A Montana Welfare Check Gives Way to Wood Glue

Chris Voss knows that he is a trial balloon of federal welfare reform.

Every day that he arrives at work on time, every high-end cabinet he helps manufacture, he provides a reason for other businesses to hire people from the public dole.

Six months ago, Mr. Voss's roofing business had gone under and the $200 a month he made from odd jobs wasn't paying the bills. So the Missoula, Mont., resident sat at home with his wife and young daughter collecting welfare.

Then the state of Montana made him and his future employer an offer that neither could refuse: In exchange for being hired into an apprentice cabinetry-making program at Alpine Cabinets-N-Doors, his boss would receive an interest-free loan for business expansion. The program is one of the more unusual efforts to move people from welfare to work, and here in the Big Sky State, people are just beginning to see its benefits.

"This program is the best-kept secret in Montana," says Dick Baker, who hired Voss. At first, "I participated ... solely to get the loan, but it has changed my impression about people on welfare."

Two autumns ago, in the wake of sweeping welfare reform, more responsibility for managing welfare money - and the people receiving it - went to the states, and Montana sought to develop its own incentive-based approach.

David Ewer, a senior bond program officer for the Montana Board of Investment, says huge gaps existed in how to get people off welfare into meaningful jobs. As a three-term state legislator, Mr. Ewer also understood taxpayers' resistance to solving the problem with public money.

Montana's novel solution was to form an odd marriage of the public and private sectors. For every penny offered to welfare recipients above $5.50 an hour, the employer is able to borrow more money, interest free, up to a total of $20,000 for two employees. The loan must be paid back within three years.

Although the state initially set aside only $250,000, and just six businesses have stepped forward during the program's first 10 months, the potential for growth is limitless. Word of the no-interest money is spreading, and several other states are closely following Montana's success.

Because Montana's work force is dominated by mom and pop-type businesses, not mega employers, the program is designed for smaller operations with growth potential.

"In my view, to win this struggle against poverty and dependence you have to win it one job at a time," says Hank Hudson, administrator of the Division of Child and Family Services in the Montana Department of Public Health and Human Services. "The bigger picture is that it serves as a demonstration to other employers that working with the state and lenders to employ people on public assistance is a good business move."

Nationally, Montana has one of the lowest average income levels, yet over the past year, Montana has watched its welfare caseload drop 35 percent - more than most states.

"Nobody's kidding themselves, this is a tough nut to crack. The key to keeping people off assistance is to help them find employment where they want to stay," Mr. Hudson says. "It would obviously be shortsighted to cheer the declining caseload in Montana if all these people are at the food bank."

Mr. Baker notes that the program is not without obstacles. Some lenders are hesitant to get involved, and businesspeople must overcome stereotypes.

"You don't automatically get the right person. Many people stuck on welfare are there for a reason," he says. "One of the reasons is they have no work habits or maybe an alcohol problem or have mismanaged their money."

But the response from citizens in his community has been positive, he says. "We're not looking for people who just want a job or a paycheck. We're looking for people who are willing to work hard."

Voss, who is hoping to become a master cabinetmaker in 10 years, says the program was long overdue. "People outside the welfare system believe if you're on welfare you're going nowhere and have no drive to go anywhere," he says. "I love woodworking, I feel lucky to wake up every morning to a job I feel happy with. I've found a career."