United States
The United States, comprised of 50 states (and the district of Columbia) has a vast array of different welfare to work programmes operating at the federal, state, county and city level. While there have been two changes of administration since 2010, and large-scale government spending through the Coronavirus Aid, Relief, and Economic Security (CARES) Act under President Trump and the Bipartisan Infrastructure Bill under President Biden, this period has also seen the continuation of welfare to work programmes and labour standards laws which have been in place since the mid to late 20th century.
Federally administered work programmes
In 2014, the Workforce Investment and Opportunity Act (WIOA) aimed to streamline workforce development policies, striving to create a single point of access for all groups requiring employment support services, regardless of the funding stream they come under (such as Temporary Assistance for Needy Families - TANF, Supplemental Nutrition Assistance Program - SNAP, and others). A key feature of the US workforce development model is its dual customer approach, addressing the needs of both job seekers and employers. This approach distinctly focuses on the regional and local priorities of employers, as illustrated by the governance structures mandated by federal law.
In particular, State Workforce Development Boards (SWDB, PDF), the body responsible for labour market policy at the state level, evidently favours business representatives at the expense of trade union representation. State workforce development policies are thus inclined towards prioritising employers' preferences – if they can be aggregated – above and beyond other interest groups, primarily trade unions but also community organisations.
In addition to WIOA workforce development schemes, two prominent welfare-to-work programmes stand out within the scope of the Activating Employers project: TANF and SNAP (Supplemental Nutrition Assistance Program). Let's begin with TANF.
Introduced in 1997, TANF replaced Aid to Families with Dependent Children (AFDC), granting states the flexibility to allocate a diminishing block grant as they saw fit, theoretically with minimal restrictions, as long as they successfully reduced the number of families receiving cash assistance. Adult recipients are typically obligated to engage in work or work-related activities as a condition for receiving cash assistance. The responsibility for delivering TANF payments lies with the states.
In most states, there are dedicated offices serving specific indigenous populations, operating within the framework of state government but independently. States also have the power to define what counts as “work”, resulting in work requirements differing from state to state. As of 2022 TANF provided approximately $16.5 billion to U.S. states and administered territories. Among other goals, TANF aims to (end) “dependence of needy parents on government benefits by promoting job preparation, work, and marriage”. TANF cases dropped from over 5.1 million families in ’94 to 1 million in 2022. TANF payments are increasingly being used by states to supplement in-work earnings for low-income families.
TANF now plays an exceedingly marginal role in the UK safety net, gradually supplanted by the Supplemental Nutrition Assistance Programme (SNAP).
Previously known as the Food Stamp Programme, SNAP was reorganised under the 2008 Food and Nutrition Act. In contrast to TANF, eligibility for the programme is consistent across the entire country. To receive benefits in the form of credit loaded onto Electronic Benefit Transfer (EBT) cards, usable for purchasing eligible food items at authorised retailers, most recipients must fulfil work requirements.
As of June 2023, the national average of monthly payments was $339 per household. Under SNAP’s “general requirements”, individuals aged 16-59 must register for work, participate in a training programme if offered a place, take a suitable job if offered, and not voluntarily quit or reduce hours below 30 per week without good reason. Those classified as “abled bodied” individuals without dependents (ABAWDs) have stricter eligibility criteria of 80 hours a month of work activity, i.e. a minimum requirement of 20 hours a month. Work requirements for ABAWDs are stricter than general requirements for two main reasons. First, ABAWDs face a time-limited benefit period. If they do not meet the 80-hour per month requirement within three months (consecutive or in-consecutive), they lose their SNAP benefits for the rest of a three-year period unless they can document that they meet these work requirements. This time limit imposes a more immediate pressure on ABAWDs, as failing to meet the requirements quickly results in the loss of benefits. Second, unlike other work requirements that might allow job search activities to count towards fulfilling work-related conditions, the ABAWD work requirement uniquely does not count job search as a valid work effort. This limitation means that ABAWDs must engage in actual work or training programs, narrowing the scope of activities that satisfy the requirement. Recent research has found that these more stringent work requirement reduce participation in the SNAP programme, but do not increase rates of those finding employment.
Procurement spending
The US government has long used government contracting at the federal, state and local level to ensure a minimum labour standard on public work. Most notably, the Davis-Bacon Act, requires contractors and subcontractors working on federally funded construction projects worth $2,000 to pay their labourers and mechanics "prevailing wages" (wages determined by the average wage of non-public contracted employees in a similar sector in the same locality) and benefits. States can go beyond federally mandated clauses.
For example, California law stipulates that prevailing wage and health and pension benefits, must be paid on any state government contract over $1,000 (half of Davis-Bacon requirements). State and city level commissioners can also promote the adoption of community workforce agreements, which can guarantee a percentage of project hires be from the local community and/or traditionally deprived groups.
Similar guarantees to the Davis-Bacon Act also apply to service work. The Mc Namara-O'Hara Service Contract Act provides that contractors and subcontractors providing services on prime contracts exceeding $ 2,500 provide prevailing ‘local’ wages to workers employed on said contracts.
In instances where state legislation has nullified prevailing wage rules, state and local governments have resorted to Responsible Bidder Ordinance tools. These ordinances specify responsible craftsmanship practices as a means to safeguard taxpayer money. In practice, this approach subtly introduces fair work principles through an alternative route.
Research from the Activating Employers project has identified Community Benefit Agreements (CBAs) as one distinctive features of the US approach to including social value in public contracts. CBAs are contracts negotiated between developers or project proponents and community groups, often in collaboration with local governments or other stakeholders.
They are designed to ensure that large developments, which may be partly funded by taxpayer money, provide indirect benefits to the local community through designated local hires in economically deprived areas and the building of infrastructure/facilities for local communities.
Perhaps most significantly the Infrastructure Investment and Jobs Act (also known as the Bipartisan Infrastructure Deal - BID) passed in 2021 has allocated over $1 trillion of spending on projects, including transportation, the transition to green energy and hi-speed internet delivery. The Act itself provides great scope for job creation through the sheer size of investment being made. However, the BID has been introduced in parallel with the Biden administrations Good Jobs Initiative (GJI). An initiative run by the Department of Labor, the GJI aims to improve access to good jobs for underserved communities by raising awareness of employee rights and engaging with employers to improve job quality and pathways to good jobs.
Large scale federal investment projects provide a once in a generation opportunity to train or up-skill workers into jobs which provide secure work, good pay and in-work progression. The United States is an example of a fragmented employment service delivery system, but one which is highly flexible and is putting increasing focus on employer engagement to improve job prospects for deprived communities and disadvantaged groups.
The Activating Employers project aims to undertake a granular examination of progressive employment policies which are taking place at the state and local levels; to find which practices can provide significant social benefits.