Chapter 6: The Welfare to Temp Work Pipeline
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Since the 1990s, most cash welfare recipients have been required to get a job or do mandated “work activities” to receive their monthly check. These requirements are intended to help parents who are struggling financially into jobs that will help keep them out of poverty and off government benefits. But is the work requirement system meeting either of those goals?
According to our analysis of data from Wisconsin, an average of nearly 70% of employed welfare participants worked at temp companies. These companies put people to work in other companies, trying to fill temporary jobs where the work is often grueling and the pay low.
Host Krissy Clark visited a temp company in Milwaukee just before the pandemic started that was giving away gift bags and $100 referral bonuses to try to lure more workers for temporary jobs at a sausage factory in the midst of labor shortages.
“It’s a dogfight for people,” explained the temp company’s now-president. The temp jobs required making sausages in a 32-degree room, often for a 10-hour shift. Temp workers were warned that they could be in danger of damaging their hearing on the factory floor and having their fingers cut off or crushed, and that their jobs could end at any time for any reason. The pay: $11.75 an hour.
Temp agencies and for-profit welfare companies often have a symbiotic relationship. Welfare companies receive a taxpayer-funded bonus for getting recipients into a job, and temp companies always have openings that need to be filled. Temp agencies also get rewarded with a tax credit for hiring welfare recipients.
Welfare-to-work has been so good for temp agencies that some of them actively lobby for more work requirements in government benefits through campaign contributions and white papers.
“It gives us a pool of more people we can help,” said the CEO of one temp company whose franchises have ranked among the top 10 employers of Wisconsin welfare participants. “A person loses self esteem when they don’t go back to work. Whether it’s voluntary or involuntary work is very important for their psyche.”
On this episode, host Krissy Clark looks at the cozy relationship between for-profit welfare companies and temp companies desperate to put people to work in some of the country’s most precarious jobs. Plus, a frank discussion with an architect of our modern welfare-to-work system, former Wisconsin Gov. Tommy Thompson.
For a deeper dive into the numbers about how private welfare contractors make money and some other eye-popping data, check out the work of our colleagues at APM Research Lab.
And here is a full statement from Maximus about their relationship to the temp industry.
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