University of Wisconsin-Milwaukee
Employment and Training Institute

Brief Summary

Integrating Milwaukee County AFDC Recipients into the Local Labor Market

by John Pawasarat and Lois M. Quinn, University of Wisconsin-Milwaukee Employment and Training Institute, November 1995

Welfare proposals to move thousands of additional Milwaukee County public assistance recipients into the labor force raise critical issues regarding the availability of jobs in the Milwaukee area and existing mechanisms for filling job openings. There has been some speculation but little substantive analysis regarding the potential economic impact of the current welfare proposals. Will the expansion of the local labor force stimulate job creation, reduce the current labor shortage, contribute to a deterioration of wages in some occupations, or expand the pool of low-skilled low-wage workers? Will employers be willing to hire those labor force entrants who lack education, training, job experience or good work habits? If not, how many community service or trial jobs will be necessary to absorb and train the pool of workers unable to obtain unsubsidized employment? Additionally, how can job seekers deal with significant barriers to employment due to transportation and child care needs?

  • Seventy percent of Milwaukee County AFDC caseheads expected to work under the state's W-2 ("Wisconsin Works") welfare proposal reside in central city neighborhoods on the near northside and southside of Milwaukee. There is a 26,000 job shortage between available full-time openings (2,018 openings reported by employers in May 1995) and job seekers (18,580 AFDC caseheads expected to enter the labor force and 9,650 unemployed men and women already actively seeking work). In the remaining areas of Milwaukee County there is a 7,600 job shortage between available full-time openings (9,498 total) and job seekers (7,400 non-employed AFDC adults expected to enter the labor force and 9,750 unemployed residents already actively looking for work).

  • Graph 1: May 1995 Job Openings vs. Unemployed Workers Including AFDC"Expected to Work"

  • In May 1995, a total of 4,075 full-time jobs were available in Milwaukee County for persons with no experience and no post-secondary education. An additional 3,245 entry-level full-time jobs were available in Waukesha, Ozaukee and Washington counties. However, without public transportation, changes in hiring patterns on the part of employers in these counties, and access to job information networks, Milwaukee County AFDC recipients will by necessity concentrate their job search on Milwaukee County.
  • While employers identified over half of their job openings as difficult to fill in May 1995, they listed only 12 percent of these openings with the state Job Service. The largest numbers of jobs for persons lacking occupation-specific training or education beyond high school were in service and sales. However, only 3 percent of sales jobs and 6 percent of service job openings were registered with Job Service.

    As welfare initiatives increase the numbers of AFDC clients required to participate in job search activities, Job Service may receive even less use by those employers who increasingly prefer job placement or temp agencies to screen out unskilled or less motivated job seekers. This lack of usage limits the effectiveness of state-supported "one-stop" job centers for AFDC recipients.

  • Graph 2: Percent of Milwaukee Area Job Openings Listed with Wisconsin in Job Service

  • The majority of entry-level full-time jobs in the Milwaukee metropolitan area are currently paying well above the minimum wage. Most jobs (87 percent) requiring high school graduation but no experience are paying at or above $6.00 per hour, while 60 percent of those full-time job openings having no requirements whatsoever paid at or above $6.00 per hour. It is likely that the introduction of full-time sub-minimum wage community service jobs for parents now on AFDC could depress private market wage offerings.
  • Most entry-level part-time jobs in the metro area pay below the $6.00 level. Seventy-eight percent of part-time job openings with no requirements pay below $6.00 as do 45 percent of jobs requiring only a high school diploma and no experience.

  • The majority of jobs available for persons lacking technical training or occupation- specific experience are part-time rather than full-time. Milwaukee County employers reported 5,816 part-time entry-level jobs for persons with high school or less. These jobs could provide valuable work experience for new labor force entrants, but do not pay enough to support a family. They also present special child care challenges for parents since work hours may be variable and unpredictable.
  • In addition to AFDC recipients looking for work, Wisconsin Job Service reported over 34,000 persons not on public assistance who were registered as active job applicants in the four- county area in May 1995. Over 80 percent of these applicants have completed high school and about a third have one or more years of college. An analysis of the AFDC cases in Milwaukee County shows that over half (53 percent) of caseheads without reported earnings have not completed high school, a third have a high school degree only, and only 12 percent have post- secondary training.

  • Graph 3: Years of Schooling Completed by Persons Looking for Work or Expected to Work

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