Monday, 19 June 2023 08:02

The Welfare-to-Work Industrial Complex

President Bill Clinton speaks about welfare reform at Vanderbilt University Medical Center in Nashville, Tenn., in October 1996. Credit: Paul J. Richards/AFP via Getty Images

How “work requirements” spawned a lucrative industry profiting off people in need.

“Get a job!” That sums up our current cash welfare system in a nutshell. Ever since so-called welfare reform in the 1990s, the system has been based on the idea that welfare recipients must be doing some kind of work or job-readiness activity to receive government assistance. It’s a system that plays on what Americans have long wanted to believe – that all it takes to move out of poverty is a can-do attitude and hard work.

Now, there is a growing chorus of politicians who argue that even more programs that help people in need should have more and tougher work requirements attached. Recently, Republicans successfully fought to create new work requirements for food assistance under the debt ceiling deal.

In this episode, Reveal partners with The Uncertain Hour podcast from Marketplace to explore the lucrative industry built on welfare-to-work policies. Critics say these for-profit welfare companies have cultivated their own cycle of dependency on the federal government. Krissy Clark from The Uncertain Hour takes listeners into America’s welfare-to-work system.

We meet a struggling mother of two in Milwaukee who hits hard times and turns to a local welfare office for help – a welfare office outsourced to a private for-profit company. Inside, staff preach the power of work, place people into unpaid “work experience” and enforce work requirements for welfare recipients, all in the name of teaching self-sufficiency. But who’s set to benefit most, that struggling mother or the for-profit company she turned to?

Then, Clark has a frank conversation with the founder of America Works, one of the first for-profit welfare-to-work companies in the country.

Dig Deeper

Listen: A Welfare Check (Reveal)

Listen: Minor League Pay (Reveal and The Uncertain Hour)

Listen: More from The Uncertain Hour

Watch: Behind the Scenes of The Uncertain Hour (Marketplace)


Senior correspondent: Krissy Clark | Senior producer: Caitlin Esch | Producer: Peter Balonon-Rosen | Editor: Michael May | Assistant producers: Marque Green and Grace Rubin | Data reporting: Elisabeth Gawthrop and Ben Clary from APM Research Lab | Research and production assistance: Marque Greene, Tiffany Bui, Muna Danish and Daniel Martinez | Scoring and sound design: Chris Julin | Engineering: Jayk Cherry | Fact checker: Betsy Towner Levine | Special thanks to Catherine Winter, Nancy Farghalli, Curtis Gilbert, Donna Tam, Reema Khrais and Hayley Hershman | Production manager for Reveal: Steven Rascón | Engineering for Reveal: Claire Mullen, Fernando Arruda and Jim Briggs | Editors for Reveal: Brett Myers and Katharine Mieszkowski | Interim executive producers for Reveal: Taki Telonidis and Brett Myers | Digital producer for Reveal: Nikki Frick | Host: Al Letson

Support for Reveal is provided by the Reva and David Logan Foundation, the John D. and Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Ford Foundation, the Heising-Simons Foundation, the Hellman Foundation, the Robert Wood Johnson Foundation, and the Park Foundation.


Reveal transcripts are produced by a third-party transcription service and may contain errors. Please be aware that the official record for Reveal’s radio stories is the audio.

Al Letson: From The Center for Investigative Reporting and PRX, this is Reveal. I’m Al Letson. Last month when Congress was debating how to keep the country from defaulting on its debts, one of the sticking points was over work requirements. Should more people be put to work in order to receive government aid? Republicans successfully fought to create new requirements under the debt ceiling deal, but this idea of tying work to aid has bipartisan roots
Speaker 2: From now on, our nation’s answer to this great social challenge will no longer be an never-ending cycle of welfare. It will be the dignity, the power, and the ethic of work.
Speaker 3: I’m proposing that every state be required within five years to have 70% of welfare recipients working, work.
Speaker 4: It’s a pretty simple concept.
Speaker 5: It’s time for all Americans to get off of welfare and get back to work. You’re going to love it.
Al Letson: It was President Clinton who first signed work requirements into federal law back in 1996 under so-called welfare reform.
Speaker 2: Today we are ending welfare as we know it, but I hope this day will be remembered not for what it ended, but for what it began.
Al Letson: But does requiring work, work? Our partners at The Uncertain Hour podcast from Marketplace have spent years investigating. Their new season looks at what work requirements actually mean for people receiving cash welfare and who these policies, profit, I mean really profit. Here’s The Uncertain Hour’s Krissy Clark.
Krissy Clark: I’ve spent a fair bit of time in the last few years getting tours of for-profit welfare offices like this one in Milwaukee, Wisconsin, where a video of a corporate motivational speaker is beaming down on me from a TV screen in the lobby.
Speaker 7: Look yourself in the eye, and with excitement and enthusiasm, say, “I love my job because they pay me for working there. I love [inaudible].”
Krissy Clark: If you’ve never heard of a for-profit welfare office before, me neither, until I started reporting this story. But back when Congress passed so-called welfare reform in the 1990s and made work a requirement for getting certain types of government aid, that same law also allowed the government to turn to private companies to implement and enforce those work requirements. Ever since, offices like this have popped up all over the country.
Speaker 7: Tomorrow morning, get back in front of the mirror and repeat the process again with excitement and enthusiasm. “I love my job because [inaudible].”
Krissy Clark: This office I’m in with the motivational video droning in the lobby, it’s run by a multi-billion dollar multinational company called Maximus. Since the nineties, one of the things Maximus has helped governments with is to run welfare offices in more than a dozen states. This one here in Milwaukee has turned into something of a cathedral for the glory of work, a cathedral with fluorescent lighting and cubicles and TVs.
Speaker 7: Everything really does begin with you.
Krissy Clark: Maximus and companies like it have over the years received hundreds of millions of government welfare dollars for running welfare to work programs and ideally getting people out of poverty and into jobs, including this person.
Quanesa Simpson: Quanesa Simpson. I’m 21. Of course, I stay in Milwaukee, Wisconsin.
Krissy Clark: I met Quanesa on my first tour of Maximus back in December 2019. She has big hoop earrings, long braids, and a big smile. When she first applied for welfare, she didn’t know she was going to be interacting with a private moneymaking business. She just applied for government aid, and the state of Wisconsin sent her here, to this bland Maximus office building. By the time I’d met her, she’d been part of the program for almost two years.
And what are you doing here today?
Quanesa Simpson: Today I’m having a meeting with Delonte. We’re going over my resume and kind of trying to move forward to see kind of where I want to go as far as a job.
Krissy Clark: Delonte is Delonte Carter, black turtleneck, close, cropped hair. He works for Maximus as a job developer, trying to help people like Quanesa find work so they don’t need welfare anymore. When I drop in, there are drafts of Quanesa’s resume fanned out on Delonte’s desk, and he’s helping her with the struggle that’s faced job applicants across the ages, how to get a resume down from many pages to one.
Delonte Carter: I think that was the main thing when she had came. She’s like, “Okay, this is what I have, and I know we can tweak it.” This resume is definitely going to be that first stepping stone in getting her connected to some really good opportunities.
Krissy Clark: You’re nodding.
Quanesa Simpson: Oh, I was like, “Mm-hmm. Exactly right.”
Krissy Clark: Quanesa tells me she first turned to welfare, what’s officially called Temporary Assistance for Needy Families, for the reason a lot of people do. She was poor, couldn’t support her family on her own and had nowhere else to turn. Her tipping point came after her second child was born. She’d had trouble finding a job when she was pregnant, and she didn’t have a permanent home. She and her kids were temporarily doubled up with the mother of her baby’s dad.
Quanesa Simpson: It was very hard. I didn’t have an income to provide for a newborn baby. I really didn’t have a stable home with not working a stable job. So it was kind of like, I need this now, you know?
Krissy Clark: For Quanesa, it was unstable housing with a newborn baby. For others, it could be domestic violence, the death of a family member. The list goes on. When you don’t have personal savings or family to turn to, welfare is the system we’ve designed to catch people when they fall, a system that’s supposed to help people get to a more stable place through employment so they don’t fall so hard again, which is what this meeting Quanesa’s having today at Maximus is all about. Delonte, the Maximus worker, is helping her tailor her resume into something that can hopefully help jumpstart a career.
Can you show me your resume and-
Quanesa Simpson: Yes. You want me to start reading it for you?
Krissy Clark: Yeah. So at the top we’ve got your name. Quanesa’s first draft had been pretty informal. Below her name she’d written, “I’m in need of a new start to provide for my family. I’m very flexible, caring, patient, and of course, hardworking.” Delonte punches that up into an objective statement. Quanesa reads it to me.
Quanesa Simpson: Objective: to obtain a position which allows me to utilize my skills to adequately assist individuals with day-to-day living needs, including home healthcare and cleaning services.
Krissy Clark: Delonte condenses a little more here, cuts a few lines there, and they look the new version over.
Quanesa Simpson: The black and white on the paper, it’s about me, but Delonte, all this format, he did that, so I appreciate that as well. Delonte helped me a lot.
Krissy Clark: Delonte hands her a printout of the new one-page version of her resume.
Delonte Carter: So this is going to be yours. We’re going to act like this one didn’t even happen.
Krissy Clark: He throws the old resume in the trash.
Delonte Carter: Nice. So yeah, we’re excited. We’re excited to see where this is going to go.
Krissy Clark: For Maximus and the people who set me up on this tour, Quanesa’s resume is an example of how the company has helped set her on a path out of poverty and towards self-sufficiency. But there was this one detail I noticed at the bottom of Quanesa’s resume, a detail that when I looked at it closely, made me wonder how much Maximus Welfare to Work program really helped Quanesa or whether Quanesa would’ve done just as well without it. It’s a detail I kept thinking about that would take me on a reporting journey that would eventually cast doubt on some of the claims these private companies make and doubt on the whole welfare to work model that our country’s long embraced. Does it actually help people escape poverty, or have the private companies that increasingly run our welfare system created their own cycle of government dependency?
Katheedre’ Sea: So if you can kind of look at our board, it basically starts off… Everything starts off with a dream.
Krissy Clark: Everything starts off with a dream. That’s the message we’re all here to learn. I’m going to get back to Quanesa’s story in a bit, but first I want to give you more of a tour of Maximus. Down the hall from where she was having her meeting, there was a class Maximus was running. When I stop in, a Maximus employee named Katheedre’ Sea is standing in front of a whiteboard with a flow chart. It starts at the top with the word “dreams” in big pink letters. It ends at the bottom with a bunch of green dollar signs. She’s explaining the steps in between.
Katheedre’ Sea: We all have a dream from whether it’s little, whether we get older, and then we make those dreams, we turn them to goals.
Krissy Clark: Cathedral’s talking to a few women sitting around some desks. The women are quiet. The expressions on their face seem caught between cautiously interested and suspicious. They’re here in this conference room listening to Katheedre’s lecture because they have to be here according to federal law.
Katheedre’ Sea: So we got dreams. After that, we make it into a goal. After that, we change it into a plan.
Krissy Clark: Each woman here in this class today is a mother who is poor. Each woman here applied for Temporary Assistance for Needy Families to make ends meet. And to get that help, each woman here has been required to come to this conference room five days a week for up to four weeks to take this class called Career Pathways. The goal of the class and pretty much everything Maximus does for the welfare system is to motivate, prepare, and get these welfare participants into a job. That’s the priority, ASAP.
Katheedre’ Sea: What basically we’re doing right now is we’re filling out a form about their goals and what they want to kind of go into.
Krissy Clark: Katheedre’s passed out some papers to her welfare students, worksheets with prompts. What’s my dream job? What do I want to be doing in five to 10 years? I wasn’t allowed to use the women’s names for privacy reasons, but a few of them shared their answers with the group. First, a woman in a thick brown winter coat lined with fake fur, because it’s December in Milwaukee.
Speaker 11: I want to be a nurse, so I’m going to go into the RN program. That’s my main goal.
Krissy Clark: Then another woman. Despite the cold, she doesn’t seem to have a coat with her, just a black hoodie.
Speaker 12: Basically, my dream is to go to college and put the position behind myself where my baby will always have something to fall back on.
Krissy Clark: Go to college, become a nurse, get to a place where my family will always have something to fall back on, the kinds of dreams America loves to tell stories about and that usually takes some time and patience and education to achieve.
Joe Murphy: You guys are in the right place.
Krissy Clark: A man with a trimmed goatee and a dark pinstriped suit has been hovering in the doorway as I sit in on this class. His name is Joe Murphy, and he helped design this work readiness curriculum. Joe is a vice president at Maximus. Joe flew here from Atlanta to meet with me and kind of chaperone my visit. We dropped into this class to observe it, but now that he’s here, he can’t pass up the chance to talk directly to some of these women. He walks to the middle of the room and turns to the woman in the black hoodie.
Joe Murphy: And I see you have great opportunities. You have a child, right?
Speaker 12: Yes.
Joe Murphy: Okay. How old’s your child?
Speaker 12: She’s two.
Joe Murphy: So you’re a mom. You’re taking care of your little child. So that’s your whole life right there too, right? So you’re trying to change your life and make it better for her. I heard you say that. That’s an encouraging thing. You want to be an example for your child, right? Exactly.
Speaker 12: More so a role model than anything.
Joe Murphy: A role model is important. That’s how we learn. So keep on doing that. Don’t stop.
Krissy Clark: Joe’s a big believer in the power of a motivated individual to climb out of poverty with a job. That’s what the whole welfare system is based on today, the idea that welfare needs to emphasize work and require work so people can move from a welfare check to a paycheck, as Bill Clinton liked to say.
Joe Murphy: And you need is a hand up because you guys are strong. I can see, right? You guys are strong and you guys can do almost anything. You just need to be guided in the right direction sometimes. Remember, the goal is self-sufficiency.
Krissy Clark: To make these participants more self-sufficient, this class will go over job interviewing strategies and the importance of punctuality, the difference between business casual and formal business attire. There will be diagrams and more worksheets and flow charts, advice on what employers are looking for in an applicant.
Joe Murphy: I’m finding more employers today, just so you know, are looking for people with a positive attitude, a can-do attitude. You know where I was this morning? I was having coffee, reading inspirational things. I do that every single day. Because where I came from, I’m hardwired to drift negative. Does that make sense? So I work every single day to stay positive. It’s hard because if I take my hands off the steering wheel, my car will go into the ditch. Is that helpful?
Krissy Clark: As skeptical as some of these women seem to be when I first entered the conference room, it’s hard to ignore Joe’s energy.
Joe Murphy: I see you taking notes. I see you’re left-handed like I am. Okay.
Krissy Clark: Joe is making connections with the women now. He tells them his family received food stamps when he was a kid. Eventually, he went to college, business school, became a consultant on Wall Street, and now a vice president here at Maximus.
Joe Murphy: You can become anything you want to become, and do not let anybody tell you you can’t become something because that keeps you down.
Krissy Clark: You can’t really talk about welfare without talking about race. So I should probably point out, Joe is a white man. I’m a white woman, and most of the other women in this room are black in one of the most segregated cities in America. Meaning mileages may vary on how easy it is to become anything you want to become.
Joe Murphy: What doesn’t kill you, makes you stronger, right? And that’s a true statement.
Krissy Clark: Now, Joe’s handing out motivational aphorisms about hard work like candy.
Joe Murphy: The demon we swallow… I can’t remember who said that. The demon we swallow makes us stronger.
Katheedre’ Sea: I preach that all the time.
Krissy Clark: Katheedre’, the Career Pathways teacher, jumps in again. They’re on a roll. Katheedre’ talks about how she was once a welfare recipient herself.
Katheedre’ Sea: Regardless of where you come from, what you’ve been through, you can do it. I was in this very building two years ago and filled out an application because I was encouraged, and I got the job. So it comes back to me. Like the ladies come back into the classroom, “I did this. I got a job.”
Joe Murphy: You just hit on it. When somebody comes back in and got the job when they thought they couldn’t get the job, and they jump up in the air… Because I was in one program in New York City, the lady did a jump that I’ve never seen before. She said, “I got the job.” That is exciting. Another person, she was literally crying because she got the job. I was crying because it made everybody around her start to cry. She said, “You know how long I’ve been looking for a job? Three years, and nobody helped me.” So that’s the satisfaction we get as providers of these programs. People don’t understand, it’s steps or rungs on a ladder. So how do we help them get to the right ladder and climb the ladder?
Krissy Clark: At this point, there’s a genuine feeling of uplift in the room.
Joe Murphy: I like the smiles. Look at the smiles.
Krissy Clark: This gospel of work that Joe’s preaching, it sounds so good. It’s part of the American dream, that no matter where you come from, if you work hard and have the right attitude, you can do anything. But when I eventually sit down with Joe and some of his colleagues that same day, I start to get a very different picture. The thinking behind handing welfare over to companies like Maximus was that they could do better than government bureaucrats at getting people into jobs because they already had a business mentality themselves.
Joe Murphy: We look from the perspective of the employer. We look at the employer as a customer.
Krissy Clark: Joe’s colleague, Ric Ybarra, explains to me that a big part of what Maximus does is work with local employers to find out what job openings they have and then help fill those jobs with welfare recipients.
Ric Ybarra: We serve as an extension of their HR, essentially
Krissy Clark: An extension of their HR because Maximus is actively recruiting people to work for those employers rather than the employers having to do it themselves or pay a staffing firm.
Ric Ybarra: Employers across the country, they need people. They need to fill the pipeline with talent.
Krissy Clark: But Ric is quick to point out, the job pipelines that Maximus specializes in filling, they’re for pretty low skilled work.
Ric Ybarra: If it’s an employer that’s looking for high-level talent, accountants and MBAs, we’ll be honest, that’s not the participant base that we have.
Krissy Clark: Most adults who receive cash welfare are mothers, often without college or even high school degrees. And the way things have been set up since welfare reform, it’s hard to attend college or even get vocational training that lasts more than a year while still fulfilling all the program’s work requirements. College classes often don’t count as work. Ric and his staff, they mostly pitch their services to companies with a lot of entry level positions: customer service, home health aide, packing and assembly work in warehouses, jobs that don’t pay much. Ric says those kinds of jobs are a great first step for Maximus as welfare recipients, or what Ric calls his talent pool.
Ric Ybarra: By employers coming through us, now they’ve opened the door to a talent pool that they hadn’t necessarily looked at previously that looks like it has the makings of really filling your talent needs.
Krissy Clark: But as I listened to Ric and Joe make their pitch about serving up welfare recipients to worker-hungry businesses and setting them up into low skilled, low wage jobs, it was hard to square that with the motivational pep talks I’d heard Joe giving in that class he took me to. This version had less to do with helping poor mothers achieve their dreams. It was about serving a completely other set of interests, local and national businesses that need workers. I kept thinking to myself, what’s welfare actually for?
Al Letson: Can welfare really serve both worker-hungry businesses and people in need? When we come back we find out what did Maximus really do for Quanesa? You’re listening to Reveal.
Al Letson: From the Center for Investigative Reporting and PRX, this is Reveal. I’m Al Letson. Today, we’re partnering with our friends at the Marketplace podcast The Uncertain Hour. Their new season takes a deep look at the private companies that benefit from welfare. Reporter Krissy Clark picks back up in Milwaukee, Wisconsin at an office of the for-profit welfare company, Maximus. She’s with a woman whose case the company says exemplifies the kind of job help they offer to welfare recipients.
Speaker X: Oh, okay. Hey. Okay.
Krissy Clark: Hi. Yes. Hello.
Ric Ybarra: So I mentioned that we had arranged… We have pre-approval to meet with a program participant, Ms. Simpson-
Quanesa Simpson: Hi.
Ric Ybarra: … and one of our job developers, Mr. Delonte Carter. I’ll let Ms. Simpson, whatever you’d like to speak to in terms of your experience with the program, where you are now, what you went through.
Krissy Clark: So remember Quanesa from the beginning of this story? The way I got to sit in on her meeting with Delonte was because Ric and Joe from Maximus had specially arranged it for me to get a glimpse into the job services they provide their welfare clients. So what did Maximus actually do for Quanesa? Quanesa told me that when she came to Maximus and first started getting her welfare check, the money on its own helped a lot. She was getting $653 a month in cash assistance, more than the national average for a family of her size, but still not much to live on. She also qualified for other government help, like food stamps and health insurance, and she says she spread whatever help she got as far as she could to meet the needs of her two kids.
Quanesa Simpson: I was finally able to get a place, so my light bill, my children. So yeah, it was helping a lot.
Krissy Clark: But the welfare check, that comes straight from the government. As for the help that Maximus itself provides, that’s where things get murkier. When someone like Quanesa applies for welfare at Maximus or anywhere in Wisconsin, one of the first things that happens, a lot of questions and assessments to gauge the person’s quote, “employability,” how immediately employable you are will determine what kind of work activities you’ll be required to do to get your welfare check. The only way to get your full welfare check is to prove you did all your required work activities for the required number of hours, typically 40 hours a week. You might be assigned to go to that career pathways class to begin with, to learn how to be, quote, “job ready.” You might be assigned to apply for jobs and turn in documentation for each job you applied for. Delonte, the Maximus worker who was helping Quanesa with her resume, he explains that another kind of work activity that’s common for welfare participants is called work experience.
Delonte Carter: So like when Quanesa came in, I was able to help her get into a work experience placement.
Krissy Clark: Basically unpaid work you’re required to do at a local business or charity to earn your welfare check. Quanesa’s Work Experience was doing mostly janitorial work at a food pantry and community center.
Quanesa Simpson: I worked in the pantry, the office, cleaning.
Krissy Clark: She had to put her baby in daycare while she was doing the work. Maximus connected her with a government program that helped pay for childcare. Quanesa says at some points she was assigned to 40 hours a week of work experience at the food pantry. If you divide that into her $653 welfare check, she was essentially making just around $4 for each hour of required work activities she was performing, way less than minimum wage. But Quanesa was determined to make it work.
Quanesa Simpson: I pushed so hard for a $653 check. For 40 hours a week, I’m like, “I can do this.”
Krissy Clark: And all that mandatory labor for such little money, it had a larger goal according to Delonte. He says these work experience placements are all about helping welfare participants get more experience to put on their resume, kind of like an unpaid internship for being a janitor.
Delonte Carter: She can gain more skills so she can be more employable.
Krissy Clark: And six months later, she got an actual paying job through a company that Maximus works with to provide talent for their pipeline.
Quanesa Simpson: Yeah, I got the job and I was just so happy. Yeah.
Krissy Clark: And what was it for?
Quanesa Simpson: Clean Power.
Krissy Clark: Clean Power?
Quanesa Simpson: Yeah.
Krissy Clark: This job was also in cleaning. She’s a custodian at a physical therapist’s office.
Quanesa Simpson: I just clean, take the garbage and wipe down equipment, dust my floors. It’s pretty simple work, and I’m thankful for it.
Krissy Clark: The job started at $13 an hour for four to five hours a day. Sometimes she filled in as a supervisor and got a dollar an hour more. And because of the way welfare works, once Quanesa got this part-time paying job, her monthly welfare check got reduced to just a couple hundred dollars, then to $50. At the job she was making somewhere between about a thousand and $1,400 a month, more than she ever got on cash assistance, but still not enough to put her family over the poverty line.
Quanesa Simpson: Delonte was just telling me it’s all about growth. So if I can work harder to get more, then that’s what I would do, definitely.
Joe Murphy: I might ask a question.
Krissy Clark: Joe Murphy, the Maximus VP and my chaperone, jumps in.
Joe Murphy: I heard how much money you’re making after taxes and all that. That’s good. That’s good for you. Congratulations. And how do you feel that now that you’re going to work? Do you feel good about yourself?
Quanesa Simpson: I feel good. I love going to my job. I’m ready, I feel like. Just being able to know that I’m working hard for everything that I receive and being able to do more month to month, take my kids to the zoo or just different activities that I couldn’t do before. So yeah.
Joe Murphy: Do you feel good about yourself?
Quanesa Simpson: Definitely, yes.
Krissy Clark: I can feel Joe going into motivational speaker mode again.
Joe Murphy: And you know what I’m hearing from you? This is what I’m hearing you say. “I know that if I work hard, if I work harder and I become better, I can make more.” Did I hear you say that?
Quanesa Simpson: Definitely yes because that’s what I’m looking forward to doing.
Krissy Clark: And in fact, that’s part of why Quanesa’s here today, to figure out how to make more money.
What’s your dream job?
Quanesa Simpson: My dream job? Oh my God. So I’m kind of considering if I want to… I know I want to further my education. The first thought was to be a LPN, a licensed practical nurse.
Krissy Clark: She recently got trained as a certified nursing assistant, a CNA, in a short term program through Maximus. So she knows how to feed and bathe patients, help them use the bathroom. But that’s grueling and pretty low paying work too. She’d need a lot more training to become a licensed practical nurse. So she’s here meeting with Delonte to figure out her next steps in the meantime. Delonte and Joe seemed to be earnestly rooting for Quanesa, and from a certain angle, the help Maximus had given Quanesa seemed clear. Since she’d applied for welfare, she’d earned her GED, gotten trained as a nursing assistant, gotten some work experience, a job, and now some resume coaching for an even better job. But here’s where that moment happened that I played you at the beginning of this episode, when Delonte Spruce Quinn’s resume up, got it down to one page and threw the old version in the trash.
Delonte Carter: We’re going to act like this one didn’t even happen.
Krissy Clark: That’s when I noticed that detail near the bottom of her resume. It was on all the different versions. And like I said, it suggested a more complicated story. In the part where she’d listed her professional experience, one of the oldest entries, from June 2017 to June 2018, was her working for a local company as a cleaner.
Quanesa Simpson: I was cleaning Airbnbs, so that was in 2017. So that was a while ago.
Krissy Clark: Which was a little confusing to me because that would’ve been before she was on welfare. And I’d thought that part of what I’d just been told was that one of the key things Maximus had helped Quanesa with was to get her valuable work experience to build her resume, that that’s what all that unpaid cleaning she’d had to do at the food pantry to get her welfare check was supposed to be about. I thought maybe I was getting the timeline confused. Maybe she had gotten that cleaning job through Maximus too while she was on welfare, which in Wisconsin is called W2.
Was that through W2?
Quanesa Simpson: No.
Krissy Clark: No, that was its own thing.
Quanesa Simpson: Yeah, that was the year before that, it says, yeah.
Krissy Clark: Okay. So she’d had that cleaning job before she went on welfare. And then there was another job I noticed on her resume, also before she was on welfare, where she also did cleaning at an assisted living facility.
How did you find those jobs?
Quanesa Simpson: Friend of the family or something like that.
Krissy Clark: So as excited as Quanesa was when she got her current cleaning job through Maximus, after she’d done hours and hours of mandatory unpaid work experience as a cleaner, I started wondering what exactly Maximus’s work programs were actually doing in the midst of all this. Were they giving her the help she needed the most? As Quanesa’s resume was making clear, she’d already gotten multiple other jobs before she’d crossed paths with Maximus, low paying, precarious jobs, doing cleaning and caregiving work that had left her without any personal safety net. That’s part of why she turned to welfare after her son was born. And now after going through Maximus’s Welfare to Work program, Quanesa seemed to be doing similar work to what she’d done before she was on welfare. It paid a little better, but not much. Didn’t offer health insurance. She still qualified for food stamps and state medical benefits. Maybe Ric and Joe, the manager and VP from Maximus, could tell from my face that my brain was churning through all this as we talked. Ric quickly spoke up.
Ric Ybarra: So one of the points that I wanted to kind of interject here is, as Ms. Simpson has indicated, we were able to connect her with an employer that’s hiring and that’s offered her a position and she’s doing great there. However, just because she now has employment, our services don’t stop there. And that’s the purpose of this meeting, is Ms. Simpson has trained in the healthcare sector as a CNA. So our goal is, even though she’s working now, is to get her connected to her career pathway of choice. So while the employment is a very good thing to have right now, it’s not that long-term goal.
Krissy Clark: Ric and Joe soon ushered me out of the cubicle where Quanesa was having her meeting. But after we left, Ric had more to say about all the good things Maximus was going to help Quanesa achieve.
Ric Ybarra: Yeah, it isn’t just the first job and out. It’s this job and up. And the participants that we’re working with are made well aware of the fact that once you’re connected to employment, it doesn’t stop there. That’s a new beginning, and that’s a new beginning on hopefully an upward track that’s going to lead to even greater things.
Quanesa Simpson: Hello?
Krissy Clark: Hi, is this Quanesa?
Quanesa Simpson: Yes.
Krissy Clark: Recently I caught back up with Quanesa to see where she is now. It’s been more than three years since I first met her. A pandemic happened in between. She left welfare, but her dream job in nursing, she tells me that didn’t work out. She stayed at that custodian job at Clean Power for a couple years. She got a small raise, was eventually making between 14 and $16 an hour depending on the shift. But she could never get more than part-time hours, so she relied on food stamps, state health insurance to make ends meet. The job was far from her house, and when her car started having trouble, and it couldn’t get her to work reliably, she had to leave that job at Clean Power. She went back on welfare at Maximus.
Her required work activity this time was unpaid work experience at a childcare center. Eventually, she got hired on there as an assistant teacher, so she left welfare again. She says the childcare work is decent. She gets $16 an hour, still no benefits. She needed more to support her two kids, so she got another job as a cashier at Dollar Tree for 13.25 an hour.
Quanesa Simpson: I work 40 hours for the childcare, and then for Dollar Tree, I do about 26 hours.
Krissy Clark: Oh my gosh. 40 hours a week at the daycare and then 26 hours on top of that a week?
Quanesa Simpson: Yes.
Krissy Clark: That’s a lot of hours.
Quanesa Simpson: Yeah, I’m just… Right now, I got to go, and I’m trying to push through to make it to that so I can do what I need to do.
Krissy Clark: She and her kids still have to rely on state health insurance. She’s making less than $4,000 a month working 66 hours a week. Still, when she looks back at her time on welfare with Maximus, she says she appreciates it.
Quanesa Simpson: I’m just thankful for everything that I got out of it.
Krissy Clark: But here’s something I didn’t learn until after I’d visited Maximus in 2019, something my producers and I discovered much deeper into our reporting, after we’d obtained hundreds of government records that gives all this more context. Maximus got something out of Quanesa too. According to the contracts the state of Wisconsin has with the private companies that now run many of its welfare to work programs, when one of their participants gets a job that lasts at least a month and meets certain basic requirements, the state rewards the contractor with a special payment called a performance outcome payment.
And when Quanesa stayed at her first job for more than three months, Maximus could have gotten another payment. And later, when Quanesa ended up back on welfare with Maximus and then found another job that lasted more than three months, the company would’ve qualified for even more performance payments. Because of how these welfare contracts work, Maximus could have claimed altogether about $11,000 based on Quanesa getting those jobs, paid to Maximus with taxpayer money. And that was for just one person.
In the last 10 years, the state of Wisconsin has paid Maximus over $7 million just based on these kinds of performance outcome payments according to our analysis of state records. Other private welfare companies, non-profit and for-profit, have also taken in many millions of dollars in these performance payments over the years. And that performance outcome money is on top of the tens of millions of dollars the state has paid companies to cover the costs of just administering the welfare program, processing applications, assigning and enforcing required work activities, offering job readiness classes.
I should say, these performance payments have a goal that makes sense in theory. They’re supposed to incentivize contractors to help get people jobs and to help get jobs that last for at least a few months. But what exactly have these companies accomplished for all that money? Well, in the case of Maximus and Quanesa, Quanesa says the company’s Welfare to Work program gave her more confidence looking for jobs. She learned a ton from Delonte’s resume advice. And she did find employment while she was going through the program.
But still, the first job she got through Maximus was doing the same kind of work she’d already been doing before she came to Maximus, work that paid so little and offered so few benefits she still relied on food stamps to get by, work that left her financially unstable enough that when her car broke down, she had to leave her job. And the second time she went through Maxim’s program, the job she got paid little enough that she has to work two jobs, and her family still has to turn to the government for health insurance.
When my producers and I tried to follow up with Ric and Joe from Maximus about all this recently, neither agreed to another interview. In a statement, Maxima said the company, quote, “Does not create policies. We implement state programs that are established by state and federal laws and regulations.” The company said on top of helping people find and retain jobs, it helps families become more stable and self-sufficient by securing childcare, transportation, housing, and other services.
I also reached out to the state agency that oversees welfare in Wisconsin. A spokesperson told me by email that the current administration plans to perform a formal evaluation of the program to formulate recommendations for changes before the next contracts with private welfare companies start in 2025. I also asked Quanesa about this setup when I talked to her on the phone recently. I told her that Maximus was a for-profit company that makes billions of dollars in revenue, that a whole lot of that money comes out of government coffers, and that some of that money came directly from managing welfare cases like hers. I told her that, based on the state records I obtained, if you calculate how much government money Maximus got for managing just Quanesa’s case and helping her find those jobs, Maximus looks to have gotten about as much money, if not more, than Quanesa. She thought about this for a moment, said she wasn’t too surprised. That’s what businesses do, try to make a lot of money, and ultimately, that’s what she was trying to do.
Quanesa Simpson: When I was there, I was working on myself and trying to get myself together to better my family, and that’s what I did.
Krissy Clark: And Quanesa’s still trying to do that for herself and her two kids by working two jobs, more than 60 hours a week.
Al Letson: There’s not much evidence that Welfare to Work programs help people find financial stability, whether those programs are run by private companies or governments. In the early 2000s, the Rand Corporation looked at a lot of studies of these programs and found that in the long run, most welfare to work participants don’t earn enough money to stay above the poverty line. And a recent study from Mathematica came to a similar conclusion. It found that, quote, “The existing evidence is clear. These programs are mostly not effective at improving the economic independence of welfare participants.” Coming up, Krissy talks to the founder of a for-profit welfare company. That’s next on Reveal.
Al Letson: From the Center for Investigative Reporting and PRX, this is Reveal. I’m Al Letson. On today’s show, we’ve heard how a lucrative industry has grown up around managing government welfare programs. And after years of investigating these companies, reporter Krissy Clark from our partners at The Uncertain Hour wanted to get their reaction to what she’d found. Here’s Krissy.
Krissy Clark: I really wanted to talk to someone high up in one of these major for-profit welfare companies to ask them more about their business models and these performance outcome payments and what they had to show for their welfare to work programs. I spoke with Joe, that Maximus vice president, early on, but the company declined my requests for a follow-up interview with him. I had better luck with America Works. It’s a privately held for-profit welfare to work company that, like Maximus, also operates in Milwaukee. Altogether, it runs about 30 offices in 17 states. The founder of America Works, a guy named Peter Cove, agreed to talk to me over Zoom.
Peter Cove: Oh, there you are. Nice to meet you Krissy. Oh, you have such a pretty face. [inaudible].
Krissy Clark: Thank you. Well, before we go any further, I caught a glimpse of you before you turned off your video. Tell me about the mustache.
Peter Cove: Well, I’ve had it for about 60 years.
Krissy Clark: 60 years? Wow.
Peter Cove: At least that.
Krissy Clark: Peter Cove has long been a firm believer in the power of work and the power of facial hair. He’s got quite the prominent mustache of the handlebar variety, kind of a salt and pepper version of the Monopoly man. He’s also fond of bow ties. Today, Peter lives in a quaint town in Connecticut in a big white house, neatly landscaped. A vintage British motorcar sits in the three-car garage. It’s a lifestyle he’s funded by founding the company America Works.
Peter Cove: Which is the first for-profit welfare to work company in the United States.
Krissy Clark: And you put the for-profit right in that sentence. Why is that important to highlight?
Peter Cove: Because number one, we were the first to do that. And number two, we are the best.
Krissy Clark: The mission statement of America Works, it quote, “Changes people’s lives by lifting them from government dependence into the productive world of employment.”
Peter Cove: Pope John Paul II had an encyclical on work that if you deny a man a job, you deny them part of their spirituality. Work really does allow you to prepare and present who you are to the world.
Krissy Clark: You’re quoting the Pope. Are you religious?
Peter Cove: I’m Jewish, but that doesn’t mean I can’t quote the Pope. I mean they don’t make Jews like Jesus any longer.
Krissy Clark: Peter started America Works in the 1980s before cash assistance had mandatory work requirements or was allowed to be run by private companies. At first, America Works, helped government welfare offices find jobs for participants who were looking. Then in 1996, politicians from across the aisle came together for a full-blown retooling of welfare in America in the form of new legislation. And Peter says he was right there, helping shape policy.
Peter Cove: So you’d see our fingerprints in the bill on the fact that training programs were not what were going to be supported. They were going to support getting people into jobs. And you would also see our fingerprints on the work requirements. That meant that if you were able-bodied and you were on welfare, you had to go to work.
Krissy Clark: Under this brand new version of national welfare policy, welfare recipients would generally be required to start searching for work right away, and private business could be enlisted to run the welfare to work programs.
Peter Cove: So to me, that’s how we changed the whole dynamic of welfare to work in this country.
Krissy Clark: So began a wave of privatizing government welfare offices. And as a businessman, Peter smelled a business opportunity. I asked Peter what his elevator pitch was to lure governments to contract with him.
Peter Cove: All right. Going up on an elevator, and I got a minute.
Krissy Clark: Exactly.
Peter Cove: What we basically say to government is, “We will charge you for getting someone off welfare and keeping them off welfare for let’s say six months, in which time you are going to make back much of what would’ve been put out for keeping them on welfare.” And to the private sector, we say, “We’re going to bring you a worker who’s going to save you a lot of money.”
Krissy Clark: Right. And so do you think of yourself as serving… Who is your customer? Is it government? Is it employers?
Peter Cove: Both. Both government and employers.
Krissy Clark: What about the welfare recipient? Are they-
Peter Cove: I think of them more as the product of our company rather than customers.
Krissy Clark: So people are the products?
Peter Cove: I mean, yeah, of course. They’re inventory for us. They’re our raw product, our inventory. They come in, and we have to do something. With them and terminology may bother some people, but that’s in fact what we do.
Krissy Clark: And how much do you make off your inventory, off of your products?
Peter Cove: We make enough to stay in business. Our revenue runs between 40 and 50 million dollars a year. As a private for profit company, we had a bottom line. And so we said, “If we don’t succeed, we go out of business.”
Krissy Clark: But how do you measure that success? I ran Peter through some of the results we found in our analysis of data from the state of Wisconsin. From 2016 to 2021, America Works, the company he founded got on average $6.3 million each year from Wisconsin. During that time, based on our analysis, America Works had an average of about 1,700 people enrolled in their cash welfare program each year who were considered job-ready according to the state.
What’s realistic or what’s a good number for how many people would actually be getting jobs through America Works [inaudible]?
Peter Cove: I would say about two thirds.
Krissy Clark: So two thirds is almost 70%, but according to state data. In that time, America Works claimed job attainments for way less people than that. Roughly just 27% of the number of people deemed job-ready got jobs that lasted more than 30 days. 27%, so much less than two thirds, not even one third. What do you make of that?
Peter Cove: What do I make of that? That we’re not doing as well as I would hope we would be doing, that I would hope that we would be getting more people into jobs, and that it’s not easy in Milwaukee. We have a very entrenched welfare population there, and moving them from the rolls and off is not easy. And all I would say to you is we’ve got to do a better job there.
Krissy Clark: And the jobs that America Works claimed their participants had attained, none of them are necessarily even jobs you can support yourself or a family on. In order for a company to make a claim, the job only needs to earn you about $800 and last for a month. Meanwhile, America Works earned an average of a million dollars a year in rewards from the state for the fact that people on their caseload got those jobs. We reached out to current management at America Works about all this, but they didn’t respond to repeated requests for comment. And I should say, other private contractors besides America Works fared just about the same in terms of the number of job-ready people who actually got jobs. And then the kinds of jobs, how do you approach that?
Peter Cove: I believe in the dignity of work, and I believe that you get into the job and then you move up from that job. I want to see people take any job they can get, and then we’ll help them move up.
Krissy Clark: For-profit contractors love to say they only get paid for how well they perform, but a lot of the money the companies get is for other stuff. In 2022, the state paid America Works almost $5 million for managing about 2,000 welfare cases, for things like assigning and enforcing required work activities and providing people with required motivational job readiness classes. One way or another, these companies are earning money.
There’s that old joke about the couple who complains about a restaurant. The wife says, “The food is horrible.” And the husband adds, “And they have such small portions.” If you look at the track record of the welfare to work model, private contractors seem to be getting people into pretty bad jobs and not that many of them. But if we’re paying these companies millions of dollars in taxpayer money to help people climb out of poverty, shouldn’t what’s being served up be good and plentiful?
Al Letson: Thanks to the whole team at The Uncertain Hour for bringing us today’s show. I really cannot recommend their latest season enough. Listen wherever you get your podcast. Today’s episode was written and reported by the great Krissy Clark. Grace Rubin, Peter Balonon-Rosen and Krissy produced this episode. Michael May is the editor for The Uncertain Hour. Caitlin Esch is the senior producer. Brett Myers edited today’s episode for Reveal with help from Katherine Mieszkowski. Research and Production assistance from Marque Green, Tiffany Bowie, Muna Danish, and Daniel Martinez. Data reporting by Elizabeth Gotharp and Ben Clary from APM Research Lab. Betsy Towner-Levine provided fact check support. Special thanks to Katherine Winter.
Our production manager is Steven Rascón. Score and sound, designed by Chris Julen. Jake Cherry and Claire Mullen mixed today’s episode with help from Jay Breezy, Jim Briggs, and Fernando, my man, Yo Arruda. Our CEO is Robert Rosenthal. Our COO is Maria Feldman. Our interim executive producers are Brett Myers and Taki Telonidis. Our theme music is by Camarata Lightning. Support for Reveal is provided by the Reva & David Logan Foundation, the Ford Foundation, the John D. And Catherine T. MacArthur Foundation, the Jonathan Logan Family Foundation, the Robert Wood Johnson Foundation, the Park Foundation, and the Hellman Foundation. Reveal is a co-production of the Center for Investigative Reporting and PRX. I’m Al Letson. And remember, there is always more to the story.