I. Labor Supply

The impact of welfare reform on housing authorities and their residents is, in some part, a function of how well residents who are required to find jobs will succeed. There are two main components used in estimating work participation. The first, described in this section, is the number of people who are in the labor market (the supply of labor) seeking jobs for which public housing residents might qualify. The second is the availability and location of entry-level jobs, i.e. labor demand, discussed in Section II.

The labor supply pool consists of TANF recipients in public housing, and also other welfare recipients and unemployed people not receiving assistance but nonetheless searching for entry-level positions (see the introductory section on for important assumptions concerning the competitor groups). The human capital of residents and their competitors -- their educational attainment, vocational training, previous work experience and other characteristics -- should figure prominently in whether job searches are likely to be successful. These characteristics are considered in this section, which also compares the number of mandated public housing residents to how many other entry-level job seekers they have to compete with in trying to find a job before TANF benefits are terminated.

A. Employability Of Mandated Residents

In four of the five housing authorities for which such information is available, the majority of mandated residents lack a high school diploma and, therefore, may face serious obstacles obtaining even entry-level jobs requiring that credential. Likewise, among all the housing authorities studied, only a minority of mandated residents have recent or current work experience. However, as an alternative route to job preparedness, some mandated residents have received vocational training.

Educational attainment, or some close equivalent, is linked to the job opportunities open to mandated residents,¹ those TANF recipients required to participate in work activities as a result of welfare reform. Obviously, the higher the educational attainment, the larger the pool of jobs for which residents can compete² and a high school diploma is a necessary credential for some entry-level occupations.³ At RRHA, less than forty percent of the heads of households affected by welfare reform are high school graduates (see Table 1) and 12 percent have less than a 9th grade education. At NRHA, while 43 percent of those required to participate in work activities have a high school diploma, six percent have less than a 9th grade education. Those with minimal education could face significant handicaps when seeking jobs that require basic literacy, especially because educational attainment, in terms of years of school completed, is thought to overstate the functional skill level of residents.⁴

Besides education, work experience is another requirement for some entry-level jobs. At both RRHA and NRHA, however, only a minority of mandated residents would currently meet this requirement. In both, about ten percent of mandated residents are currently working. More of those enrolled in the JOBS program held some kind of job,⁵ but about one-quarter held jobs among those who are now mandated to participate in work activities.

Finally, vocational training can often provide an alternative path to job preparedness. But emphasizing job search, while placing time limits on it, as both TANF and Virginia's reform program do, leave little opportunity for vocational training. Therefore, such training would have had to be acquired prior to the implementation of TANF and the State reforms. At RRHA, about 36 percent of mandated residents were previously enrolled in the

JOBS program where they received training and/or assistance finding a job. At NRHA, a somewhat larger group, 46 percent, were enrolled in JOBS.

B. The Competition For Jobs

Among all of the housing authorities studied, mandated residents make up only a small fraction of the entry-level job pool. The competitor/resident ratios vary from a low of 9:1, the case in Richmond, to a high of 102:1 in Los Angeles. In Richmond, Norfolk and Los Angeles, where information on education is available, public housing residents have the disadvantage of less education than some of those with whom they will be competing, other TANF participants who do not live in public housing.

There are about 2,150 TANF recipients in the City of Richmond not living in public housing who are required to participate in work activities and who will be competing with residents for entry-level jobs in the Metropolitan Statistical Area (MSA) labor market (see Table 2). These households constitute about two-thirds of TANF recipients in the City.⁶ In addition, there are about another 1,450 mandated households in the remainder of the MSA competing with HA residents for jobs. Altogether, RRHA residents could find themselves competing with about 3,600 other TANF recipients from the City and surrounding areas.

Other TANF recipients are not the only persons with whom mandated RRHA residents will be competing for entry-level jobs. Reflecting an MSA unemployment rate of 3.3 percent, there were about 16,800 people, according to March 1997 CPS data, who were unemployed and looking for work in the Richmond area. According to the CPS, for the Richmond MSA, 38 percent of unemployed job seekers have a high school diploma or less and, therefore, constitute the segment who might be competing with mandated residents in the metropolitan area labor market. Thus, the 1,158 mandated public housing household heads in Richmond could be competing with 6,400 unemployed entry-level job seekers. In total, mandated RRHA residents could find themselves competing with 10,000 others as shown in Table 2.⁷ Thus, each public housing resident could be competing with close to nine other MSA residents for entry-level jobs in the MSA labor market (see Table 3).⁸ Of course, if there were sufficient jobs in an area, the fact that there are a large number of competitors may not be significant.

In the City of Norfolk there are 1,750 mandated households not living in public housing who will be competing for jobs with public housing residents along with 4,350 TANF recipients from the surrounding counties. Unlike Richmond, the bulk of TANF participants in the Norfolk MSA come from outside of the central city. In addition, the Norfolk MSA had an unemployment rate of 4.6 percent, according to the CPS, with 34,600 unemployed persons. The CPS data for the Norfolk MSA shows 67 percent of unemployed job seekers have a high school diploma or less. Taking this as the proportion of the unemployed competing with mandated residents, then 23,150 unemployed persons could be competing in the same job pool with them, a much larger number of unemployed competitors than in Richmond. In total, the 898 mandated NRHA residents could find themselves competing with 29,250 others for entry-level jobs, swamping them by a ratio of about 33-to-l.

The larger number of competitors that mandated public housing residents face in the Norfolk area is partly the consequence of the unique labor pool found in the area. There are large numbers of military retirees and the dependents of people in the military both willing to work part-time and for lower wages because they are cushioned by government salaries and pensions, either their own or those of other household members. The ebb and flow of military dependents into and out of the area is said to contribute l.0 to l.5 percentage points to the unemployment rate.⁹ In addition, the weaker economy of Norfolk also contributes to the fact that mandated residents will face more job competition than in Richmond.

Enumerating those who are likely to compete with mandated residents for entry-level jobs does not fully convey the odds facing public housing residents. There appear to be relative advantages due to education for competitors both inside and outside of TANF. About 40 percent of RRHA's and NRHA's mandated public housing residents have a high school diploma, compared with about one-half of mandated non-public housing residents (see Table 1). Therefore, the mandated non-public housing residents may have a slight competitive advantage when seeking entry-level jobs. Similarly, over one-half of Richmond's non-welfare female competitors for entry-level jobs have a high school diploma and two-thirds have a high school education in Norfolk, perhaps giving each group a competitive advantage over the public housing residents in their respective cities.¹⁰

When it comes to having received vocational training in connection with the JOBS program, mandated households who were not public housing residents have the advantage. While less than one-half of NRHA's mandated public housing residents were enrolled in JOBS, almost three-quarters of mandated non-public housing have been enrolled in the JOBS program. In addition, it is possible that any TANF recipient could have received vocational training through other public or private programs.