An increase in the Public Assistance grant is long overdue and is desperately needed to alleviate the extreme financial distress of New York State’s 950,000 public assistance recipients, the majority of whom are children. Welfare shelter allowances have been frozen since 1988 and welfare basic allowances since 1990. Welfare grants supported, at best, a very modest living when they were at 110% of the federal poverty level in 1975. Since then, the typical grant has fallen by over half, to only 50% of the poverty level in 1999.

Current grants are far below the amount needed just to scrape by, forcing recipients into a constant struggle to meet survival needs that detracts from efforts to stay healthy and to participate in employment, education, or training. For a typical family of three, the monthly grant is only $577. While Food Stamps help, after rent a mother has only about $6.30 a person a day, in cash and Food Stamps combined, for food, clothing, utilities, personal care, school supplies, laundry, recreation, household supplies, transportation, and all other household needs. Many have even less because their rent exceeds the maximum shelter allowance.

Inadequate grant levels cause family crises, hunger, and overcrowding. These impacts often lead to foster care and/or homelessness. Even ignoring the human impact, it costs much more to care for people in foster care and in shelters than in their own homes. It has been estimated that annual costs run over $30,000 to shelter a homeless family and over $20,000 to shelter a homeless individual, and at least $15,000 to care for a child in foster care.

The current public assistance system has strict work requirements and strict protections against fraud and abuse. All recipients are finger-printed and screened for drug or alcohol abuse, there are rigid time limits on cash aid, and all those who are capable of working are subject to tough work requirements.

New York faces a job gap of 800,000 in the effort to move welfare participants into jobs. Job creation in NYS has lagged behind the national average. From 1992 to 1998, the number of new jobs increased by less than 70,000 on an annual basis. The annual average increase in private sector jobs from 1992 to 1998 was only 1%, well below the national average of 2.7%. The situation is even worse for the low-wage jobs that welfare participants are likely to obtain. It has been estimated by the Preamble Center for Public Policy that the New York State economy created only 7,500 net low-income jobs in 1998.

Community and labor groups have proposed the Empire State Jobs Program, a five-year demonstration project to create four thousand 18-month temporary jobs to give welfare participants and other unemployed individuals the paid work experience that they need to make the transition to unsubsidized work. $110 million in funding is needed for this program. The legislation was sponsored by Assemblymember Roberto Ramirez, Senator Nicholas Spano and nearly 50 other legislators.

The 1999-2000 state budget allocated $13 million for a "wage subsidy demonstration program" for welfare participants, primarily using funds from the state’s $1.4 billion windfall from federal welfare reforms. $11 million of this total will go for projects in NYC. The Department of Labor will allocate funds to non-profits to administer the program. Participation in the jobs program is limited to one year. The program is expected to create 500 transitional jobs.

The current federal minimum wage of $5.15 an hour falls far short of the goal of allowing full-time workers to achieve a modest standard of living without reliance on public benefits with intrusive means-tests. Combined income from full-time, minimum-wage work and earned income tax credits is significantly below the eligibility cutoff for Food Stamps.

A fair minimum wage helps workers maintain a satisfactory standard of living, reduces income inequality, and enhances work incentives. Unfortunately, the minimum wage has fallen sharply over the past 30 years relative to the cost of living, to the official federal poverty level, and to average wages. In 1968, a full-time minimum wage worker earned just below the federal poverty level for a family of four and the minimum wage was 56% of the average hourly wage and worth $7.50 in 1998 dollars. Currently, a full-ime minimum-wage worker earns barely more than the poverty level for a family of two and the $5.15 minimum wage is only 42% of the average hourly wage [Minimum Wage and Overtime Hours Report, US Department of Labor (June 1998)]. The real value of the minimum wage is 19% lower than in 1979. Also, the method of calculating the poverty level has not kept up with the changes in how low-income households spend their income (e.g., on skyrocketing housing costs) so a living wage would need to be close to $10 an hour.

In New York the state minimum wage has not even kept up with the federal minimum wage increase of 1996. The minimum wage is still only $4.25 an hour for those who are not covered by the federal minimum wage such as farm workers, amusement park workers, certain telephone operators, and newspaper reporters at newspapers with circulation’s of less than 5,000. States have the ability to raise their minimum wage above the federal level. Many of our neighboring states in the northeast have done so. Certainly New York , which has a much higher cost of living than the national average, especially for housing and energy, should follow suit. New York now has the biggest gap in income between the poor and the rich in the entire country – our low minimum wage is a major factor in this income inequality.

Recent evidence refutes claims that the minimum wage benefits principally teen workers in upper income families and that any increase reduces the total number of jobs. A leading national study found no evidence that the 1996 federal increase reduced the total number of jobs; and found, in fact, 35% of the benefits of the increase went to working families in the bottom fifth of the income distribution, almost three times the percent that went to the top fifth [Bernstein & Schmidt, Making Work Pay, The Impact of the 1996-1997 Minimum Wage Increase, Economic Policy Institute (1998)]. A 1998 survey by Jerome Levy Economics Institute found that most small businesses did not change their employment practices when the federal minimum wage was raised to $5.15 an hour.

Boosting the minimum wage is also important to the effort to help individuals transition off of welfare. In 1997, nearly 1/3 of former welfare recipients in the state of Oregon were making the minimum wage. The low level of the minimum wage means that paid work is usually not an escape from poverty.

• Work should pay enough to provide a family with a decent standard of living. New York should raise its minimum wage to a Living Wage.
• The state minimum wage should be immediately increased to $7.65 an hour.
• Establish automatic annual inflation adjustments.

According to a recent report from the United Hospital Fund, in 1996 approximately 3.2 million New Yorkers did not have coverage for health insurance. The percentage of uninsured in New York State is greater than the national average, though this has not always been the case. Moreover, since 1991 the problem has grown significantly worse with some 900,000 New Yorkers joining the ranks of the uninsured. As a result, by 1996 the rate of uninsured was 19.1% for New York State and 27.8% for New York City (Haslanger, K., et al, Taking Steps, Losing Ground: The Challenge of New Yorkers without Health Insurance, United Hospital Fund, 1998.)

People who lack health coverage are less likely to be healthy. Moreover, lack of affordable health coverage is a contributing factor to individual and family poverty, and often is the first in a series of events that lead to homelessness. Most (2/3 according to the United Hospital Fund report) of New York State's 3.2 million uninsured individuals work for small businesses and have incomes less than 200% of the Federal Poverty Level. Employment in the small business sector with very limited benefits is frequently the only option available to people attempting to move from welfare to work, that is, when real jobs are available at all. In the absence of affordable, comprehensive health coverage, the journey out of poverty can be easily stymied by the economic burden of an accident or the onset of serious illness.

Health care is a human right which the government of New York State must guarantee to all. To meet its obligation to all New Yorkers, the Governor and the Legislature should embark upon a strategy for universal coverage by passing into law New York Health, a single-payer solution that would use broad-based public financing to provide affordable, comprehensive health insurance for all. New York Health would save money by cutting billions of dollars of administrative waste while providing coverage for millions of uninsured New Yorkers.

The Family Health Plus program agreed to by the Governor and the State Legislature in December was a step in the right direction but falls far short of meeting the real need. We urge that the program be implemented immediately, not in 2001, and that the income eligiblity standards be increased.

Transportation problems pose a significant barrier to welfare participants and low-income people in New York State. Among the resulting difficulties, this presents a serious obstacle to securing and maintaining employment.

Many low-income people do not own cars. In Fiscal Year 1995 only 6.3% of recipients of Aid to Families with Dependent Children (AFDC, the major federal welfare program at the time) nationwide reported having access to a motor vehicle. With an average value of only $673, these vehicles are highly unreliable.

Most of the counties outside of New York City have limited or non-existent public transportation services. A national study reveals that nearly 40% of all rural counties in the U.S. have no public transportation available. New York State, contrary to popular perception is largely rural and in many upstate counties there is no public transportation at all .

Where there are public transit systems they may not operate to locations or at times needed by certain users. Many people leaving welfare for work and other low-income workers can only secure jobs that have irregular or night shifts. Many major cities throughout New York (with the exception of NYC) have limited public transportation services which make commuting via public transit to a job with an irregular shift almost impossible.

The migration of manufacturing jobs from urban centers to suburbs (and other countries) has left low- income workers with limited job opportunities in the cities and has resulted in welfare participants being isolated from jobs. Traditional public transit services have been designed to bring workers from the suburbs into cities and are weak at moving inner city residents to jobs in suburb or across town or in moving rural residents to suburban jobs.

There must be substantial subsidies for public transportation and car purchase and maintenance for welfare recipients engaged in work-related activities, including free subway or bus passes and payment of car registration, insurance, and repair. Subsidies should continue until income reaches a designated level.

Millions of New Yorkers, including those on public assistance and other employed adults, are denied the opportunity to access the education and training they need to participate in shaping the future for themselves, their family, and their community.

New York State has one of the greatest needs for adult basic education in the country. For example, the National Adult Literacy Survey projects that 25% of New Yorkers (about 3.9 million adults) have minimal basic skills (Level 1 out of five levels of proficiency) (National Institute for Literacy, 1998). Adults at Level 1 cannot usually perform activities such as locating an intersection on a street map. The

Educational Testing Service projects that adults with Level 1 skills "will have difficulty getting even a low-skilled, low-wage job...jobs that offer a living wage or provide substantial training are out of reach." Over half of adult welfare recipients do not have a high school diploma or General Educational Development (GED); an estimated 40% read at less than an eighth grade level. However, New York's adult education programs serve less than 3% of adults with the lowest levels of literacy and English language proficiency.

Levels of education and degrees of success in the labor market are strongly and directly connected. Adults with higher levels of literacy are likely to work more weeks during the year and, when working, are likely to earn higher wages. In 1994, high school graduates in New York State earned $242 more per week than those who had not completed high school. Research shows that 87% of four-year college graduates on welfare move permanently off of welfare.

Ongoing education and training is needed to obtain and maintain available jobs. The State Department of Labor reports that 75% of New York City's major employers require at least two years of college for entry level jobs. Studies also reveal that education levels play a major role in determining whether workers will become dislocated and, if dislocated, how successful they will be in getting new jobs and in recovering lost earning power. The re-employment rate for those with less than 12 years of schooling was 35%, compared with 76% for those with advanced degrees.

Welfare reform has had a devastating impact on enrollment in education and training programs. The City University of New York has lost 20,000 students who were on public assistance. Enrollment in literacy, English for Speakers of Other Languages (ESOL), General Educational Development (GED), vocational training, and even, it appears, Vocational and Educational Services for Individuals with Disabilities (VESID) has been drastically reduced due to welfare policies that discourage education and training. The result is less funding for all students, since the budget for many programs is based on enrollment.

The Problem

Building a quality child care system in New York State must incorporate the importance of early learning with the pressing needs of working families. Many factors make it imperative that significant investments be made in child care/early learning in the next years.

The dramatic increase in households in which both parents work and the shift from welfare to employment are placing incredible demands on the early childhood system. At the same time new research, demonstrating the importance of early childhood as the foundation years for brain development and social and emotional maturation, makes it essential to have high quality child care available.

Parents have increased expectations about the services and resources they need for their children and they are demanding more from child care/early learning professionals. Child care is no longer a place to "put" children while their parents work. It provides a child with the earliest opportunity to learn. Child care programs must be staffed with qualified professionals and appropriately equipped to promote language, literacy and a love of learning.

Affordability: For families at all income levels – and especially those with young children – child care is often the second or third most costly item in their household budget. The out-of-pocket costs for unsubsidized center-based child care in some areas of the state can reach as high as $10,000 - $12,000 per year, comparable to the costs of a higher education but without the financial aid options afforded by the higher education system.

Quality: The ability to recruit and retain qualified professionals to staff child care programs has reached crisis proportions. Extremely low wages are forcing qualified child care workers who have been in the field to leave for higher wage jobs; recruiting new people into the field is increasingly difficult, particularly in a tight labor market.

Supply: Parents often cannot locate high quality care that is available when they need it and where they need it. The increase in people working during non-traditional hours has created a greater demand for evening and weekend child care. To respond to these needs, and the overall increase in demand for child care, programs must be newly constructed in some areas of the state, and existing programs need to redesign and expand.

ES2 has adopted the positions developed by the statewide coalition, The Child Care that Works Campaign, which now seeks to implement the second year of its "Multi-Year Proposal to Expand Child Care/Early Learning in New York State." To build on the significant funding increases in the SFY 1999-00 Budget, the Campaign will be calling for further increases to support:

· A recruitment and retention initiative to include increased compensation of child care workers;

· Expansion of the 1999 State construction and renovation initiative for child care programs.

The Campaign will also be supporting legislation that will make improvements to child care safety.