YOU ARE HERE: LAT HomeCollections

SMALL BUSINESS | Enterprise Zone / Lessons and Insight
on Southland Businesses

Putting People to Work

Small Businesses Vital to L.A. Welfare Employment Efforts


President Clinton has urged employers to put welfare recipients to work. Fortune 500 executives have responded with hiring programs that have garnered plenty of free publicity.

But the success of America's great welfare-to-work experiment ultimately rests with the likes of Kim DeVane. The manager of a janitorial supply warehouse tucked into an anonymous Bell industrial strip has hired two of the company's 15 employees through Greater Avenues for Independence, or GAIN, Los Angeles County's principal welfare-to-work program.

"Companies that complain about big government now need to turn around and become part of the solution," said DeVane, branch manager of LaGasse Bros. Inc. "It's time to do some things differently."

With 150,000 local welfare recipients slated to move from welfare to work in the next few years, Los Angeles County is going to need an army of Kim DeVanes. In the face of that tremendous load, GAIN is stepping up its efforts to recruit more employers. Meanwhile, some of the county's large companies have joined forces to encourage others to hire workers off the dole.

But in an area where the vast majority of employers are tiny, Los Angeles can move big numbers only by thinking small. Communities such as San Francisco are further along in their efforts to mobilize small businesses, having recognized that welfare reform won't succeed without them.

"It's make or break," said Scott Hauge, chairman of the California Small Business Assn., who helped develop the San Francisco program. "If small business doesn't get involved, it's not going to happen."


Small businesses haven't exactly been sitting on the sidelines when it comes to hiring welfare recipients. The national Welfare to Work Partnership, a nonprofit founded in 1996 by leviathans such as United Parcel Service and Burger King to encourage private-sector participation, now has a membership dominated by small firms, according to spokesman Luis Vizcaino.

Likewise, Los Angeles County GAIN chief John Martinelli estimates that 80% of the 42,000 program participants placed in jobs last year went to work for small businesses in the Los Angeles area.

"We've had most of our success with small firms because they dominate the market here," said Martinelli, whose program teaches resume writing, interviewing techniques and other "soft" skills. "That's where the jobs are in L.A."

The trick, he says, will be encouraging a lot more of them to participate as federal deadlines approach for moving people from welfare rolls to payrolls. About 150,000 Los Angeles County welfare recipients must make the transition, with 20% required to be actively working by the end of this year.

Martinelli says the key is to persuade small-business owners that GAIN can supply them with good help in a tight job market, with the added sweetener of tax incentives and cost savings to boot. Rather than play on employers' philanthropic instincts, GAIN markets itself as an employment service that delivers qualified workers quickly and performs all the pre-hiring legwork free of charge.

That's no trivial benefit, according to DeVane, who, like others running small businesses, is a one-person human resources department. He says GAIN has supplied quality employees in a fraction of the time it would take him to run help-wanted ads, screen candidates and conduct interviews.


"It used to take me a week to hire a warehouse worker. Now it's a couple of hours," DeVane said. "Quite frankly, I prefer hiring someone they've recommended than someone who has walked in off the street."

GAIN also is touting tax credits--up to $8,500 per employee under one federal program--that employers can reap by hiring workers off public assistance. Not to mention the transportation and child-care subsidies that these workers carry with them to the job.

But some observers are skeptical that droves of small businesses will be swayed by such incentives, particularly when it comes to hiring the least-qualified prospects.

"Small businesses simply don't have the excess managerial time to deal with people who aren't ready to work," said J. Eugene Grigsby III, a professor of urban planning and director of UCLA's Advanced Policy Institute. "Big businesses and government have the infrastructure to deal with those issues. But when you're running lean and mean, you can't afford many missteps."

Such concerns are shared by many business owners, many of whom wouldn't know where to begin to hire a welfare recipient even if they wanted to.

Enter the Welfare-to-Work Leadership (WWL).


Formed last fall, the mission of this little-known group is to mobilize the Los Angeles business community to take an active role in getting residents off the dole.

The group was founded by Los Angeles Business Advisors--an influential group of 24 chief executives of major Southland corporations that includes Los Angeles Times Publisher Mark H. Willes--in conjunction with the Los Angeles Area Chamber of Commerce and a handful of area foundations.

Los Angeles Times Articles