CALIFORNIA IN WELFARE BIND FOR LACK OF JOBS.

Byline: Alec R. Levenson and Elaine Reardon

THE other shoe is about to drop. On Wednesday, California will fail to meet the first deadline for welfare reform.

It was recently reported that California will have moved only 20 percent of its two-parent caseloads into the work force instead of the 75 percent required by federal law. The state stands to lose $185 million in federal block grant money because of this failure.

This is indeed an ominous start to welfare reform. In all likelihood, two-parent families are easier to move into the work force, as one parent can care for the children while the other works.

The situation is only going to get worse from here on out. The state may even have difficulty meeting the Wednesday requirement that 25 percent of all welfare families move into the work force, despite the recent economic growth.

In the coming years, California is supposed to move 50 percent of all families off welfare. Where are these jobs going to come from? We estimate that welfare reform should add over 250,000 women to the work force in Los Angeles County alone. The county would have to create 28 percent more low-skill jobs just to absorb these would-be workers. That much job creation would take an economic miracle, with a huge increase in demand for janitors, cashiers and restaurant workers.

Our estimates show that only 39 percent of welfare recipients in Los Angeles County will find full-time jobs. Los Angeles plays a major role in the state's inability to meet the federal job placement requirements: accounting for 1 out of 3 welfare recipients statewide, as goes Los Angeles, so goes California.

One national estimate is that 40 percent of the drop in welfare caseloads to date is due to economic growth. But the welfare recipients who left the roles first were the easiest to employ because they had the highest skills. Nationally, two-thirds of recipients cannot do such simple tasks as writing a letter explaining an error on a credit card bill, using a bus schedule, or using a calculator to determine a 10 percent discount.

In cities like Los Angeles it is even worse, with 4 out of 5 AFDC recipients having such low skills. The labor market will prove incapable of absorbing the large number of low-skill workers with or without new immigrants.

The $3 billion federal allocation - recently announced by Vice President Gore to help the ``hard core'' welfare mothers find jobs - will have little impact on their employability if it is not spent to address the skills gap between what the welfare recipients have to offer and what employers want.

What's worse, California's share of that allocation - $189 million for this fiscal year - could be entirely wiped out by the $185 million penalty for failing to meet the two-parent family work requirements.

But even if enough low-skill jobs are created to avoid the penalty, workfare alone will not yield self-sufficiency. Low-skill jobs don't pay enough to enable welfare recipients to lift their families out of poverty. The 80 percent of Los Angeles' welfare recipients with poor basic skills will not earn enough to raise their families above the poverty line, even if they find full-time jobs, even after getting a federal subsidy through the Earned Income Tax Credit.

And while Los Angeles accounts for one-third of California's welfare recipients, the job prospects for recipients throughout the state are not much better. Workfare alone doesn't mean good jobs.

Even if workfare succeeds temporarily in lowering the welfare roles during the 1990s by forcing people off public assistance, it will not succeed in moving families to self-sufficiency. The incredibly low skills of welfare mothers make the success of time-limited welfare reform highly unlikely. The money needed to raise their skills high enough to ensure self-sufficiency is more than we can afford, even if we knew how to spend it properly, which we do not.

The children of the working poor deserve more than the short shrift we have given them over the past two decades. The best way to support these children while maintaining the incentives for work is to vastly expand the Earned Income Tax Credit for their parents, and work to improve schools so that students graduate with the needed basic skills.