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Don't give up: poverty programs that work; selling salsa, banking in the ghetto, and 11 other strategies for helping the poor.

Don't Give Up: Poverty Programs That Work

Selling salsa, banking in the ghetto, and 11 other strategies for helping the poor

Here come those acronyms again, you may be thinking, JTPA, CETA, and all the rest. There's reason to be skeptical when anyone starts up about poverty programs that work. Let's face it--most don't.

Historically, the poverty programs that have worked best have gone by different names, like good schools, a strong labor movement, and Social Security. Good schools are always good poverty programs, but they've become increasingly rare over the past 20 years. Membership in a labor union can still offer a ticket out of poverty, but those high-paying jobs that require little education are getting as rare as good public schools. And by enforcing restrictive work and membership rules, most unions seem more interested in their own than in reaching out to their poor nonmembers.

Of course the story of much of American history is the story of the best poverty program of all: economic growth. A strong economy remains an essential antipoverty weapon. But economic growth won't do the job alone, particularly for the mostly black underclass, whose rise in the past 20 years has presented a more intractable form of American poverty. The gulf between middle-class society, black or white, and the black underclass extends beyond economics, to values, aspirations, and behavior. It is measured in record numbers of pregnant teens, female-headed families, drug addiction, and violence, a collective social disintegration that did not exist in the ghettos of earlier generations and that responds much less readily to economic opportunity.

The programs below offer some unusual suggestions for the poor, from selling salsa to sneaking people into suburbs. Some of the ideas are addressed toward the problems of the black underclass, while others offer solutions more workable for less severe forms of disadvantage. They've been chosen by people trained to cast a skeptical eye on poverty promises, and their success is of a modest variety--experimental, limited, and local. In some instances, their success may consist only of failing less stupendously than similar efforts elsewhere.

While triumphs of this kind might not be ones we can savor, neither are they ones we can ignore. In considering them, it's important to think beyond the programs to the principles that work.

Among the ones we've spotted:

The 20 Minute Bus Ride Test. Most poverty programs can't help everyone, and even the best ones usually can't help people with no desire to help themselves. Jobs for Youth, a Chicago program that places about a thousand poor black teenagers in summer jobs each year has found a way to make sure its efforts reach the people who can benefit: applicants have to be willing to come to the business district to sign up. It's an appropriately modest challenge. Ghetto kids don't have to be rocket scientists to catch a bus downtown. But they do have to have at least the minimal motivation that makes their prospects of success feasible.

The Money Back Guarantee. Most underclass kids grow up with the idea that the only thing guaranteed is failure, a belief held so deeply that it mocks all effort. When technology tycoon Gene Lang blurted out a promise to send the kids in his old Harlem grammar school to college, he found a way to reverse the psychology of defeat: offer a sure thing. If the kids did their part, they'd be rewarded. He proved his sincerity by staying in touch with the kids, bringing them to his office and to shows in New York. The certainty of his promise unlocked a torrent of dormant ambition.

For most middle-class kids, the idea that hard work leads to reward is taken at face value. (Its truth in generations of practice is probably the thing that has most distinguished America from other societies.) But for the underclass kids, surrounded by generations of dependency and defeat, The Money Back Guarantee proved revolutionary.

After an interlude of shoulder-shrugging disillusion, the country seems ready to begin confronting the problems of the poor again. The problems we face, particularly those of the black underclass, are rooted in several centuries of American experience. (That's why, of course, it's so important to keep fighting racial and sexual discrimination.) They won't dissolve with a Jobs Club here and a training program there. But the Jobs Clubs and the training programs and the computerized literacy plans and the small business incubators and the preschool programs and the community colleges that we describe do make differences in individual lives.

For all the plentiful despair of the ghetto, the number of people willing to sign up at training centers and adult education courses across the country shows a persistence of desire. Even the drug and prostitution trades that flourish in the ghetto show a pool of organizational--even entrepreneurial--talent waiting to be tapped. A final poverty principle: Don't give up.

Give the 20-Minute Bus Ride Test

The idea behind Jobs for Youth/Chicago is extremely, almost off-puttingly, simple: it finds private-sector jobs for kids from poor families. The kids must be between the ages of 16 and 21, and their families' incomes must fall below the poverty line; practically speaking, this means that most of them come from welfare families in Chicago's black ghetto, which is the biggest in the country. Jobs for Youth, which is ten years old and funded mostly by the Labor Department (there are two loosely affiliated, and older, offices in New York and Boston), places about a thousand kids a year in jobs, and more than 90 percent hold on to them for at least three months. If they stay on the job for six months, Jobs for Youth will help them get a better job--having an employment history is the key to getting a job with a future. Fighting poverty is supposed to be more complicated than this.

The first reason Jobs for Youth works is that its participants are self-selected. Most of them have heard of the program through word of mouth, and all of them have to be motivated enough to come to the Loop and sign up. It's easier to find jobs for people who have made a commitment to getting jobs.

Second, Jobs for Youth puts its participants through a three-week pre-employment training workshop (usually taught by a volunteer who works in business) before sending them to real employers. One of the great lessons of the past 20 years about jobs programs for poor teenagers is that they work much better if there's a buffer zone between the streets and the workplace. Job training is really a short course in acculturation for people who, first of all, are not at life's zenith of self-discipline simply by virtue of being adolescents, and, second, being from welfare families, haven't spent their lives around people who work; the course at Jobs for Youth heavily emphasizes punctuality (the kids even have to punch a time clock when they arrive at the office) and grooming, in addition to explaining how to deal with employers.

Third, in Chicago (as in most big cities), the private job market, while it may be bad for steelworkers, is quite good for unskilled teenagers. Employers, on the one hand, badly need entry-level employees, but on the other hand are often automatically suspicious of black teenagers, especially boys. Having proved to employers over the years that its kids do well at work, Jobs for Youth in effect provides its graduates with a passport to the larger economy--it says to employers, you can feel confident that the people from our program are honest and reliable, and knowing this helps get employers over whatever racial barriers may exist in their minds.

You often hear that many ghetto kids don't get jobs because the jobs are too far away, and because, if all that's available is flipping burgers at McDonald's for the minimum wage, what's the use? The experience of Jobs for Youth shows that, in Chicago at least, there are jobs within reasonable commuting distance of the ghettos (especially in the Loop and at O'Hare Airport), and that there is more to the world of entry-level employment than fast food. Over the past nine months, Jobs for Youth has placed only 30 kids in fast-food jobs--the bigger categories are messengers in law firms and brokerage houses, baggage handlers at the airport, and clerks in banks, and all of these start at above the minimum wage. Even fast-food jobs are appealing to kids if it looks like they'll lead to something better, which is an idea Jobs for Youth stresses heavily and can prove through its own participants' experience. Jobs for Youth also has a six-month program preparing dropouts for the high-school equivalency exam, and this can lead to college and eventually to a profession.

In the job-training business, there is a constant temptation (created in part by the hostility of labor unions to efforts to get real jobs for poor kids) to fall into a gauzy romanticism. As a result, much effort has been wasted on creating non-jobs "in the community" (this was CETA's problem--I once visited a CETA program in a housing project where the job being created was "watching cars") and on Teddy Roosevelt-style character-building exercises in which kids are taught how to rock-climb or play tennis instead of how to fill out forms. Fostering group spirit is effective but not as an end in itself. In jobs programs it works only in conjunction with getting poor kids out of the ghetto and into real jobs and providing them with whatever instruction and emotional and practical support they need to make that considerable leap.

Borrow the Businessmen

For the past two years, Career Beginnings has served more than five thousand young people in 22 U.S. cities. Who are they? We call them "tenacious" youth. Their "tenacity" has overcome poverty (75 percent are officially poor), lousy urban schools (all are from cities over 100,000), and race (65 percent are black, 18 percent Hispanic, 8 percent Asian). They are neither in the top 20 percent nor the lowest 20 percent of their class. These "middle" young people, by and large, get overlooked.

The program is run from the campuses of 25 different colleges, ranging from Columbia to Rancho Santiago College in Orange County, California. A modest bit of self-selection occurs: interested students apply within their high schools, which refer the most appropriate applicants to the nearby college.

The program begins midway through the students' junior year and continues for two years. Career Beginnings provides remedial education when needed, and most often it is--students average two grades behind in math and reading. It offers college and career preparation and a quality summer job (often through the Job Training Partnership Act and sometimes through local business groups).

Part of its secret is the group support it provides. The disadvantaged kids in the program bond as a class. They receive newsletters and design their own program T-shirts. They feel singled out and special, many for the first time in their lives.

But most important, the program offers each youngster a personal mentor, usually recruited through the local business or college community. At the University of Minnesota, mentors include Minneapolis Mayor Don Fraser. The one-on-one relationship is crucial. Mentors meet with students at least once a month and stay in touch in between. They discuss work and working, assist with college applications, and help students prepare for life after high school. The best mentors act as guides, counselors, teachers, and adjunct family--not simply role models but real friends to one young person.

How well does it work? In our first class of 2,300, more than 95 percent graduated from high school and completed Career Beginnings, and more than 60 percent enrolled in college. In a recent survey 95 percent were still enrolled in college. Our best estimates suggest that similar students not in the program would enroll in college at a rate closer to one in three, while Career Beginnings students enroll at a rate of nearly two in three.

The program began in the spring of 1986 in 24 colleges, with support from a consortium of foundations. It is managed by the Center for Human Resources at Brandeis University.

What's more, it's cheap. Not including summer wages, the average cost of the two-year program is just $1,500 per student.

Give Them a Guarantee

How hollow these platitudes must sound, thought Eugene Lang as he looked down from the podium of his old east Harlem grammar school at the 61 black and Hispanic sixth graders listening to his graduation address in 1981. You need to have a dream, he exhorted. You must go to college to achieve it. Fat chance, they must be thinking. After all, in this neighborhood around three-quarters of the students don't graduate from high school, and almost no one goes to college.

You can go, he told them; and on the spur of the moment the millionaire technology entrepreneur made them a promise that hadn't even entered his mind when he first walked on the stage. Finish high school, he said; get into college, and I promise I'll give you scholarships. After a moment of stunned silence, pandemonium erupted, with bewildered mothers calling out in Spanish from the back of the auditorium: What did he say?

Now, seven years later, almost three-quarters of the students have gotten their high school diplomas, and Lang expects that ultimately 90 percent will graduate. More than half the kids are now college freshmen, and a third of those undergrads are in private institutions--including Barnard, Rensselaer Polytech, and Swarthmore. By September, two-thirds will be enrolled. When the last of the students walks up to get his diploma, probably in 1992, Lang will have spent more than $200,000 keeping his promise--around $350 per kid, per year. This isn't a huge expenditure. But money wasn't what primarily worked this success.

The story of Lang's gift has been told often, but the lesson it illustrates can't be stressed enough. He provided students and their families with a guarantee that if they did the right thing, they would be rewarded for it. That certainty--that hard work would pay off--may seem a precept of middle class life, but it was radically new to ghetto kids who mature with the expectation of failure.

Lang's object was to restore these children to full membership in the larger community and the larger culture. "It's important that they grow up to recognize that they are not perpetuating the life of the pariah," he says, "but that the resources of the total community are legitimately theirs to take advantage of and contribute to and be a part of." Lang took them to restaurants, the opera, the theater. He hired a full-time social worker to watch over them, to help them sort out problems with school, to keep them together as a group that gave them all a feeling of being special.

He restored them to membership in the larger community--both by showing them that what society offers could be theirs, too, and by encouraging them to let the larger community's standards take hold. He didn't do this by overt preaching. "By letting my own life speak the way it speaks, it does have a good quality of persuasion," he says. He had them visit his midtown Manhattan office on Saturdays to talk to them about what you have to do to win success like his.

The lesson took. After a men's clothing manufacturer offered to donate four suits to Lang's program as prizes to the most outstanding boys, the four winners arrived at a meeting of all the kids in the suits they had chosen. "I looked for the bright colors, the signs of youth," Lang says, "and here these four boys came in, each wearing blue or charcoal pinstripes, as though they were walking out of the training program at Morgan Stanley. I can't tell you how good I felt, because one could see what had happened inside these youngsters." While "gray flannel" was once a handy catch phrase for anyone who wanted to denounce "conformity," it was anything but that for these kids. They were rejecting a culture of defeat and embracing a world of new opportunity.

Lang's graduates show how much can be accomplished with underclass kids even starting as relatively late as junior high school. They show too how money alone can't provide what underclass kids need, since their disadvantage is at least as much cultural as it is economic. Lang taught these kids that there really is an American dream worth having and that it really can be theirs if they work for it. The kids can take it from there.

Be a Nudge

When Gloria Bestwick enrolled in the San Francisco Renaissance business machine technician training, she was determined to build a career. At 28, she was on AFDC with no job in the past year and no history of steady work. But even after completing the 14-week training, her search for a job was difficult. At Xerox, which actively seeks minority women as technicians, she failed the qualifying exam. At Bell and Howell, another strong affirmative action employer, she needed a car that she did not have. At four other office machine companies, she was passed over for other technicians who had at least two years of experience.

After these disappointments, she kept going to job interviews, pushed on by Don Green, the director of Renaissance's vocational training. Green continued to arrange interviews, even driving her himself. He followed up with calls to the employers. Finally, after 12 applications, she landed a part-time job with Kennedy Business Machines. The next year, she moved into a full-time position.

Bestwick's job search shows what makes Don Green and Renaissance effective. Green, 35, has been director of Renaissance's vocational training since 1982, coming to Renaissance after a frustrating series of jobs in the juvenile justice system ("as a counselor, which means mainly babysitter"). Wanting to teach inner-city youths to be more than simply secretaries, Don has developed classes that teach them to repair microcomputers, office machines, and telecommunications equipment. Over the past five years, his classes have trained hundreds of San Franciscans, and most of the computer stores and office machine repair companies in the Bay area employ at least one graduate.

"By far the most important factor in training is contacts with employers," Green says, and he spends perhaps 30 percent of each week either calling local employers--Xerox, Royal, Savin, Taylor-Made, Computerland--or visiting them to stay on top of who is hiring and what skills they're looking for. Since 1982 he has developed the contacts and credibility that enable him to sell his product: job trainees. "I never forget I'm selling a product, and need to emphasize the customer's needs, rather than the social impact," he says.

Occasionally, the transition is smooth; but more often it is a matter of arranging many interviews, calling employers after interviews ("to show employers that our people really want the jobs"), and offering assistance to employers after placement. "It's important to us to know that we can call Don if the Renaissance graduate begins to come late or screw up," the head of a franchise computer store explains, "though often Don will take the initiative to call us and check on things."

Don also must hustle to keep trainees in class during the 14-week training. One day, someone will want to drop out to take a $4-an-hour job at Church's Fried Chicken; another day someone will be discouraged by the math skills required and decide to leave. Someone else will be threatened with eviction from an apartment, or have a fight with a girlfriend or boyfriend. Don goes to their houses and families, to convince them that it's worth hanging in for three and a half months.

Hundreds of papers are written each year seeking to identify the elements of successful job training. But these elements are not complex--strong ties with employers, a curriculum geared toward demand, motivated students, and most of all a dogged persistence in helping them contact employer after employer in finding work. The bigger challenge is how to attract and retain more persons like Don Green--"Mr. Jobs" as he is known in the Bayview, Mission, and Western Addition.

Forget the Beautician Schools

There is hardly more compelling proof of the desire of lower-income Americans to work than their willingness to participate in the hoax of job-training programs. Unemployed men and women swamp electronics schools, community colleges, vo-tech programs, computer schools, JTPA programs, and lots of other places in the search of the American Dream. There are many fine training programs; often even bad training programs teach some new skills. But the training programs do not work, because they never get wanna-be workers any closer to a J-O-B.

Virtually any study of national trends on job creation lists janitors as the fastest growing job category through 1990. Name one private, state, local, or federal training program that specializes in training men and women to be janitors? We know of none. In New York a janitor will make between $12 and $14 per hour. The same is true in San Francisco, Chicago, and some other markets, usually where the industry is heavily unionized.

The formula for job-training success is simple: connecting real jobs to real unemployed workers. Training programs are much more successful in the delivery of jobs to the trainers than to the trainees. In Little Rock in the early 70s, we would see 300 welfare recipients a year come out of federally funded programs as qualified beauticians in order to supply a market where fewer than 10 new jobs a year were expected. Twenty years ago with welfare rights, we used to say that all welfare recipients needed was more money. The unemployed simply need more jobs.

But we have seen some teasers that hold promise if more widely pursued: >First Source Agreements: In 1985, ACORN (The Association of Community Organizations for Reform Now) was able to convince a number of cities, including Des Moines, Washington, D.C., and Miami, to enact "first-source" agreements. These required employers benefiting from public funds for development projects to hire CETA-eligible unemployed workers before any others and to train them in entry level jobs. >Developer Agreements: ACORN was sometimes able to convince developers to sign first-source agreements promising to hire from the affected communities. The Rouse Corporation in Miami and New Orleans agreed, as did the Marriott Corporation in Atlanta and Columbia, South Carolina. The companies delivered jobs and training, and ACORN delivered the qualified, unemployed workers. Simple but effective.

The best program was the Trammel Crow development in the Little Mexico area of Dallas in the early 80s, when Crow and ACORN negotiated quotas both on construction jobs to build developments and on retail jobs in the stores that followed. Similar agreements in Pittsburgh, Chicago, and elsewhere were as good on paper but failed when the developer failed to secure financing and the project itself did not take off. There, inevitably, lies the risk of hiring agreements with developers.

Let Them Eat Software

Millions of people experience difficulties in finding and holding jobs because they have not mastered the three Rs. An anecdote will illustrate what I mean. A supervisor at a midwestern manufacturing firm directed a young worker to fetch a two-and-a-half-foot piece of copper tubing from the supply room next door. The youngster took 15 minutes to return empty-handed, explaining that he could find only 18-inch and 30-inch tubes. Similar incidents are repeated millions of times every day in the American workplace. According to the Census Bureau, some 20 million adult Americans are functional illiterates. What can we do?

Modern technology has made it possible to offer basic skills instruction efficiently and effectively. An outstanding example is the Comprehensive Competencies Program (CCP) developed under a grant from the Ford Foundation by the nonprofit Remediation and Training Institution. RTI distributes its program through franchises administered by its subsidiary, the United States Basics Skills Investment Corporation.

The program is perhaps best described as a hightech equivalent of the one-room schoolhouse. The computer asks a question: How many inches in three feet? If the student gives the wrong answer, the computer says try again. If wrong answers continue, the computer supplies the information. The lesson takes place in private. Gone are the inhibitions and embarrassments that often drive students from the classroom.

To qualify for a CCP franchise, an organization (a school, say, or government agency) has to submit a plan indicating who is to be served, break down anticipated costs, and outline available funding. The applying organization also has to report periodically on the achievement of enrollees, allowing U.S. Basics to keep stringent quality control. Some 25 thousand persons are enrolled in 270 learning centers located in 38 states, the District of Columbia, and Canada. More than half of the centers are supported by the federal Job Training Partnership Act. Another 20 percent are located in public schools.

At the latest count, at least half of the learners have averaged one grade improved in reading in 22 hours of instruction and 1.4 grades in math in 28 hours of instruction. The cost? Ten dollars per hour of instruction.

It's one of the few certainties in life that increased educational achievement means higher earnings, reduced dependency, a decline in incarceration, and a decline in out-of-wedlock births. Based on such data, RTI estimates that for every dollar spent in a CCP learning center, the taxpayer receives five dollars in benefits. That may be self-promotion, but the program works.

Find a Starry-Eyed Psychologist

When I joined the Carter administration in the summer of 1977, my expectations were modest. The new president had run on a platform that called for putting more welfare recipients to work, but at no new cost to the government. No one in either the Labor Department, where I worked, or the Department of Health, Education and Welfare, took the zero cost requirement very seriously.

But we at Labor saw Carter's welfare reform as a chance to redirect CETA's massive system of public service employment away from being a quick fix for the recession toward playing a more permanent role in helping the chronically unemployed. Our idea was to attack poverty by providing work, rather than welfare. We knew enough about job programs not to make the usual rosy predictions about converting "tax-eaters to taxpayers." We didn't even assume participants would move from our public jobs into private ones any faster, but in the meantime at least they'd be working for their income.

This honesty turned out to be lousy strategy. One reason is that Congress likes to be courted with inflated predictions of welfare dollars saved and lives transformed. But it also turned out that our skepticism was not fully justified.

One of the features of our job program called for an eight-week "waiting period" before a recipient could claim a job. The purpose was to prevent unemployed people who would otherwise find a regular job in a few weeks from using up one of our expensive subsidized jobs instead. The waiting period was very unpopular among the administration's liberal supporters, who regarded it as heartless. (Never mind that waiting didn't make anyone worse off than he currently was without any job program at all.) At least we should give them some help in looking for a job and maybe get them a bit more ready.

I was not thrilled by the idea of allocating scarce money to more of the same old job preparation assistance that had done so little in the past. So I was dubious when my staff brought in a starry-eyed psychologist named Nathan Azrin, who said he had invented something called a "Job Club," which would find unsubsidized jobs for two out of three of our welfare clients in a matter of weeks. Still, we needed something, and the price was right--which is to say cheap.

The next thing I knew the damn things worked. Like gangbusters. Up in Lowell, Massachusetts, where the electronics industry was just starting to boom, Azrin's club was siphoning off 90 percent of participants into stores and factories before our subsidized job placers even got a crack at them. Even in rural Missouri more than three out of five were finding jobs in short order.

I visited one of these miracles to find out how the Job Club did it. One key ingredient was a meticulously trained, highly enthusiastic staff. Another was that welfare clients had to take the initiative in finding the job. In traditional programs, professional manpower specialists would pronounce the client either "job ready," in need of further training or other aid, or a hopeless cause to be returned to the welfare rolls. The Job Club approach left the "job-readiness" decision to the labor market.

Participating in the program was obligatory for many Job Club clients, a feature that many felt was helpful in overcoming long-term shyness about approaching employers. (Although the really tough cases--adults with chronic drug, alcohol, physical, or behavioral problems, of which there are many--didn't come to the program at all.) Most clients were anxious to test the waters.

Job Club trainers, working primarily with small groups, taught their clients to search their pasts and remember experiences that might be salable--a part-time job after school, a school subject or sport done well, success in organizing school or volunteer activities, help provided to neighborhood kids--and to begin feeling self-reliant. Sounds corny but it worked.

An even more striking departure from accepted practice was the Job Club method for finding jobs. In the traditional model, "job-development specialists" typically put in a call to one of the handful of firms they have scored some success with in the past and ask if they can send over a welfare recipient who might work out. The Job Club approach focused instead on teaching clients how to find a job for themselves: how to use a phone book to find likely employers, large and small; how to follow up, and so on. Then participants set to work with a bank of phones--making calls, following up on leads, going out to interviews, coming back and reporting to their fellow job-seekers.

The genius of this approach lies in the fact that sending a job-seeker out with a label reading "hire me I'm on welfare" is a sure turnoff for employers. Studies have shown that it's a turnoff so complete that even bribing employers with tax credits or bounties can rarely overcome it.

No doubt the pilot projects' success rate would have fallen as caseloads grew and job openings grew scarcer. But even at half the rate, the success would have been phenomenal for this clientele. The Reagan administration threw out the pilot projects along with the rest of CETA, but some Job Clubs still exist. Perhaps with the growing interest in rescuing welfare recipients from dependency, the Job Clubs will have a chance to make a more lasting contribution to this effort.

Sell More Salsa

Two sisters in St. Paul, Minnesota, had little income but a valuable asset--a prized family recipe for salsa. But a bank denied their application for a $10,000 loan to go into business. The sisters were referred to the Women's Economic Development Corporation. With WEDCO's help and hard work, the sisters prepared a more realistic plan, returned to the bank, and received a loan nearly twice the size of their original request. Today they are shipping more than a half-million dollars worth of salsa each year.

WEDCO is a nonprofit corporation in St. Paul that assists women entrepreneurs. In the four years since its doors opened, 3,500 women have been helped, 644 new businesses created, and 400 existing businesses have been expanded, at a failure rate below 5 percent. Most striking, 67 percent of the women starting or expanding businesses had incomes below $15,000, and 63 percent were single heads of households.

WEDCO's businesses are diverse but heavily weighted toward retail and craft businesses. They also include a firm that leases space to occupational therapists, a book distributor, a custom upholsterer, a wood carver, and a pest control firm.

WEDCO is the brainchild of four women entrepreneurs convinced that women face special problems if they try to start businesses: a lack of the networks that men could draw on for advice, lower self-esteem, and little respect from bank loan officers. At the same time, the First Bank of Minneapolis realized the advantages of a place to refer loan applicants whose business plans had potential but needed work. Started with bank money and foundation grants, WEDCO today has a staff of ten and operates on a $490,000 annual budget. It covers about one-third of its expenses from earned revenues, which include fees charged to clients and the sale of "how to" workbooks.

WEDCO teaches would-be entrepreneurs every step from marketing and management to finance and self-confidence. It does not attempt to screen winners and losers because too many improbable ideas have proved successful--including a pet modeling agency! Instead, between visits, clients must complete homework assignments. This weeds out those who cannot convert a vague idea into a viable business plan.

WEDCO also offers two last-resort finance programs funded by banks and by foundations. In three years, 110 loans have been advanced, ranging from $350 to $20,000. Of the more than $700,000 loaned, only $10,000 is in default.

Although the secret of WEDCO's success is deceptively simple, it will probably prove extremely hard to clone. WEDCO is run by experienced and hard-working professionals and is directly accountable to its funding sources--private, for-profit banks and foundations. As investors in WEDCO's own loan funds and as board members, the banks weigh the succes of the program more carefully than most state legislatures oversee state agencies. The track record of state and local loan programs that assist small and minority-owned businesses is bad enough to offer pause before rushing to subsidize a local version of WEDCO in the name of helping the poor.

Entrepreneurship is not a way for all able-bodied people to escape welfare. (It's not right for all middle-class people either.) But one displaced worker in eight who has found work over the past decade has done so by creating his own job. WEDCO has proved that entrepreneurship can work for poor women.

Use the Community Colleges

In 1983, unemployment had moved like a blight through Pittsburgh and surrounding Allegheny County. More than 95,000 men and women, or one in seven workers, had lost their jobs--not only steelworkers but also restaurant workers, policemen, janitors, secretaries, clerks, and skilled laborers whose tasks were tied to the health of steel. The sheer breadth of the problem spawned a collective consciousness that led to a remarkable job training effort on the five campuses of the Community College of Allegheny County.

In 1983 and 1984, more than 7,000 unemployed men and women enrolled in the college to train for a range of jobs, with their expenses paid by county, state, and federal governments. It was the largest project of its kind in the United States, and it has since been studied by observers from 37 countries. It was also one of the most successful. In each of the three follow-up surveys the college conducted, the most recent taken in April 1987, almost 80 percent of the participants had found new jobs and remained in them. Of those, 84 percent said their new jobs grew from the college training; only 16 percent said the jobs were similar to the ones they lost.

Each of these men and women had held a job before, but many had been out of work more than two years and had come to view themselves as hardcore unemployed in a region where an opening for a dishwasher at an all-night diner drew more than a dozen applicants. Some stayed a semester; some three years. They emerged as nurses, chefs, landscapers, and gardeners at downtown buildings, computer technicians and programmers, office clerks, and fast-food franchisers, most reflecting the shift to a service economy.

Compared to federal job-training administrators, county officials proved unusually flexible. Participants just needed to be county residents who, as of spring 1983, had been eligible for unemployment compensation within the past 18 months. To enroll, they simply had to apply to the college. By contrast, the federal Job Training Partnership program required more than a dozen kinds of documents, including income stubs going back six months, proof of family size, and other papers that few people have at the ready.

Perhaps most important was the county's decision to vest its effort in a community college. Many of these schools have become de facto vocational training centers, with courses closely keyed to the needs of the local economy. Faculty members, unlike their colleagues at most liberal arts colleges, are accustomed to dealing with the pragmatic concerns of diverse, largely adult student bodies. Another key feature was that the program was run by counselors, not job training "experts." Uncomfortable with the idea of economic forecasting, they resisted the temptation to direct workers into what seemed "hot" careers, such as robotics--in retrospect, a prescient move. Each student chose his or her own direction. Laid-off workers, in interviews, said this choice was an important step toward taking charge of their destiny, after feeling at the mercy of economic forces.

"We were dealing with very disillusioned people and we did not want to make promises we couldn't keep," said Barbara Parees, the college's head of educational services. "When they came in, we said: `We do not have jobs. We are not offering you jobs. We are offering you a chance to become educated.'"

Start a Ghetto Bank

The nation's best jobs program for the poor, in my opinion, is not a jobs program. It is not even a government program. It is a private development bank on Chicago's south side, called the Shorebank Corporation. It consists of a bank, a real estate development, a venture capital fund, and a community development corporation. It occupies neither the public sector nor the private sector, but a "third sector" in between. It is the flagship of a growing movement to apply entrepreneurial methods to our social problems.

The story begins in the late 1960s, when a young Chicago banker named Ron Grzywinski seized upon then-state treasurer Adlai Stevenson III's offer to deposit state funds in banks that loan to minority business people. Grzywinski, who then owned a small bank near the University of Chicago, recruited two black activists and a young woman fresh out of graduate school. With no background in banking, they outshined Chicago's major banks. Their success got them thinking about the potential impact an aggressive bank could have on a black ghetto. Grzywinski took a leave of absence, raised $800,000 from foundations and philanthropists, borrowed $2.4 million more, and bought South Shore Bank.

As they groped for a successful strategy to turn South Shore around, it became clear that the key was rehabilitating the apartment buildings that housed 70 percent of the neighborhood's 80,000 people. When buildings are abandoned in a neighborhood like South Shore--as they were in rising numbers throughout the 70s--the empty hulks become targets for arson and hangouts for junkies. Crime skyrockets and law-abiding residents flee. Black neighborhoods all over Chicago's south side have been depopulated in precisely this way.

South Shore Bank set out to reverse the downward spiral by doing what no other financial institution in Chicago would do: giving mortgages on ghetto apartment buildings. By 1987 it had made more than $35 million in mortgage and rehab loans on more than 200 buildings--close to a quarter of all apartment buildings in South Shore. The impact was dramatic. There are still some pockets of decay, but, driving the tree-lined streets, one also sees elegant courtyard buildings that would fit well into the tonier north side neighborhoods.

Meanwhile, Shorebank's community development corporation has trained hundreds of residents for jobs, provided remedial education, created a small-business incubator to help new firms survive, and created a program to help neighborhood women (including welfare recipients) go into business for themselves. Shorebank's real estate firm recently broke ground on an eight-acre shopping center. In the process, thousands of people have found work. But more important, the community fabric now reinforces the work ethic.

This is one key to Shorebank's success: rather than attacking only one of the community's problems, it has attacked on a broad front. Shorebank's other secret is that it does not spend money, it invests. The typical government program, no matter how well intentioned, provides money or services to poor people simply because they are deserving. In contrast, Shorebank invests in people because it believes that they can succeed in the marketplace. If someone does not have that capacity--whether they want to start a business, buy a building, or simply get job training--Shorebank will not invest.

This is not a strategy that will work in every inner-city neighborhood. Some of our ghettos are too far gone. Nor is it an argument for expecting business to solve our social problems. There is simply not enough easy profit available in a community like South Shore for a traditional bank or developer. There must be some subsidy and there must be a commitment to more than the bottom line.

This is where government might come in--to provide some of this capital and inspire some of the talent. John Kennedy inspired a generation to enlist in the Peace Corps, VISTA, and the War on Poverty. The next president could do the same with an antipoverty strategy built on the third-sector model.

Peel the Bumperstickers

One terrific antipoverty program I've encountered employs no teachers, counselors, or job-skill instructors. It doesn't perform miracles--like luring dropouts back to school, or helping to instill self-esteem, or training an ex-addict for the world of work. It isn't located in an inner-city slum. In fact, my favorite antipoverty effort--the Manpower Development Research Corporation--doesn't run poverty programs. It analyzes them.

Located on Manhattan's Park Avenue, the non-profit, Ford Foundation-inspired MDRC specializes in information. No university, no government, has done more extensive studies of subsidized employment programs, of teen parenting efforts, or of workfare and welfare reforms. When the federal government shifted away from the hard-core underclass, MDRC entered into contracts with state and local governments and organizations to evaluate poverty programs.

The lessons their work imparts throb with the need to avoid the bumper-sticker cures for poverty. We are not dealing with one homogenized group of people whom we can label poor and for whom we can prescribe a single medicine. There are no elixirs, whether they come in the form of conservative bumper stickers that shout individual responsibility, or liberal bumper stickers that shout only government responsibility. Needed is a synthesis.

MDRC's twin approach to research couples hard numbers with very human case studies. The hard numbers guard against misleading anecdotal evidence. But the case studies guard against the sweeping generalizations of purely statistical approaches. Individuals in poverty have an assortment of problems that extend beyond mere lack of income and can include lack of literacy, self-confidence, and emotional support. We need to distinguish between the underclass and those who are only temporarily poor, between those with behavioral as opposed to just income woes. The naunced approach of MDRC's research suggests the need for more customized antipoverty programs.

Of equal import, MDRC's respected analysis might unlock the secret to capturing the support of the American people. The public might gain confidence from the many success stories of the temporary poor that are often dwarfed by the more common failures of the more recalcitrant underclass. Perhaps they would gain new insight into how painfully difficult it sometimes is to reach the underclass. If we treat voters as if they have a consumer right to know what they're getting for their money, perhaps they will return the compliment in the form of greater patience and understanding.

Airlift 'Em Out

There are certain liberal ideas that we've all taught ourselves to believe can't possibly work, and one of these is the idea of government agencies moving poor black families from the inner-city ghettos to the mostly white suburbs, where the schools are better, the streets safer, and, these days, the jobs more plentiful. Just mentioning it brings visions of rocks thrown through windows and kids tormented by their classmates. But there is such a program in Chicago, and it has moved 3,500 families from ghetto public housing projects into suburbs since 1976, with considerable success. It is so popular that it gets 2,000 applicants in an annual one-day signup period. Relatively few of the families moved have experienced harassment, many who were unemployed in the city have found jobs in the suburbs, and in surveys the overwhelming majority say they are much happier with their kids' schools now than they were in the city.

The program was begun in 1976 by the Leadership Council for Metropolitan Open Communities, an organization founded (as part of a 1966 peace treaty between Martin Luther King and Mayor Richard Daley) to promote residential desegregation. The Gautreaux Program is named for a woman who sued the Chicago Housing Authority for operating segregated housing and won; the Leadership Council runs it as part of the settlement between the CHA and the plaintiffs. Only residents of segregated housing projects in Chicago (most of the housing projects in Chicago are segregated) are eligible for the program. The Leadership Council places them in other housing, mostly in the suburbs, and gets them HUD Section 8 rent subsidies to pay for it.

In Chicago, as elsewhere, there is a certain amount of resident pride to be found in every housing project. Even the infamous Cabrini-Green has residents who are ardently trying to keep it from being torn down the way the even more infamous Pruitt-Igoe was in St. Louis in the seventies. But the truth is that most people in housing projects desperately want to get out. In particular, the out-of-control gang crime makes them want to leave; in general, the poor inner-city neighborhoods where most housing projects are located have long since ceased functioning as real communities in the sense of being able to provide their residents with education, employment, and an institutional life. The way to move up in the ghetto is to move out of it.

One reason the Gautreaux Program works is that it's an unabashed practitioner of "creaming," which means helping only the most motivated and most together people. Creaming is politically incorrect, but it works. As a voluntary program, Gautreaux gets a self-selected group of applicants who are on the average better educated and more likely to be employed than most residents of housing projects. In choosing among the applicants, the program engages in practices that used to be part of the standard operating procedure of public housing projects but were dropped in most places in the sixties for being, again, politically incorrect: as the brochure for applicants says, "Only families with acceptable housekeeping habits, credit, rental, family and personal histories and those with the minimum resources for moving will be referred." Gautreaux even uses such appurtenances of the much-reviled "social worker mentality" as home visits. It takes extraordinary strength for a poor black single mother to move her kids into a middle-class white neighborhood far away from anyone she knows, where they will have to endure, if not racial taunts, at least a lot of funny looks.

On the suburban end, the program firmly lines up the cooperation of private landlords in advance, and, most important, it operates in quasi-secrecy. The landlords and the families moving out from the projects are under strict instructions not to tell anybody how they got there--they are just the new folks who happened to move into the apartment house, not people from subsidized housing projects in Chicago.

Aw, Never Mind

What you have generously offered me is a chance to say that while I think most of the programs failed, I'm not a fanatic, and to prove it, here are some successes. And I can't do it, because I cannot think of a single large program, state or federal, that I consider to be a meaningful success. I can think of some statistical successes, as in "the results of the regression analysis indicate a difference in annual earnings between the experimental and control group significant beyond the .01 level." But what I have in mind when I think of success (and you, too, I bet) goes something like this: "Ten years ago, we had a big jobs program. Last year we tracked down a couple of hundred kids who were in the program to see how they were doing, and it was really heartening. A lot of the kids have regular jobs, they're raising families, they're doing pretty well--not all of them, but a lot. Not nearly as many of the kids we couldn't take into the program are doing as well."

To my knowledge, no jobs program can meet that standard. Let me broaden that: not a single federal program to employ the chronically unemployed, rehabilitate juvenile delinquents, keep students from dropping out of school, make welfare mothers independent, or get drug addicts off drugs can demonstrate success in the kinds of terms I have just stated. What happens instead is that the hints of success that can be found in small demonstration programs are used to raise doomed hopes that the same results can be produced on a national scale. Let me give you two examples.

The first example is the highly publicized Perry Preschool Program for poor black preschoolers. It showed substantial results--it was a meaningful success. The theme of the publicity attending the program has been: Here's what can be done with preschoolers; therefore Head Start can make (or can be altered so that it makes) major inroads in the problems of disadvantaged youths. But that's not what the lesson of Perry Preschool really is. Some reasons:

It was a tiny program, consisting of 58 youngsters and a control group of 65 who weren't in the program. The student-faculty ratio was never greater than 6-to-1. The teachers were hand-picked, highly skilled, and motivated. They received extra training in the special curriculum adopted just for the program. In addition to classes, the program boasted an hour-and-a-half home visit to each mother each week. And on and on.

So now we want to say, "Let's make Head Start like Perry Preschool." How? I'm not talking about money; assume enough money. (Like the economist stuck at the bottom of the pit in the joke: First, we assume a ladder.) You've been around bureaucrats and program implementation for a long time. Do you seriously think you can implement anything remotely approaching that little jewel for a few million kids?

Was Perry Preschool a success? Yes. Can we take advantage of it on a national scale? The temptation to say yes is overwhelming; I am arguing that it is an illusion. The unfailing ability of large-scale federal programs to shoot themselves in the foot will mean that Head Start, as currently implemented, is about as good as we'll ever get, and that's not good enough.

Let me take Job Corps as the second example and try to make a different type of point. As you know, the quality of Jobs Corps centers has been all over the lot. Some have been embarrassments, some impressive. But we do know a fair amount about what makes a good Job Corps center. Those with the best records have a demanding work load, strict rules, and enforcement. (That is, they're run the way that public schools are supposed to be run.) Now: It's next January, Dukakis is president, and miraculously several billion dollars have been found for job training programs. He makes you the Job Corps Czar. Miraculously, you overcome all the difficulties of making all the new Job Corps centers conform to the best models. There remains a catch: the best Job Corps programs know how to train youths ready to accept the discipline and do the work. No program, not even the best of the best, knows how to train youths who come to them without these assets. And it is precisely youths without those assets who make up the underclass.

I see in the resurgence of optimism about jobs and training programs ("This time we'll do it right") a mismatch between what the underclass is and what people want it to be and a mismatch between the way that large-scale programs actually are implemented and the way each new generation of reformers thinks it can implement them. And I fear a backlash when these renewed expectations are disappointed.

Let's face it: I am an oddball on these issues. But I appreciate the way you keep giving me a chance to be reasonable.

PHOTO : New York City owned building--Williamsburg, Brooklyn.

PHOTO : Housing project--Harlem, New York.
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Author:Murray, Charles
Publication:Washington Monthly
Date:Jun 1, 1988
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