Chapter 1 …

                                                  Chapter 1
                                                         Introduction




I
"    f you work, you should not be poor." This is the implicit social con-
     tract in America. Work is a fundamental value in the United States,
     and hard work should bring rewards. Until recently, it generally did.
As the prosperity of the country grew in the years after World War II,
so did the fortunes of most of its people. In the last twenty-five years,
however, the earnings of low-skilled workers have fallen further behind.
It is no longer true that a rising tide lifts all boats.
    The working poor are disproportionately minorities and women, par-
ticularly single mothers. Many lack the necessary resources to juggle the
responsibilities of earning a living and giving their children the love and
supervision they need. People at all income levels find it difficult to bal-
ance family and work, but the challenges are all the more daunting for
those employed in low-wage jobs with few if any benefits. Many move
from one job to another, work irregular hours, and take on a second or
third job, yet find themselves taking home a paycheck that leaves them
in poverty.
    In the last twenty years, as awareness of working poverty has begun
to permeate our political consciousness, policy makers have begun to
search for solutions. In this book, we tell the story of one promising
effort called The New Hope Project, an experimental program that lasted
three years. New Hope was created by a dedicated and visionary group
of community activists and business leaders in Milwaukee, Wisconsin,
who believed that work should be the best route out of poverty. New
Hope was not a welfare program, but a social contract. Its founders un-
derstood the basic inadequacies of the low-wage labor market and
forged a set of work supports for full-time workers--both parents and
nonparents, men and women--that would lift them out of poverty as
well as provide essential benefits in the form of health insurance and
child-care subsidies for people who needed them.
    A decade later, there is clear evidence that New Hope reduced pov-
erty and promoted the school achievement and development of children
of working, low-income parents. We know this because the program was
HIGHER GROUND

subjected to a careful evaluation. The names of people who applied for
New Hope were put in a lottery; half were accepted into the program
and the other half became a comparison group.
   We go beyond the statistical reports and surveys to tell the stories of
some of the people who participated in New Hope--what their families
were like and what happened to them and their children during and
after the three-year New Hope program. In these individual stories, we
learn about the complicated circumstances in which adults attempt to
sustain a balance of work, family, and individual needs and, more im-
portant, which supports help them achieve that balance.
   Our research offers some of the strongest evidence to date that work
supports make a difference in the lives of people in the low-wage labor
market. None of us--the founders of New Hope, the participants, or the
researchers--are under the illusion that work supports can solve all the
problems in the larger economy or all the individual difficulties that can
impede adults' efforts to support themselves. Overall, however, we con-
clude that the policies tested in New Hope offer the United States a
positive and feasible model to achieve the goal of the American social
contract that work should pay while allowing low-income adults to sus-
tain a reasonable balance between work and family.

AN IDEA TAKES ROOT
The story of New Hope begins in the late summer of 1979, when a group
of social activists gathered at a retreat in the mountains of eastern Penn-
sylvania to hammer out the final details of an organization to push for
large-scale changes in employment laws, policies, and programs. Called
the Congress for a Working America (CWA), the organization's stated
purpose was, according to Julie Kerksick, one of the key participants, "to
create the right and opportunity for a decent and productive job for ev-
ery American who wanted to work." Kerksick, her husband John Gard-
ner, and many others in the group were labor organizers who thought
of themselves as outsider activists pressing for change. They had joined
forces with leaders from the "inside," including David Riemer, a policy
expert with state and national government experience.
   Almost ten years later, in Milwaukee, the organizers had scaled back
their original hopes of transforming national economic and social poli-
cies but continued to search for work-based solutions to entrenched pov-
erty in the United States. In his book, The Prisoners of Welfare: Liberating
America's Poor from Unemployment and Low Wages, Riemer laid out a set
of policies to promote and support employment for the poor.1 Soon he
and Kerksick, working with other activists and community members,
combined the book's ideas with hard-won lessons from running small-

2
                                                            INTRODUCTION

scale employment programs. The result was a proposed policy demon-
stration aimed at proving that such policies could work. They named
the experimental program New Hope and began to mobilize community
support.
   Tom Schrader, the CEO of the Wisconsin Gas Company, first heard
about New Hope at a meeting of the Greater Milwaukee Committee
(GMC), an organization of Milwaukee business leaders that was asked
to lend its support. He liked what he heard, particularly the idea that
the program was based on providing incentives and reducing barriers to
work.
   "The idea was comprehensive," Schrader said. "It was economic-
driven, and it really was going to take out some of the underpinnings
that had created the dependencies that were in the social system at the
time."
   When Schrader was asked to assume a leadership role on behalf of
the GMC, he readily agreed. A central reason for his quick agreement
was a meeting that Kerksick had arranged with some mothers receiving
financial and medical assistance from what was then the Aid to Families
with Dependent Children (AFDC) welfare program. One of the mothers
reported that she had found a job but that her earnings soon made her
family ineligible for health insurance. She quit her job and returned to
welfare because, she said, it was the best thing for her children. Schrader
was appalled. He believed that public policies should motivate people
to work and to seek better jobs that would help their families, rather
than force a mother to choose between work and her family's well-being.
   These three people brought different skills and personalities to a proj-
ect that ultimately extended over the next decade. Riemer was an in-
tense, intellectual visionary. Kerksick was a tireless, energetic, and dedi-
cated community organizer who put a human face on poverty and the
poor. Schrader was a thoughtful, practical business executive with a
strong commitment to building his community. From these roots, New
Hope's organizers assembled a remarkable and varied coalition of politi-
cians, business leaders, community organizations, and policy experts.
   In August 1994, New Hope opened its doors in two of Milwaukee's
poorest neighborhoods. With its stipulation that participants must be
employed full time (thirty hours a week) to qualify for its benefits, New
Hope was designed to increase the incentives and reduce the barriers to
work by offering an optional menu of earnings supplements, subsidized
health insurance, and subsidized child care. Based on the belief that ev-
eryone deserves the opportunity to escape poverty through employment,
the program was available to all adults who were willing to work, not
just to those with dependent children, a significant departure from wel-
fare policies past and present. Individuals could pick and choose the

                                                                          3
HIGHER GROUND

supports that fit their needs, rather than adapt to a one-size-fits-all pro-
gram. For those with dependent children, the system was carefully de-
signed to make work pay more generously than welfare. If a participant
could not find a job, the program provided opportunities for temporary
community service jobs that paid the minimum wage but still qualified
that person for benefits.


    What New Hope required:
     Proof of thirty or more hours of work per week
    What New Hope provided:
     An earnings supplement that raised income above the poverty line
     Subsidized child care
     Subsidized health insurance
     If needed, a temporary community-service job
     Respect and help from New Hope staff
    Who was eligible:
     All adult men and women, regardless of family status, with low family
     incomes and living in Milwaukee's poorest neighborhoods



   New Hope was consciously different from welfare. First, it was volun-
tary. If an individual was not ready to meet the program's full-time work
requirement, he or she could come back when ready. Second, all of New
Hope's services were available in a single office to reduce the time-consum-
ing and confusing process of dealing with multiple agencies. Third, each
participant was assigned to a project representative who provided infor-
mation about jobs, educational opportunities, child care, and other re-
sources in an atmosphere of respect. Unlike most welfare offices, New
Hope operated under the philosophy that the program was a social con-
tract under which both parties bring something to the table, rather than
a paternalistic scheme that tells its clients what they must and must not
do. Participants provided a commitment to full-time work. New Hope
offered the necessary supports to ensure that they would not be poor
and that they and their families had access to basic health and child-care
benefits.


THE PEOPLE OF NEW HOPE
Men and women from a wide range of backgrounds were among those
hoping for help from New Hope. Because New Hope was open to all
low-income adults, almost 30 percent of its applicants were men. Mi-
chael, for example, lived with his parents and shared custody of three

4
                                                           INTRODUCTION

children younger than age five with their mother.2 He had been unem-
ployed for some time when he applied for New Hope. After a job search,
he qualified for a community service job for six months (the maximum
allowed) while attending a job-training course. He also used the health
insurance when he needed surgery.
    "It helps," Michael said of New Hope. "I like the benefits, health in-
surance. New Hope also helped me get on track when I didn't have a job."
    Some applicants were women who had no children at home. Rachel
was older than fifty and by her own account had not worked in over
twenty years. Angela, a thirty-three-year-old, was frustrated because she
was unable to earn enough to meet her basic needs. She applied for New
Hope because she thought it might help her find a job and give her extra
income every month.
    "It'd help put [my income] up to where I can live off it," she said,
"because Uncle Sam robs the single person, like me, without a gun, and
you just don't see the money."
    Others had children at home and needed a jump start or extra sup-
ports. Inez was twenty years old and already the mother of an infant,
whose biological father was in prison. She was living with a new boy-
friend, Marco, receiving welfare and working part time in a drugstore
when she heard about the New Hope program at a job fair. "What do I
have to lose?" she thought. New Hope helped her get a full-time job so
that she could reach the thirty-hour threshold.
    At age twenty-four, Lakeisha found herself separated from her hus-
band and responsible for three very young children. She had neither a
high school diploma nor work experience, and she had been receiving
welfare continuously since the birth of her first child. She wanted to earn
a high school equivalency degree (GED), but the welfare office would
not continue her payments while she attended school unless she also
worked full time. But how could she do that with three children and
little support from her husband? New Hope's offer was different, and
Lakeisha saw it as a better way of leaving welfare and getting a job.
    Elena, age twenty-three in 1994, immigrated to Milwaukee from Cen-
tral America when she was thirteen, living with various family members
until she graduated from high school. When she applied to New Hope,
her husband, Manuel, was in prison for dealing drugs, leaving her with
two young children. Elena had worked as a part-time receptionist while
her mother took care of the children, but when Elena switched to full-
time work, she struggled to piece together child care. Her mother was
unavailable in the afternoons because of her own job, and no one else in
the family could help. In the first interview with her New Hope project
representative, Elena repeatedly stressed that she just wanted child care
to ensure that her children were safe while she worked full time.

                                                                         5
HIGHER GROUND

   Inez, Lakeisha, and Elena were all young mothers--the group that
many welfare programs were designed to serve. To better understand
the lives of the working poor, we include their stories in this book. We
choose to feature these three women because they illustrate the many
ways in which New Hope was used to maintain a balance between work
and family. Inez, Lakeisha, and Elena all used New Hope, although not
everyone in the program did so. All three are mothers and none is mar-
ried to the father of her children in a conjugal household. Although New
Hope included single men and women without children, 70 percent of
the entire New Hope sample were--like Elena, Lakeisha, and Inez--sin-
gle mothers with children. Because of the heightened interest in the ef-
fects of welfare reform on children, we were interested in how these
mothers and their children were faring. Could New Hope positively af-
fect both child and family well-being as well as participants' employ-
ment trajectories? Therefore, to learn more about these families, we spoke
extensively with them and more than forty other people in the study
over the course of the New Hope demonstration.



BACKDROP TO NEW HOPE: THE WORKING
POOR IN AMERICA
These profiles are just some stories of the 23 million American adults in
1994 who were living in families with incomes below the official poverty
line, which, in today's dollars, was about $15,800 for a single parent with
two children.3 Poverty is surprisingly common among full-time working
adults in the United States. At the inception of the New Hope program
in 1994, 6.5 million American adults, whether parents or not, were work-
ing full time but earning too little to lift their families above the poverty
line.4 Even more American children--7 million--lived in families who
were poor despite a parent working full time. Some 2.6 million children
with working parents also lacked health insurance.
   Poverty is widespread among the working population in part because
economic growth is no longer creating better opportunities for people
with low skills. In the years that followed World War II, economic
growth generally led to improved earnings for all workers. Since the
1980s, however, many more workers have remained poor even in peri-
ods of prosperity.5 Jobs often have been available, but wages have fallen,
leaving people working harder to stay afloat. Manufacturing jobs that
paid reasonably good wages have become scarce, outnumbered by ser-
vice jobs with low wages and fewer benefits.6 Furthermore, many of the
new jobs are in the suburbs, far from the homes of the poor.
   Economists attribute these changes in wages and jobs to technological

6
                                                         INTRODUCTION

changes that favor high-skilled workers, an international economy, an
influx of immigrants willing to work for low wages, and the erosion of
minimum-wage and union protections. Although economists may not
agree about the relative importance of these causes, they do agree that
the economic and employment world faced by a person with little educa-
tion in the mid-1990s offered few options for escaping poverty.
   These economic changes have come on top of long-standing inequities
in the labor market for women, African Americans, and other minori-
ties.7 Although the earnings gap between men and women declined in
the years before 1994, it has not disappeared. In 1993, women working
full time were earning about 70 dollars for every 100 dollars earned by
men with similar levels of education.8 Gender and race inequities in
wages and typically low levels of schooling converged in families
headed by single mothers who were African American or Hispanic, leav-
ing the majority of them in poverty.9
   Milwaukee, with a population in 2000 that was 39 percent black and
12 percent Latino, was one of the most highly racially segregated cities
in the United States.10 The segregation was due in part to the annexation
of large tracts of open land to the north and west, which would in most
cities have been separate suburbs. These areas had been settled by whites
in recent decades, leaving blacks in the central city, where New Hope
selected its participants. Having lost much of its industrial base in the
1970s and 1980s, Milwaukee's economy echoed national trends. Although
Wisconsin's economy had generated a head of steam by the mid-1990s,
jobs were often located far from the inner-city neighborhoods where
most of the poor lived. Milwaukee's downtown had little of the hustle
and bustle of a prosperous city, and many of its poor neighborhoods
were infested with drugs and gangs. Given this economic and social
context, New Hope's set of work supports could be critical to working-
poor adults.



ENDING WELFARE AS WE KNOW IT
New Hope was created during a time when the nation was moving to-
ward a consensus on the moral value of work and self-sufficiency as key
goals for the poor and, correspondingly, toward agreement that welfare
needed to be reformed. Although there had been scattered public and
private programs to assist indigent parents throughout the nation's his-
tory, the first major federal initiative was launched when Aid to Depen-
dent Children (later Aid to Families with Dependent Children, or AFDC)
was included in the Social Security Act of 1935 as part of President
Franklin Roosevelt's New Deal. This program provided small cash grants

                                                                       7
HIGHER GROUND

to support children whose fathers had died or left them bereft, and was
designed to allow mothers to care for children who would otherwise
have been sent to orphanages or forced into work at an early age.11
   Fast-forward to the welfare and policy debates of the 1980s and 1990s,
when individuals from a wide swath of the political spectrum wanted
to change the welfare system and move low-income single mothers into
jobs.12 Welfare, many argued, had become a poverty trap. It contained
strong disincentives to work and yet did not pay enough to lift people
out of poverty.13 Politicians conjured up images of welfare "queens" liv-
ing comfortable lives at taxpayer expense, and because the programs
increasingly served African American and Hispanic women whose chil-
dren had been born outside of marriage or who were divorced rather
than widowed, public perceptions became increasingly negative and ra-
cialized.14 Given the dramatic social changes in family structure and
women's work in the country, many saw no reason for poor mothers to
be offered financial support to stay home with their children. Mothers
of all economic stripes were divorced or unmarried, and both married
and single women were entering the workforce. Why should poor single
mothers not be asked to do the same?
   What were the odds, however, that working would improve the situa-
tion of people such as Lakeisha, Inez, or Elena when many full-time
workers were not earning enough to support themselves and their fami-
lies? Even if they landed full-time jobs, they would in all likelihood
merely move from welfare into the ranks of the working poor, and their
children might suffer from inadequate child and health care.
   By 1992, increasing awareness of the plight of working-poor families
and political pressures to curtail welfare converged in the familiar
themes of Bill Clinton's first presidential campaign. People who were
working, who were "playing by the rules" and doing their best to help
themselves, deserved to have their basic needs met.15 They did not de-
serve to be poor. In line with this theme, the federal government quietly
enlarged the earned income tax credit (EITC), which provided tax re-
funds on earnings of low-income workers. The maximum benefit avail-
able to a family with two or more children expanded from $1,384 per
year in 1992 to $4,400 in 2005.16 In the late 1980s and early 1990s, legisla-
tion expanded both health insurance, through the Medicaid program,
and child-care subsidies to children of working-poor parents outside the
welfare system.17
   Clinton's other campaign theme, to "end welfare as we know it," struck
a responsive chord in a nation already primed for its message.18 Policy
makers from both political parties pushed for reforms to move recipients
into work. With the 1996 federal welfare reforms, cash assistance was no
longer an entitlement, and almost all recipients could be required to

8
                                                           INTRODUCTION

work.19 At the same time, federal funding for subsidized child care al-
most doubled between 1991 and 2000,20 and the State Children's Health
Insurance Program (SCHIP) was established in the late 1990s to insure
children in families whose incomes slightly exceeded the Medicaid eligi-
bility limit.
   These changes have revolutionized the way that states provide cash
assistance and services to poor families with children. Although these
new policies slashed welfare rolls and almost certainly encouraged or
forced millions of adults, particularly single mothers, to enter the labor
force, most of these individuals do not earn enough to lift their families
out of poverty. Nationally, during the first ten years of New Hope, the
number of poor children fell from 15.7 million in 1994 to 12.9 million in
2004. In 2004, however, the number of children in working-poor families
(in which at least one adult is working full time)--6.8 million--was vir-
tually identical to what it was in 1994. Although fewer African American
children live in working-poor families, the number of Hispanic children
has increased.21
   Under Governor Tommy Thompson, Wisconsin led many of these re-
form efforts. Even before the 1996 federal welfare reforms, Wisconsin
had abolished its General Assistance program, put in place a "diversion"
system in which applicants for cash grants were required to search dili-
gently for work before being given cash assistance, and was sanctioning
families for failing to comply with work requirements.22 By the late
1990s, the number of people receiving cash assistance had plummeted,
with Wisconsin leading the trend.23 Wisconsin was also a leader in devel-
oping other policies that made working more attractive and feasible. By
the late 1990s, Wisconsin had developed a health insurance program for
low-income parents and children as well as generous child-care subsid-
ies for which all low-income workers are eligible. These policy changes,
coupled with a strong economy, pushed tens of thousand of families off
the welfare rolls and into the labor force. Taken together, they set a high
bar for judging the success of a program like New Hope.

NEW HOPE DESIGN TAILORED TO U.S.
ECONOMIC CONTEXT
New Hope was created to fit the contemporary social, political, and eco-
nomic context of the United States. Its package of benefits was not in-
tended to cure all of the structural and institutional causes of poverty,
or to replace a system of cash assistance for people who could not work.
It was designed to address several significant barriers to work created
by current conditions in the United States--low wages for people with
few skills, the absence of universal health care, and the lack of universal

                                                                         9
HIGHER GROUND

or low-cost child care. If the minimum wage had been higher, for exam-
ple, the structural context of New Hope would have been different. If,
as in most industrialized countries, the United States had universal
health care, health insurance would not have been an issue. The program
also took the existing national and state EITCs into account in establish-
ing wage supplements.
   New Hope was also not designed to remedy individuals' skill deficits
by providing job training or education, nor was it intended to address
serious personal problems. Some adults needed drug or alcohol counsel-
ing, mental health services, help with care for a disabled child or an
elderly parent, relationship support, or aid in coping with domestic vio-
lence. People facing multiple problems were often unable to sustain full-
time work, and the program referred them to appropriate services.
   Although New Hope did not address the structural problems of labor
markets and the economy or the individual characteristics that might
affect skill and motivation to work, it did offer key supports that work-
ing individuals could use to cope with the world of work in the late
twentieth and early twenty-first centuries. In this book, we use New Hope
to address the question "Given the current structural problems, what
policies can best assist working families in the United States today?"

WOULD IT WORK? THE NEW
HOPE EVALUATION
All of those who created New Hope agreed that their goal was to pro-
vide a model for national policy, not simply to establish a local program.
As Kerksick put it, "We haven't spent all of these years of hard work
just to deliver a program to seven hundred people. However proud we
are of the program, we wanted to change policies for all low-income
working families."
    According to Tom Schrader, the support from both the business com-
munity and foundations was predicated on the idea that New Hope was
testing a model that could be replicated in other states and communities.
The only way to test the efficacy of the model, they all agreed, was to
design a model program and evaluate it with rigorous methods. The
founders formed a technical advisory group composed of nationally rec-
ognized policy experts and scholars from a range of disciplines and po-
litical perspectives.
    As a result of this group's recommendations and funding constraints,
a trial program ran for three years. To gauge program impacts in the
most convincing way, the New Hope Board commissioned an evaluation
that used random assignment and a control-comparison group. This
technique of random assignment is the most stringent and demanding

10
                                                            INTRODUCTION

method to test a program. The board hired MDRC, a nonprofit research
firm known for its high-quality evaluations of employment and welfare
programs, to conduct the evaluation. Half of the individuals (678) who
applied for the program were randomly selected to have access to New
Hope's benefits for three years. The other half (679) became a compari-
son group that was ineligible for New Hope. The members of both
groups continued to be eligible for all other federal, state, and local pro-
grams--and to be subject to the rules of those programs--during a pe-
riod of rapidly changing welfare and poverty policies in Wisconsin and
across the nation. Both groups enjoyed the fruits of Milwaukee's strong
economy in the mid-1990s, and both could claim the increasingly gener-
ous federal and state EITC that supplemented earnings for workers with
low incomes. The key evaluation question was whether people assigned
to New Hope earned more, worked more, improved their well-being
and parenting, and saw their children benefit more than people assigned
to the comparison group.
   The evaluation was unusually comprehensive. With work, poverty,
and welfare dominating the public debate, evaluators monitored how
the program was implemented and tracked patterns of employment,
earnings, and receipt of food stamps and cash assistance. Two years after
participants entered the program, the evaluators collected detailed infor-
mation about job histories, family changes, and economic circumstances
from New Hope participants and from members of the comparison
group.
   More than half of the applicants for New Hope had young children
and most of the parents were single mothers. The evaluation therefore
included assessments of the program's effects on family life and chil-
dren's development among these parents in a substudy called the Child
and Family Study. Although it was widely believed that adults would
be better off financially after increasing their employment, there was less
agreement about how children might be affected. In the raging debate
over whether welfare recipients should be compelled to work, propo-
nents argued that children would benefit because maternal employment
provides a model of work, requires the family to operate on a regular
schedule, and removes the stigma of welfare. Opponents worried that
children would be left in dangerous child-care settings or at home with
inadequate supervision, and that the stress of juggling a low-wage job
with family responsibilities would leave mothers with little time or pa-
tience for their children's needs. It would be a hollow and short-lived
victory if welfare reform succeeded in moving parents into employment
but undermined their children's life chances.
   Some New Hope benefits were intended to buffer the potential stresses
of parents' employment for family life. Child-care subsidies would allow

                                                                         11
HIGHER GROUND

parents to select high-quality, reliable care for their children. Health in-
surance would relieve anxiety about medical expenses and encourage
adults to seek treatment for themselves or their children when they
needed it. The extra money provided by earnings supplements might
help to keep the cupboards full until the end of the month as well as
ease constant worries about money.
   To understand the effects of New Hope on children, the evaluators
gathered extensive information about school performance, psychological
well-being, and behavior problems from teachers, parents, and the chil-
dren themselves. They also asked parents about their own levels of
stress, depression, and hope for the future. Both children and parents
reported on parent-child relationships and on children's experiences in
child care and activities outside school hours.
   For a close-up view of how the program was affecting families, part
of the evaluation team conducted in-depth interviews during three years
of periodic family visits to a representative group of forty-four parents
and their children that included both families in the comparison group
and New Hope families, including Inez, Lakeisha, and Elena. Rarely has
so much effort been expended to understand how a program like New
Hope affected the lives of both adults and children.

DID IT WORK? NEW HOPE'S EFFECTS
"If you work, you should not be poor" was the guiding principle for
New Hope. The coalition of community and business leaders--conserva-
tive, independent, and liberal--that developed and implemented the
program brought their passions, their interpretations of history, and
their beliefs about current policy dilemmas to their vision of a program
to maintain a social contract with the working poor, a contract that com-
bined work with benefits that all workers should have and that parents
could use to be both breadwinners and caregivers for their children.
   The results of this vision, as we outline in the remainder of this vol-
ume, are very encouraging. New Hope reduced poverty among partici-
pants, but certainly did not eliminate it. For adults who were, for various
reasons, unable to sustain full-time work when they applied to the pro-
gram, New Hope boosted work and earnings both during and after the
program. For those already working full time, the program sustained
their work by providing subsidized child care. The program also in-
creased the employment of single men, provided access to health insur-
ance for uninsured adults, and increased enrollment in child-care centers
among young children.
   Many people for whom New Hope worked best faced just one or two
important obstacles. A significant problem for Inez and Elena was the

12
                                                            INTRODUCTION

cost of child care for their young children. Health insurance also was a
major concern for Inez. Community service jobs provided an opportu-
nity for many with several strikes against them to demonstrate that they
could be reliable, competent employees, thus increasing their employ-
ment prospects. Lakeisha found such a job. In short, the goals and life
circumstances of working-poor adults vary, and the effects of any pro-
gram are likely to be more positive for some groups than for others.
   Perhaps most important, children in New Hope families performed
better in school, were more cooperative and independent, and had fewer
behavior problems than comparison children. Many of these differences
remained a few years after benefits ended. Because boys have a higher
risk of school failure and behavior problems than girls do, it is notewor-
thy that New Hope was especially successful in improving boys' school
performance and behavior.
   The evaluation produced its share of puzzles. New Hope offered a
cafeteria of benefits from which participants could pick and choose--a
feature that allowed people with diverse family routines, needs, and cir-
cumstances to tailor the program to their situations. Although most peo-
ple claimed wage supplements and other benefits at some point, few of
the participants took advantage of all of the benefits all of the time. In
any one month, fewer than half of the participants qualified for benefits.
One in eight never used anything offered by the program.
   The survey and the family stories from our intensive interviews
helped to solve some of the puzzles and to identify who was helped,
who was not, and why. The New Hope offer made a big difference for
some people but it was not a good fit for everyone. Some parents refused
to entrust their children to the care of someone other than a family mem-
ber. Many parents worked evenings and weekends, when few child-care
centers or licensed home settings were available. The child-care subsidy
was therefore of little use to them.24 Others had personal difficulties that
kept them from regular work. The vagaries of low-wage jobs also made
it difficult for some people to use the New Hope benefits. Some had
irregular and unpredictable work schedules that did not allow them to
meet the thirty-hour weekly work requirement.25
   The lessons learned from the evaluation can help states and localities
design public policies that support both work and family life in low-
income families. People have different needs and capabilities that good
policies can accommodate; there is no panacea for the problems of pov-
erty. People use public programs in the context of their existing re-
sources, everyday routines, and family demands. No matter how well
intentioned and otherwise well designed a policy is, it must fit the con-
text of people's lives to make a difference. Adults who applied for New
Hope were already trying to make ends meet, to sustain a family routine,

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HIGHER GROUND

and to provide some moral direction for their children and their lives.
New Hope, if it were to make a difference, had to contribute to these
family routines and goals. Our evidence suggests that it did so for most
people, but not for all.
   New Hope was a small, experimental program run in a state with a
booming economy and a culture of work-focused welfare reforms. De-
spite its considerable successes, one might doubt that a small program
developed and run by a dedicated community coalition could serve as a
model for state bureaucracies to replicate.
   We argue that it can be done. While New Hope was in operation,
Minnesota and two Canadian provinces were testing welfare models that
shared some of its key features, particularly earnings supplements. Min-
nesota's program emphasized training caseworkers to support work ef-
forts rather than simply to process assistance claims. Both Minnesota and
Canada evaluated their programs using the same kind of lottery process
as the one New Hope used. Both produced strikingly similar impacts--
more work, less poverty, and higher child achievement.26
   In an era when we require public programs to demonstrate that they
are achieving program goals and to be cost-effective as well, a New
Hope­type work-support program stacks up very well. It accomplished
the goal of increasing full-time work while lifting workers out of pov-
erty. Moreover, with its positive effects on children's achievement and
behavior, it shows real promise for breaking the cycle of poverty for a
sizable number of families in the next generation.




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