All in a Day's Work

Lockheed Martin's welfare-reform efforts have cost taxpayers across the country millions. So naturally, Lockheed Martin has been hired to train and find jobs for the poor in Houston and Harris County.

It's graduation day at the Service, Employment & Redevelopment Center, or SER, and Tejano music and the smell of fresh tamales fill the hallways of the one-story building in the Gulfton area of southwest Houston.

About 80 people from more than a dozen countries have crowded into an empty classroom to celebrate having attained a certain proficiency in the English language. Actually, the end of an English-language course at SER is more like a pep rally, with testimonials and punch, than an actual graduation ceremony.

The students have reached the end of a 12-week program of five-day-a-week, three-hour-a-day instruction in a new language. Some of the graduates will move on to the next level of instruction. Others will continue the college educations they began in their native countries. And then there are those, now that they have a working knowledge of English, who will try to find something better than the menial, low-paying jobs they have always had.

"The whole push here is to get ahead in employment," says Margarita Flores, who runs the programs at SER's family learning center, "and for a lot of them, all they lack is the language skills."

Places like SER are at the heart of the state's welfare-reform efforts. Tucked away in a tough, low-income neighborhood, it is one of dozens of small social-service agencies that provide everything from English classes to advanced occupational training to job placement for unemployed and underemployed people in Houston.

Such community-based organizations are likely to become critical resources for poor, hard-to-employ people who need training and job-placement services. Changes in federal law now require welfare recipients to find work within two years or lose public assistance. Benefits are limited to a total of five years over a lifetime. Other changes could result in cuts in food-stamp assistance.

At the same time federal welfare reform is making employment services more important, changes in state law seem designed to reduce the quantity and quality of those services. The city's poor could be most affected by a change in who controls federal job-training funds earmarked for Houston.

In the past, the city's nonprofit administrative agent, Houston Works, received an annual allotment of roughly $10 million from the federal government. The nonprofit then doled out subcontracts, approved by City Council, to about 30 small, community-based nonprofits and for-profits to provide training and job-placement services.

But under state welfare-reform legislation passed in 1995, control of those moneys will be turned over to a regional body, the Gulf Coast Workforce Development Board, on July 1. The '95 law also requires that the Gulf Coast board competitively bid employment and training programs traditionally performed by state agencies.

Last month, in the first major privatization of welfare services in Houston and Harris County, the GCWDB approved a $9.2 million contract with Lockheed Martin IMS, a subsidiary of the giant defense contractor, to provide employment services to welfare and food-stamp recipients. The contract has angered the Texas State Employees Union, whose members have been providing those services for decades. Moreover, in a departure from the standard approach to privatization, the state prohibited its own agency, the Texas Workforce Commission, from bidding on the job-training contracts.

"This whole thing, the legislation, was never intended to go this way, where we're basically going to put the state out of business," says Richard Shaw, a member of the Gulf Coast board and director of the Harris County AFL-CIO, who voted against the Lockheed proposal. "My thought was, let the Texas Workforce Commission continue to do what it's doing, and in the meantime, let [the local boards] redesign and restructure the way people get jobs."

Likewise, privatization has forced agencies like SER and the for-profit Employment Training Center to let go of the social safety net. In a further attempt to cut costs through competition, the Gulf Coast Workforce Development Board last month put an estimated $11 million worth of contracts, normally available to smaller, community-based agencies through the city and Harris County, out for competitive bids.

While Houston Works will likely retain a portion of those contracts for the city, Lockheed Martin is expected to bid on a significant portion of the funds as well. Since Lockheed plans on providing its own services, as well as exploring ways of computerizing them, fewer subcontracts will be available for community-based agencies that, like the state and its employees, have been doing this work for years.

Irma Gonzalez, who founded Employment Training Centers with her husband, Robert, in 1986, says she might have to cut services by as much as $1.5 million.

"There would definitely be some layoffs," she says. "We would have to look for other sources of funding, other opportunities."

Given that the state's welfare-reform effort is called "Work First," it's more than a little ironic that, so far, the only sure thing about the privatization of employment services is the loss of state jobs and the reduction of community-based organizations that offer education and job training to the unemployed.

And while competition is supposed to be the key to cutting welfare costs and improving performance, state law has made it all but impossible for these smaller agencies to compete directly for job-training funds. Again, the culprit is the '95 legislation, which mandates a two-tiered welfare-employment system that operates on the "career center" model.

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