Jason DeParle (Moderator): Kate, do you want to start with your reaction to the film?

Kate Jesberg: I really enjoyed the film, and for those of you who are from the District of Columbia, you should be very proud, as I am, because the District has excelled in a number of the film’s suggestions for social supports in states to mitigate the effects of low-wage work forces. For example, we have the largest state Earned Income Tax Credit (EITC) in the United States, 35 percent of the federal. We have a very expansive Medicaid program, and we also cover adults. We also now have a living wage contract, and we also have a minimum wage now of $7 an hour. We do this, of course, because we have a substantial problem with low wage earnings. Through our program, we frequently get people off welfare, but we don't get them out of poverty

Jason DeParle: Let me move ideologically and geographically from the generous District of Columbia to the cheapskate troublemaker from the state of Texas, Larry Temple.

Larry Temple: Our agency, the Texas Workforce Commission, has the welfare-to-work program, but we also have all of the Department of Labor-funded training programs, as well as many state initiatives. We also have childcare within our agency, with the idea that childcare is, in fact, an economic development tool to help people working.

As far as the Earned Income Tax Credit (EITC), we've launched an initiative in Texas, identified those areas of the state that have the lowest EITC utilization, and I'm happy to say we've advanced that recipiency very strongly. But the workforce can work. I think it's important to have that employer connection and help people. Our agency has people who can help other people make good career choices and can show them what's coming as far as jobs in demand and career opportunities.

Jason DeParle: Jared, few people have thought more about low-wage workers than you. What was your reaction to the film?

Jared Bernstein: I noticed that in the film nobody was making the minimum wage; it sounded like people were making a couple of bucks above it and clearly still had a whole set of problems we associate with low-wage work. The package that's needed includes the job and the wage, but also work supports, which are a set of programs including health care and EITC. I call them gap closers, because they're there to close the gap between what someone earns and what they need, and as you see in the movie, there are some problems there.

By the way, one of the striking things about this movie is what we call the cliff effects, the idea that as you earn more, your benefits begin to fade, and you see it in what Barbara in the film was going through. And, of course, the solution to these effects is more universal programs, or at least raising the cliff much higher up the income scale.

Jason DeParle: Lashawn, you have the mike.

Lashawn Richburg-Hayes: I think the documentary did an excellent job in showing that education pays by putting a face on the statistics. Statistics show that college graduates earn about 55 percent more than high school dropouts, and those graduates with associate degrees earn about 40 percent more than high school graduates. In my opinion, these statistics show that there's a role for community college institutions in rectifying poverty problems.

But there's a dilemma. Education pays, but it's hard to obtain. In our work at MDRC (a research firm) and community colleges, we've talked to low-income adults who succeeded, failed or are in the process of obtaining a postsecondary credential, and what we learned from them is that the barriers that they face to doing this are typically the ones mentioned in the film. There's poor academic preparation, conflict between work, family and other responsibilities they have to take on in their lives, and finally, just finances. It's difficult to manage their households even without managing the extra costs of going to school.

MDRC's response to this was to start work on interventions in community colleges that could help both low-income adults as well as disadvantaged youth. And one of those interventions we're studying is a performance-based scholarship in Louisiana. This scholarship is different from merit scholarships in that the scholarship is based on performance benchmarks, and although it's only operating in Louisiana, is very promising and the early results are compelling. What we've seen so far is that offering this scholarship, in addition to enhanced counseling, has resulted in students obtaining almost a half a semester more college credits than students in similar situations.

We believe at MDRC that this performance-based scholarship could be expanded to other states. There are a few state legislatures that are in the process of, or are thinking about, creating more merit programs. These programs tend to be limited to low-income or highly achieving students coming out of high school, going in to college. That is a group that needs to be helped. But we would like state legislatures to consider helping another population of low-income people, not necessarily youth, but adults as well, who may not have exhibited prior academic achievement but are capable of achieving, and that achievement may not be a 3.0 GPA. It may be a 2.0 GPA, and, as we see in Education Pays, success in getting that first credential could lead to greater success down the line.

Jason DeParle: Harry Holzer.

Harry Holzer: Thank you. I thought the movie was very good and highlighted an important set of issues. I thought the movie was correct, and all the speakers really have highlighted the same three sets of issues on the policy side, all of which need to be addressed to really do something about this problem. Number one I think is the skills and education of the workers; number two, the quality of jobs and the advancement opportunities they face; and number three, the public supports and filling in the gaps, as Jared said. I think in all three dimensions we could do a better job both in state policy and certainly at the federal level.

In terms of skills and preparation, I want to talk about what happens before people become the working poor as adults. I think we could do more for young people. And you could start this conversation at many different places. I want to talk about high school, because I think the high school years are a very important point at which people could get a better set of skills to prepare them for the labor market, or for postsecondary advancement. We talk almost exclusively about test scores and academic preparation. Those things are important but they are not the only things that matter. I'd like to see a stronger emphasis on multiple pathways to success for people in high school, especially those that won't be going to postsecondary. I think high quality career and technical education is a possibility and we could do a lot more. I'm not talking about old-fashioned vocational education, which in many cases really was, and in some cases remains, a back-order. I'm talking about newer approaches that combine good academics, occupational training and early labor market experience for young people.

The best examples I know of are the career academies, which have been rigorously evaluated by MDRC. The career academies raise the earnings of disadvantaged young men by almost 20 percent a year for as much as four years out of school, and that's almost unprecedented by any of these second-chance programs that we hear about. It indicates that there really is potential. It's possible to set up high quality career-oriented programs for high school students that I think could do a lot better.

So I think these approaches are very promising. Lots of states and even cities are doing interesting things to try to develop these approaches, to try to scale them up. We need more evaluation to find out what works and what really doesn't. We need new approaches to try to scale these things up when we figure out what works, but it is a promising area that maybe we could do more with.

How do we improve the quality of jobs independently of worker skills? Jared mentioned some things. Moderate increases in the minimum wage I think are appropriate, as long as they're moderate. Making it easier for workers to organize collectively would help. Other approaches include subsidy programs for firms and technical assistance with firms that actually try to provide better career ladders and better training opportunities. We have a range of examples at the state level: some have been rigorously evaluated and are looking successful. So we could do a range of things to encourage and incent more firms to offer a better range of job possibilities in addition to focusing on workers' skills.

Finally, I want to talk about the issue of funding. The two primary pots of money that were used to fund adult low-income education are the WIA (Workforce Investment Act) funds, and the Pell grants. Now, the WIA funds have been on a downward trajectory in real terms for several years now. To me it's a little disgraceful that we talk about this and yet we cut WIA funds every year, especially when there's clear evaluation evidence that WIA, at least for adults, has been successful.

Of course, Pell grants these days, in terms of dollars, are much more important and several times larger than the WIA budget, and, again, Pell dollars have increased, but not as much as tuition has gone up in many states. And there are other issues of who's eligible and how you enable people to package Pell with other kinds of supports.

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