of the career tracks they are pursuing—is essential to understanding the true impact of workforce development policies.
A new system should incorporate a measure of job quality, proposed by the Center for American Progress (CAP) and based on the system used by the European Union and other OECD countries, as well as “multiple measures of data analytics to help account for how much structures and policies mitigate—or reinforce—employment bias.” These measures would help drive a process of continuous feedback, with a focus on collecting and sharing data that inform and potentially transform workplace structures. CAP proposes the use of existing data platforms, such as Equal Employment Opportunity Commission data or a tool such as Equity Indicators (developed by the City University of New York Institute for State and Local Governance and funded by the Rockefeller Foundation), which measure the disparities faced by disadvantaged groups.
5. Remove barriers to employment faced by individuals who have been involved in the criminal justice system.
Address the unfair impacts of criminal background checks, qualifications for professional licensing, and eligibility requirements that discourage or prevent court-involved individuals and returning citizens from securing education and employment.
Today, 4.5 million Americans are on parole or probation, and 70 million have a criminal-arrest record of some kind. Given the size of this population, it’s obvious that the ability of court-involved individuals to secure employment is critical both to an inclusive workforce system and our economy. However, returning citizens, as well as those with criminal records for even minor offenses, experience significant barriers to employment. In fact, returning citizens are unemployed at a rate of over 27%—higher than the total U.S. unemployment rate during any historical period, including the Great Depression. While bridge-building programs like YouthBuild and social enterprises help, much more must be done to expand employment and education opportunities for a broader range of individuals with criminal justice system involvement. We suggest the following policy changes:
Implement policies to make it illegal to ask about criminal records on initial job applications, and develop systems to track and mitigate the impact of these policies, including increases in racial bias.
Conduct a comprehensive review of professional licensing requirements and remove inappropriate barriers to individuals with criminal histories.
Restore Pell grant eligibility to individuals who are incarcerated.
Enact automatic expungement of juvenile records for individuals after a specific number of years.
Remove barriers to entrepreneurship as a pathway to economic justice for currently and formerly incarcerated individuals, including starting ventures from inside prison.
Revise legislatively mandated extreme criminal background check requirements for AmeriCorps service that are unrelated to actual program requirements and best practices to protect people who are served, and that deter people from applying for positions that are in fact open to, or even designed to engage, court-involved or returning citizens.
6. Pilot inclusive full-employment zones.
Bust the myth that people who are not employed don’t want to work by developing comprehensive plans to ensure that everyone who wants to work can work.
What if we could guarantee a good job for every person who wants to work? The elements of inclusive employment described above, if present in specific communities, could demonstrate the power of inclusive employment policy by enabling everyone who wants to work to find a pathway to employment. A pool of funding, together with waivers that enable communities to “de-silo” funding streams, would enable selected communities to map workforce need and assets, find the people who have left or never entered the workforce, and create and implement a comprehensive plan for inclusive full employment.
25. REINVEST 50% OF THE “JUSTICE DIVIDEND” IN COMMUNITIES.
Increase the safety and well-being of communities that have historically higher rates of arrests by investing funding saved due to criminal justice reforms.
In the last decade, more than 25 states have taken steps to reduce the number of people under correctional control. However, despite a steady decline in the total number of individuals held in correctional facilities, spending on prisons and jails continues to rise in some states. For example, MassINC found that, between 2011 and 2016, the average daily population in all state and county correctional facilities in Massachusetts dropped 21%, yet correctional budgets consistently moved in the opposite direction, increasing by nearly 25%, or $254 million, to almost $1.4 billion. Although the state’s prisons and jails now hold 5,000 fewer individuals than they did at the beginning of FY 2011, under the proposed FY 2019 budget, correctional budget growth will have outpaced inflation by $117 million.
Simply reinvesting in the criminal justice system may not necessarily increase safety. Overusing police and prisons causes harm, particularly when concentrated in specific neighborhoods, particularly communities of color, because it leads to higher arrest rates for minor offenses by residents and, as a result, further destabilizes and depresses them economically. Research shows that neighborhoods are safer when residents work with local community-based organizations toward shared goals.
We propose that every jurisdiction that has reduced the number of people in the criminal justice system invest at least half of the savings generated into community-based organizations aimed at improving the safety and broader well-being of residents. Funded organizations should incorporate a decision-making role for local residents; provide research and data to inform their deliberations; and work in partnership with other community agencies, including school and law enforcement.
26. CREATE A WOMEN’S INNOVATION FUND TO CREATE DURABLE NEW PATHWAYS INTO THE MIDDLE CLASS.
Address the barriers that women and single-parent families face through a fund that supports nonprofit-government partnerships aimed at aligning key services.
Too many women and their families in this country face especially acute barriers to escaping poverty and entering the middle class, many stemming from family caregiving responsibilities as well as gender pay gaps. Almost 5 million college students in the United States are raising children today, and women represent over 70% of that population.
Fifteen million women work in low-wage jobs, making up two-thirds of the low-wage workforce.
Americans receiving means-tested public assistance are disproportionately women, including 85% of adult TANF recipients. Shockingly, over 93% of one-parent families with children receiving public means-tested assistance are headed by women.
To improve these numbers, we need a Women and Families Innovation Fund to support innovative, effective approaches to improve the economic security, educational achievement, health, housing stability, homelessness, early childhood programs, and multigenerational outcomes for women and single-parent families with children under age 18. Overseen by a federal interagency council, the fund would provide competitive grants to projects where innovative nonprofits partner with state and local governments to advance a promising proposal to improve the status quo, with a rigorous evaluation. The council would also have waiver authority, on a limited and tailored basis, to blend or combine federal dollars awarded by any of the participating departments consistent with local plans. The fund should include incentives for applicants to identify state, local, or philanthropic match funding. To support thorough and inclusive planning processes, the fund should provide resources for feasibility and capacity-building to support the development of innovative full proposals.
27. FUND OUTCOMES-BASED PILOTS FOCUSING ON THE SOCIAL DETERMINANTS
Invest in prevention-focused approaches to improve health outcomes, going beyond traditional programming to incorporate a broader range of strategies.
Health policy is an area ripe for substantial Pay for Success investment because of the substantial costs incurred by government, the connection of health to a wide range of other public policy areas (including housing, nutrition, and infrastructure), and the growing view among experts that a comprehensive preventive approach is needed. Experts point to the need to address the conditions in which people are born, grow, live, work, and age that shape health, also known as the “social determinants of health,” in order to reduce long-standing income disparities in health outcomes.
By using outcomes-based payment contracts, unlocking administrative data to build evidence, properly valuing outcomes, engaging a diverse cohort of funders, and potentially deploying Pay for Success financing where useful to fund the right interventions at the right time, the Pay for Success field holds promise. Outcomes-based pilot programs through major health funding streams like Medicaid, and other workforce, child care, and anti-poverty programs, would enable communities to build financially sustainable and holistic preventive approaches that make families measurably healthier.
In particular, Pay for Success housing projects in Massachusetts, Colorado, Utah, and California, in partnership with Coalition members such as the Corporation for Supportive Housing and Enterprise Community Partners, show increasingly encouraging initial results for the homeless individuals they serve. Enabling Medicaid to make outcomes-based success payments directly to states, cities, and counties for avoided costs associated with emergency hospitalizations for this population could allow this increasingly proven approach to scale. With unsheltered homelessness a growing crisis in our cities, this innovation could help tens of thousands of our most desperate neighbors put a roof over their heads, which the data repeatedly show is the single best way to enable them to get their lives on track.
Finally, enabling Medicaid pass-throughs and Managed Care Organizations to keep a greater share of the savings generated by prevention, with careful safeguards to prevent any cutbacks in service delivery, could help make the benefits of prevention less diffuse, and create a new set of stronger incentives to seed a new wave of more outcomes-driven prevention initiatives.
As a nation, we have missed an opportunity to invest directly in the initiative and strength of low-income families working toward economic mobility. A big part of this problem is the dual systems we have for people of privilege and people without financial means. Safety nets and training and education programs that don’t lead to living-wage jobs won’t lead to an equitable system. An inclusive workforce development system includes bridge-building jobs, removes barriers faced by returning citizens, and reenvisions the workforce development ecosystem. Across the board, we need to develop ways to invest in the expertise of the people most proximate to the problems we hope to solve. That means building a system that respects the goals of the people looking to improve their lives, simplifies access to the services they may want, connects individuals to learning and jobs with potential, and removes the biases that keep whole categories of people from following their dreams. And it means recognizing that housing, health, transportation, education, and other factors that affect family economic security and well-being are deeply interconnected. Place-based approaches have the potential to build out the infrastructure necessary to improve outcomes given these interrelated challenges.