Strategies for Family Economic Security
For many families, self-sufficiency cannot be achieved in a single step. It requires strategies that create ladders out of poverty—strategies that provide the assistance, guidance and time needed for families to become self-sufficient. Recognizing this, the WOW FES Project promotes Six Strategies towards Self-Sufficiency:
- Targeting Higher-Wage Employment
- Nontraditional Employment for Women
- Functional Context Education
- Microenterprise Training and Development
- Individual Development Accounts
- The Self-Sufficiency Standard
Targeting Higher-Wage Employment - Two Approaches
We can improve low-income individuals' access to higher-wage employment through two difference approaches: Sectoral Employment Intervention and Increasing Access to Higher Education
Sectoral Employment Intervention
Targeting high-wage job strategy, Sectoral Employment Intervention identifies well-paying jobs in growth sectors that lack trained workers, determines the wage needed by a worker to sustain her/his family (using the Self-Sufficiency Standard) and analyzes the job training and support services infrastructure necessary to move these individuals into these jobs.
Key components include engaging industry representatives, targeting training for specific jobs, and developing sensible outcome standards. Because this approach looks at labor market issues from both supply and demand perspectives, it helps communities strengthen their local economies while reinvesting in families and neighborhoods.
- Targeted training is necessary to help low-income clients access high-demand, high-wage jobs.
- Workforce development boards should establish and fund occupational information systems based on local- and regional-labor-market-specific data from which to select high-wage, high-demand jobs.
- By responding to business' specific labor needs, a high-wage job targeting strategy will improve a region's ability to attract and keep industries and to support a more thriving business climate.
Increasing Access to Higher Education
What it is and why it works
Education has always been a key to economic independence. Yet, low-income women's access to higher education has been limited and in its stead are polices that promote rapid attachment to employment or "work first". Increasing access to higher education as a targeting higher-wage employment strategy includes working around current restrictions, providing supports for low-income parents in college, and organizing to make policy change at the local, state and federal levels.
Nontraditional Employment for Women
Nontraditional employment for women is one high-wage option that can enable families to move out of poverty. Nontraditional Occupations (NTOs) are jobs that are often thought of as "men's jobs." According to the U.S. Department of Labor, they include any occupation in which less than 25 percent of the workforce is female.
Increasing women's access to nontraditional jobs is a compelling strategy for family economic self-sufficiency for several reasons. Most importantly, compared to jobs that are traditional for women, nontraditional jobs can provide better wages and benefits than the traditionally female jobs. Unfortunately, most female job training participants and public assistance recipients are steered towards traditionally female occupations. The additional earnings associated with NTOs significantly improve the ability of women to take care of their families. Nontraditional jobs also frequently have greater career and training opportunities, and many women find greater job satisfaction that can result in longer-term employment. In addition, hiring women in nontraditional jobs is good for business and produces positive results for employers.
- Recognizing the significant benefits of nontraditional employment for low-income women and their families, many women's community-based organizations began to offer nontraditional training 20 years ago. Their efforts were assisted by affirmative actions guidelines for employers and apprenticeship programs that opened the construction trades, in particular, to women.
- While most community-based nontraditional employment programs were successful, few of the strategies used to train and place women in higher-wage, nontraditional jobs were institutionalized into the mainstream job training and vocational education systems.
- Institutionalizing nontraditional employment focuses the workforce development and welfare systems on what they should be doing-moving families out of poverty by training women for self-sufficiency wage jobs with a future.
Functional Context Education
Functional Context Education (FCE) is an instructional strategy that integrates the teaching of literacy skills and job content to move learners more successfully and quickly toward their educational and employment goals. Programs that use the FCE model are more effective than traditional programs that teach basic skills and job skills in sequence because this innovative approach teaches literacy and basic skills in the context in which the learner will use them. Clients see clearly the role literacy skills play in moving them toward their goals. This strategy promotes better retention, encourages lifelong learning and supports the intergenerational transfer of knowledge.
- For adults who have already experienced school failure, enrollment in programs that use traditional approaches to teaching often reproduce that failure. Functional context education programs address this problem by using content related to adult goals to teach basic skills.
- Basic education and technical training must be relevant to the skills and education required by jobs if low-income persons are going to succeed in becoming economically self-sufficient. In addition, most adults do not have time to spend years in basic education programs learning skills that may seem unrelated to their educational and economic goals.
- Given welfare time limits and restrictions on education and training, it is more important than ever that individuals master basic and job-specific skills as quickly and efficiently as possible.
Despite this need, the number of FCE programs is small. Demonstration projects can help to institutionalize the FCE model. They can provide the opportunity for those interested in implementing functional context education programs to learn how the approach is translated into daily instruction.
In addition, demonstration projects can be used to develop, pilot and refine classroom materials and lessons plans. Such projects can also result in a trained cadre of technical assistance providers. State funding for FCE demonstration projects would allow researchers to evaluate FCE more comprehensively, resulting in improvement of practice.
Microenterprise Training and Development
Microenterprise development is an income-generating strategy that helps low-income people start or expand very small businesses. Generally, the business is owned and operated by one person or family, has fewer than five employees and can start up with a loan of less than $25,000. Microenterprise is an attractive option for low-income women who may have lacked opportunity but who are highly motivated and have skills in a particular craft or service.
Even in the current booming economy, pockets of unemployment and underemployment remain. The lack of quality employment options—especially for low-income, low-skilled women—makes microenterprise development a critical strategy for moving families out of poverty.
- Low-income women entrepreneurs, especially those living in rural or inner-city communities isolated from the economic mainstream, often lack the contacts and networks needed for business success.
- Peer networks (such as lending circles and program alumnae groups) help women learn to earn from each other, build self-esteem and organize around policy advocacy.
- Linkages between microentrepreneurs and more established women business owners provide program participants with role models, facilitate an ongoing transfer of skills, and expand networks.
Individual Development Accounts
Individual Development Accounts (IDAs) are dedicated savings accounts earmarked for purchasing a first home, for education and job training expenses or for capitalizing a small business. Contributions from eligible low-income participants are matched, using both private and public sources. IDAs are managed by community-based organizations and are held at local financial institutions. This innovative strategy is based on a fundamental truth that long-term economic security is achieved through savings and asset accumulation.
IDA programs often require economic literacy training that shows participants how to improve their credit, and establish a savings and budget schedule. They learn the basics of money management and how to participate in the new global economy.
Supporting IDA legislation transforms welfare policy from one that is based on spending, consumption and subsistence to one that is premised on increasing low-income families' ability to invest in their futures and achieve long-term economic independence.
The Self-Sufficiency Standard
This section contains information about the Self-Sufficiency Standard created by Wider Opportunities for Women and Dr. Diana Pearce, professor at the University of Washington, School of Social Work.
The Self-Sufficiency Standard calculates how much money working adults need to meet their basic needs without subsidies of any kind. Unlike the federal poverty standard, the Self-Sufficiency Standard accounts for the costs of living and working as they vary by family size and composition and by geographic location.
The Standard defines the amount of income necessary to meet basic needs (including paying taxes) in the regular "marketplace" without public subsidies—such as public housing, food stamps, Medicaid or child care—or private/informal subsidies—such as free babysitting by a relative or friend, food provided by churches or local food banks, or shared housing. The Standard, therefore, estimates the level of income necessary for a given family type—whether working now or making the transition to work—to be independent of welfare and/or other public and private subsidies.
The Standard provides important guidance for policymakers and program providers regarding how to target their education, job training, workforce development, and welfare-to-work resources. It helps individuals choose among occupations for work experience and educational training. It also shows policymakers how subsidizing child care, transportation or health care impacts the wages necessary for working families to make ends meet.
- The Standard assumes that all adults (whether married or single) work full-time and includes the costs associated with employment—specifically, transportation and taxes, and for families with young children, child care.
- The Standard takes into account that many costs differ not only by family size and composition (as does the official poverty measure), but also by the age of children. While food and health care costs are slightly lower for younger children, child care costs are much higher-particularly for children not yet in school—and are a substantial budget item not included in the official poverty measure.
- The Standard accounts for regional variations in cost. This feature is particularly important for housing. Housing in the most expensive areas of the country costs four times as much as in the least expensive areas for equivalent size units.
- The Standard includes the net effect of taxes and tax credits. It provides for state sales taxes, as well as payroll (Social Security) taxes, and federal and state income taxes. Two credits available to working adults, the Child Care Tax Credit (CCTC) and the Earned Income Tax Credit (EITC) are "credited" against the income needed to meet basic needs—thus reducing the income needed to become economically self-sufficient.
The Standard accounts for the fact that, over time, various costs increase at different rates. For example, food costs, on which the official poverty thresholds are based, have not increased as fast as housing costs. This failure to account for differential inflation rates among other non-food basic needs is one reason that the official poverty thresholds are no longer an adequate measure of the money required to meet real needs.