Spending more on the long-term unemployed to reduce government spending
Why a larger initial spend on a job seeker can result in a win, win, win situation.
Increased spending on a social program for fiscal conservatism? You might at this point think I’m an idiot, but if you will indulge me for just a moment, I’d like to show you how a technology-based social program in Dallas, TX has achieved just that.
Let’s get straight into some estimates of how much it costs the Federal, State & Local Governments to support a family of three (one parent, two children) on government assistance with no income. Administrative costs are estimated based upon budgets of agencies.
FUND MONTHLY COST ADMIN COSTS TOTAL
TANF ("WELFARE") $263 $36 $299
LOCAL TANF SERVICES $1497 $N/A $1497
WIA YOUTH SERVICES $1860 $N/A $1860
SNAP (FOOD STAMPS) $526 $85 $611
MEDICAID/SCHIP $714 $36 $751
CHILDCARE SUBSIDIES $675 $174 $849
HOUSING $868 $122 $990
LIHEAP (UTILITIES SUBSIDIES) $58 $N/A $58
SCHOOL LUNCH $43 $6 $49
WIC $31 $13 $44
MONTHLY TOTALS $6,535 $472 $7,007
YEARLY TOTALS $78,420 $5,664 $84,084
As you can see, at around $84,084 per year, it’s a significant cost to the government and ergo the taxpayer. Not that all 95,000 unemployed people in Dallas would have precisely the same claim profile as above for an entire year — some will be less, some more. However, amplified to that level, you can imagine that the costs are significant. If all of those people were off work for a year, the cost would escalate to $8 billion in Dallas County alone. Ouch!
What if I told you that by spending only ~50% of a single month’s worth of assistance on a 12 month program:
- We reduce that cost per person on average by 75%. $21,849 vs $84,084 & $2 billion vs $8 billion.
- You could see ~9 out of 10 of those people emerge from welfare (TANF) and not return to it up to seven years later.
- You could impact the lives of not only those people directly in the program, but also their children and the rest of their immediate family.
Would you take that deal as a fiscal conservative? Would you take that deal as a liberal? Would you take that deal as a member of the community where that person lived? I’d like to think that the answer is yes across the board. So how is it accomplished?
I work with a company called Business Access, formed by Kim Bunting, a social entrepreneur. She created the company on the back of a social program she originally architected with Workforce Solution Greater Dallas — the agency responsible for workforce in Dallas County that put technology and e-learning into the hands of those that desperately needed it. The partnership has continued through a variety of evolving social programs using technology over the course of sixteen years and has expanded to 18 states.
The tenets of the program are device accessibility, family-safe connectivity, tailored learning materials and personal mentoring. The combination of those tenets produces a recipe for success. The participants — “Achievers”, are brought through to a formal graduation from the program, where they earn ownership of the device they are using and in doing so are infused with the tools they need to find or retain employment.
It truly is remarkable to see the impact on people’s lives, when they are given what is the epitome of a hand-up. Sixteen years of empirical data shows us that when someone is in poverty, if they are given a productive way forward; a way to earn and learn their way out of poverty, they will grab it with both hands.
When we talk about reducing government spending it is the easy road to speak in wide-reaching, blanket-terms about how cuts should be made; instead let’s talk about spending the right amounts of money on programs that work. On programs that deliver empirical success through technological innovation, not only for long-term fiscal responsibility, but also for long-term personal and societal success.
Let’s back programs that have the win, win, win necessary to change society:
- A win for the individual in crisis.
- A win for society.
- A win for the taxpayer.
Here are some quotes from just a handful of graduating Achievers:
I want to thank everyone involved in this program. This is a great program! Thanks to all these courses I was able to get a job interview for a great full time position and I also got the job. With this courses I was able to better all my skills and I’m able to practice some of the technique I learn at my current job. I wish there were a lot more programs like this one to help people like me. This has been a great experience and I’m very Thankful that I’m in a better place in the my life.
The program helped my kids believe in their mother.
There are many things I am thankful for, but the thing I feel the strongest about the blessing that I received. I have a new career at a telecommunication firm that allow me to utilize the training and courses I am currently studying from the Business Access program. With this new career I have been able to grow past public assistance, put my children in an accredited day care and learning program. My children made the process possible, because without them I wondered aimlessly with no goals.
This is/was a wonderful opportunity for someone that is try to get back into the working world. The computer and the access to the Internet was the best. You did not have to wait in the unemployment office to use the computer and you were not timed. Thank you for giving me the opportunity to be involved in this program.
The technical skills that Business Access helped me gain will carry me through my professional career. Before, I went on a computer every once in a while, now I use my computer every day and do not know what I would ever do without it!