The over-65 age group in the United States is growing faster than any other. This is part of a global trend due to increased longevity and the ageing of the large cohort of “baby boomers” – those born during the immediate post-World War II period. In 2050, the population aged 65 and over is projected to be 83.7 million – 1.7 times more than in 2016 (48.6 million).
The increased economic pressure to sustain this older population means that older workers will need to work longer, and that unemployed, older workers need to get back into work. As of February 2018, the unemployment rate among older workers aged 55 and over was 3.2 percent, compared to a 4.1 percent unemployment rate of the total population aged over 16. However, the consequences of unemployment are more serious at older ages, and workers over the age of 55 face more challenges, such as a higher risk of long-term unemployment. Older low-income workers face even tougher challenges – they are twice as likely as high earners to be in physically demanding jobs, and when they do get re-employed they typically face pay cuts of 20 percent or more.
The US Congress passed the Older Americans Act (OAA) in 1965, in response to policymakers’ concerns about the lack of community services for seniors. The Senior Community Service Employment Program (SCSEP) was authorised in Title V of the OAA and its later amendments to provide subsidised, community service based training for older unemployed workers with a family income of no more than 125 percent of the federal poverty level. The specific aims of the programme are to foster individual economic self-sufficiency, promote useful opportunities in community service activities for unemployed low-income persons aged 55 or older – particularly those with poor employment prospects – and to increase the number of persons who may enjoy the benefits of unsubsidised employment in both the public and private sectors.
Priority is given to the following groups:
- The over-65s
- Veterans and their spouses
- Minority groups
- People with a disability
- People with limited English proficiency and low literary skills
- People in greatest economic need
- People with low employment prospects
- The homeless or those who are at risk of homelessness.
The SCSEP is a federal programme, funded by the Department of Labor’s Employment and Training Administration (ETA) and administered by national not-for-profit organisations and local government agencies. SCSEP participants gain work experience from subsidised employment and are often placed in community service assignments at a host agency. The host agency can be federal, state, county or city governments, such as daycare centres, hospitals, schools and senior centres.
Participants are paid whatever is the highest of federal, state or local minimum wage, and work an average of 20 hours a week. The subsidised employment can last up to 48 months in total and the aim is that it subsequently leads to unsubsidised employment for the participant. In programme year 2017, the SCSEP aimed to serve over 67,000 low-income, unemployed seniors. “The programme is a response to the reality that many mature people have outdated skills and economic changes often result in seniors losing work or being forced into retirement before they are financially ready.”
The public impact
The poverty rate for Americans aged 65 and older has dropped from 28.5 percent in 1966 to 9.3 percent in 2016. The proportion of people aged 65 who live near the poverty line – with incomes below 125 percent of the federal poverty threshold – has also dropped since it started being measured in 1970s. In 1975 it was 25.4 percent, compared to 14.2 percent in 2016. However, even though SCSEP has contributed to this upwards trend, the decrease in poverty among the older population in the US has been due in the main to increased social security and the introduction of Medicare and Medicaid programmes in 1965.
A more direct positive impact of the SCSEP has been on the overall wellbeing of the older Americans who participate in the programme. A participant satisfaction survey report from 2015 showed that 91 percent of SCSEP participants reported the same or better physical health while working, and 72 percent reported a better outlook on life.
In addition, the public impact of the SCSEP’s contribution to community service is substantial – in 2016, SCSEP participants provided more than 33.4 million paid hours to community service in public and not-for-profit agencies, corresponding to USD820 million. This is almost double the programme’s cost for that year – USD434 million. “An independent survey of SCSEP employment sites by the Department of Labor found that 77 percent relied on participants to provide services to the community.”
The programme’s impact on helping older Americans re-enter the workforce has been less significant. Although the SCSEP has helped over one million unemployed seniors to re-enter the workforce since its inception in 1965, typically only around half of participants are employed in the first quarter after exiting the programme. In programme year 2016, 47.4 percent of participants were employed in the first quarter after exit, which was just under the 50 percent goal for that year. In the same year, the rate of those still in unsubsidised employment after a year was 67.8 percent. Unemployment rates among old age groups have decreased from 7.1 percent in 2010 to 3.2 percent in 2018, following the same pattern as for the rest of the population. It is unlikely that the SCSEP has contributed significantly to this trend, as the funding of approximately USD450 million is estimated to cover less than one percent of eligible participants in the programme.
Written by Linnéa Larsson
This case study is part of a series of international policies that focus on easing the transition to retirement and later life. The case studies and the accompanying report were produced for the Calouste Gulbenkian Foundation (UK Branch).
Public Confidence Good
Public opinion in the first decades after the SCSEP was established was positive, because the American public saw how the problem of extreme poverty among older Americans had been drastically reduced since the 1960s. President Lyndon B. Johnson announced the War on Poverty in 1964 and initiated several key programmes such as Medicaid, Medicare, greater federal housing spending, and other programmes such as the SCSEP to fight that war. Since then, there has been a huge drop in the poverty rate. As previously described under Public Impact, the poverty rate for Americans aged 65 and above fell by over 19 percentage points in the 50 years between 1966 and 2016.
Furthermore, the public had previously recognised that older workers made effective contributions in manufacturing and service occupations during World War II when labour was short, so the justification for an employment programme for older citizens at that time made sense. “Attention shifted from the aging during World War II, but it was noted that older workers were making effective contributions in manufacturing and service occupations during that period of manpower shortage. The suspicion arose that there were errors in our notion of the unemployability of older workers and in our assumption that financial need represented the only problem of older people.”
More recently however, a grantee organisation called Experience Works drew negative attention to the SCSEP in 2015 when a Department of Labor audit found it to have misused over USD1.6 million of funds allocated to the programme. “The non-profit relied on grants from the Department of Labor. But over a three-year period, the organisation's leaders in Washington, DC started using that grant money like their own personal bank accounts – and the fallout can be felt all over the country.” This did lead to some negative feelings expressed by the public, and resulted in some loss of jobs: “[I am] disappointed that I personally and a number of other staff across the nation are losing their jobs," said Brad Haar, an Experience Works South Dakota programme manager.
Stakeholder Engagement Strong
Input from a large group of stakeholders across the US was collected at two major national conferences on ageing prior to the formation of the OAA. The first National Conference on Aging was held in 1950 and initiated by President Harry S. Truman. The director of the Conference on Aging, Clark Tibbitts, defined it as “a conference by, of and for persons outside the Federal Service.” Its 816 conferees, who had been nominated by an advisory committee of experts in the field of ageing – came from all over the country and were mostly non-government workers or government workers who represented themselves and not the organisations they worked in. The delegates came together to consider the problems associated with America’s growing population of older people. “All 816 delegates to the Conference were invited as individuals, representative of a field of interest and because of reported activity in that field. The conclusion was reached early in the group planning meetings that this procedure would yield a more informed group of delegates than would organisational representation.”
An even greater push towards OAA legislation began at the 1961 White House Conference on Aging. More than 300 voluntary organisations and over 2500 delegates – policymakers, advocates, practitioners, and older people – were there to discuss, debate and outline the conditions and needs of the country’s ageing population, and to work out specific policy recommendations. The conferees called for legislation to set up a federal ageing coordinating agency. This agency should be adequately funded to coordinate federal activities related to aging and a federal grant programme for community services for the elderly.
It was in response to the recommendations of the White House Conference that legislation was introduced in 1962 to create a programme of grants for social services, research, and training that would benefit older persons. Legislation introduced in 1963 modified the 1962 proposal and the 1965 OAA paralleled the 1963 proposal.
Political Commitment Fair
The OAA received bipartisan support and was signed into law by President Lyndon Johnson on 14 July 1965. He said at the time that: “The Older Americans Act clearly affirms our nation's sense of responsibility toward the wellbeing of all of our older citizens. But even more, the results of this act will help us to expand our opportunities for enriching the lives of all of our citizens in this country, now and in the years to come...We have been talking about it all these years, now we are doing something about it.”
President Richard Nixon showed his support for the programme when he gave a speech to the 1971 White House Conference on Aging, saying: “Some of the best service programmes for older Americans are those which give older Americans a chance to serve... Federal programmes to provide such opportunities have proven remarkably successful at the demonstration level. But now we must move beyond this demonstration phase and establish these programmes on a broader, national basis.”
Before 2017, the SCSEP enjoyed bipartisan support and no president proposed to eliminate it completely. On the other hand, the programme has been amended and had its funding cut many times since its inception. For example, over the past seven years, the SCSEP budget has been cut by 50 percent overall, most recently by 8.5 percent between financial years 2016 and 2017.
In 2018, however, in President Donald Trump’s budget proposal for 2018, the SCSEP has been eliminated in order to save USD434 million. The programme is deemed to be “ineffective in meeting its purpose of transitioning low-income unemployed seniors into unsubsidised jobs. As many as one-third of participants fail to complete the programme and of those who do, only half successfully transition to unsubsidised employment.” As a result, the Department of Labor requested no funding for the programme in its 2018 budget. However, in May 2017, 23 senators signed a letter in support of protecting the funding for the SCSEP to the subcommittee on Labor, Health and Human Services, Education and Related Agencies. In July 2017, the House Appropriations Committee approved, along a party-line vote, a bill to fund the Departments of Labor, Health and Human Services, Education and Related Agencies (Labor-HHS) for FY2018. As of 2018, the SCSEP budget was reinstated at USD397,284, but the future funding level beyond 2018 remains unclear. The ETA has not requested funding for the SCSEP in 2019.
Clear Objectives Good
The objective of the SCSEP, as stated under Title V in the 1965 OAA, is to:
- “Foster individual economic self-sufficiency
- “Promote useful opportunities in community service activities (which shall include community service employment) for unemployed low-income persons who are aged 55 or older, particularly persons who have poor employment prospects
- “Increase the number of persons who may enjoy the benefits of unsubsidised employment in both the public and private sectors.”
A 2013 evaluation of the SCSEP, however, has revealed that there may be some confusion among local project managers on how to marry two of the objectives – prioritising the most vulnerable in need and at the same time emphasising employment outcomes – as it is more challenging to find unsubsidised jobs for that group.
In the period leading up to the OAA, there was a lot of momentum around the topic of ageing. Evidence was gathered from the two large conferences – the National Conference on Ageing in 1950 and the White House Conference in 1961. One of the goals of the National Conference on Ageing was to “transmit the findings of this Conference to interested groups, including the Federal Government, as guidelines for development policies with regard to our older people”. In addition, a Working Committee on the Ageing was set up. Their task was to review the relevant literature and, with the “aid of their colleagues and of competent outside persons”, issue a progress report, which was sent to several hundred informed people for comment.
Evidence was also gathered from existing community groups who had been developing trial programmes separately but who had begun to realise that some of its activity would be best administered nationally. “These groups took the initiative also in asking the Agency for a facility through which they could become acquainted with other workers in the field and could check their programmes against programmes being conducted elsewhere.”
The SCSEP itself evolved from a pilot project in 1965 called Operation Mainstream, which was run by national not-for-profit agencies. Evidence from Operation Mainstream was used to inform the national, ongoing programme that the pilot later became in 1973.
At the outset, funding for the SCSEP was modest, as recognised by President Lyndon B. Johnson in his remarks before Congress at the signing of the OAA: “The grants under this law will be modest in dollars, but will be far-reaching in results.”
Funding for the SCSEP peaked in 2010 at USD825 million; however, in the last seven years the programme has been cut by a total of 50 percent. In programme year 2011, the SCSEP was funded at approximately USD450 million, which was intended to cover a total of 46,103 participant positions. Lack of adequate funding to serve the population of low-income older unemployed workers has been highlighted by Professor Andrew Sum and Ishwar Khatiwada, who in a paper in 2012 estimated that the available programme funding from the SCSEP covers less than one percent of eligible participants. In FY2017, the SCSEP was funded at USD433.5 million.
A process and outcomes study of the SCSEP from 2012 found that the decrease in funding had had a serious effect on its operations at the community service level. “Dramatic shifts in SCSEP funding levels posed serious operational challenges to local project operators during Programme Year 2011, including pressures to cut back on additional skill training outside the community service assignment and accelerate efforts to place existing participants into unsubsidised employment.”
As funding for the SCSEP had never been considered substantial, early success with the pilot programme Operation Mainstream and the subsequent national, ongoing SCSEP has instead been credited to the careful crafting of the legislation behind the programme. In a report from 1988 by the National Council on the Aging to the Chairman of the Select Committee on Aging in the House of Representatives, it was noted that “Title V is truly a success story, in large part because the legislation creating the SCSEP – the Older American Community Service Employment Act – was carefully crafted”.
In 2018, the SCSEP’s feasibility is being questioned, as the Department of Labor as a whole and the ETA in particular are facing large cuts to their 2018 budgets. In their latest budget request for FY2018, ETA has eliminated all funding for the SCSEP, claiming that the older workers’ employment needs can still be covered under the Workforce Innovation and Opportunity Act (WIOA) programmes – “the goal of supporting the self-sufficiency and employment of older workers can continue to be addressed through the core WIOA programmes.”
The SCSEP is a federal programme under the Department of Labor’s ETA, which approves funding to national and state grantees. These are, in turn, responsible for appointing local project operators who provide direct services to SCSEP participants. The local project operators are also responsible for monitoring local projects’ compliance with programme regulations and assisting local projects in meeting the programme’s goals.
Accountability was increased in 2006 when the OAA was amended to require that SCSEP national grants are competed for every four years. In addition, if the state grantees fail to meet the core performance goals for three years in a row, they must be competed for again.
To monitor the programme operators and hold them accountable for programme expenditures, data collection and performance, grantees make at least one site visit a year. They regularly monitor programme budgets and the SCSEP Performance and Results Quarterly Progress Report (SPARQ) management information system. Project operators are also helped with their fiscal management to make sure they stay within their budgets and helped with their strategies if they have overspent. This approach of strict monitoring helps with budgeting but has been criticised by some employees – “staff members at some local projects perceived the national grantee’s close involvement in fiscal monitoring as micromanaging its local enrolment practices and second-guessing its ‘boots on the ground’ knowledge of the programme”.
One challenge highlighted by a Process and Outcomes Study of the SCSEP from 2012 was the heavy dependence of most projects on participant staff members, participants who are assigned to the SCSEP as their community service assignments. They comprised the majority of staff at 59 percent of the SCSEP sites surveyed. Although they provide key participant services, such as case management and job development, the situation also poses some challenges. The high staff turnover is disruptive, the participants often lack formal training to work as case managers, and because projects are so dependent on participant staff members, there is a risk of creating a disincentive to move those participants into unsubsidised employment.
Since 2016, the ETA has reserved a portion of up to 1.5 percent of the total SCSEP allocation for pilot, demonstration and evaluation projects. This portion is defined as “up to 1.5 percent of the total authorisation” according to ETA’s Congressional Budget Justification for FY2017. This would correspond to up to USD6.5million in 2017 when the funding for the SCSEP was USD433.5million.
This portion of funding allows ETA to perform quarterly progress reports of the SCSEP using SPARQ data. Data such as grantee information, participation levels, community service assignments, participant characteristics, core performance measures and additional performance measures are collected through SPARQ. They also evaluate and learn from best practices of successful SCSEP projects.
Before the 2000s, however, there had not been many independent quality evaluations of the SCSEP in order to judge its effectiveness. The Office of Management and Budget concluded in 2003 that the SCSEP was ineffective and needed several adjustments going forward. Part of the critique was that the programme did not have performance measures to assess the impact on programme participants, or a grantee reporting system to capture important outcome data which would help to assess the programme’s impact. They did, however, note that “DOL [the Department of Labor] has developed a revised evaluation plan that will establish a regular cycle of evaluation for all major job training and employment programmes, including CSEOA [Community Service Employment for Older Americans]”.
The most recent process and outcomes study evaluating the SCSEP was made in September 2012, when Social Policy Research Associates and the Mathematica Policy Research, Inc. prepared a process and outcomes study on behalf of the US Department of Labor and ETA. The analysis included the use of individual level data from the SPARQ quarterly reports and a customer satisfaction survey for a sample of programme participants. The researchers also conducted in-person and telephone interviews with 17 national grantees and 4 state grantees as well case study site visits to 29 local programmes. In addition, they conducted informal interviews and focus groups with participants at all the 29 case study sites to find out about participants’ views of the programme. In terms of programme structure and operations, this report concluded, for example, that there was room for improvement in local projects’ level of coordination with the workforce investment system, that most projects relied heavily on participant staff members in order to function, and that the job search assistance offered varied in intensity across local projects.
On the positive side, they found that local projects had a strong and mutually beneficial relationship with host agencies. In terms of performance management, both grantees and local project managers expressed frustration over how to fulfil two contradicting goals of the programme – serving the “most in need” and at the same time working towards ETA’s greater emphasis on helping SCSEP participants to move into unsubsidised employment. Finally, about half of the SCSEP participants who completed the programme were found to have entered unsubsidised employment and the likelihood of entering unsubsidised employment declined with the participants’ age and if they lived in an area where unemployment was high.
Alignment, and specifically coordination and collaboration between the SCSEP and related programmes such as the Workforce Investment Program (WIA) and American Job Centers has been found by the Office for Management and Budget in 2003 and by the Process and Outcomes Report commissioned by the ETA in 2012 to be in need of improvement. It was stated in the report that “...because of the perceived difficulties in coordinating SCSEP and WIA/American Job Center resources on behalf of older workers, ETA may want to focus attention and make specific investments to improve the responsiveness of the services available to older workers within American Job Centers.”
Part of the reason for these difficulties could be the different needs and aims of job centre staff, SCSEP staff and SCSEP participants, as well as a poor communication between the parties involved. As the report showed, both SCSEP staff and participants stated that the relationship between local projects and job centres has been strained in some cases. Older workers felt that they did not get as much one-to-one, individualised attention as they needed, which made them feel unwelcome at the job centres. Similarly, SCSEP staff were under the impression that job centres did not want to invest as many intensive services for SCSEP applicants as for other applicants, due to their own focus on finding full-time employment opportunities and the perceived wish of many older workers to find part-time employment. Furthermore, although SCSEP staff did cite job centres as a key source of referrals to the SCSEP, they thought that the SCSEP had become the “default referral” for all older workers by many job centre staff, regardless of whether they met any of the other SCSEP eligibility criteria.
Coordination among the actors directly involved in delivering the SCSEP, such as local projects and host agencies, has been more successful. The 2012 Process and Outcomes Study Report states that the reason for the strong alignment between these different actors is due to the fact that they have mutual benefits – SCSEP provides no-cost labour to host agencies, enabling public and not-for-profit agencies to continue to offer their services in a time of restricted funding, and local SCSEP projects are able to use those agencies as a means to offer skills training for SCSEP participants within the remits of their limited training budget.
This setup is also beneficial for SCSEP participants, who gain work experience at the host agency and ultimately increase their chances of obtaining unsubsidised employment there. “Another feature of the host agency relationship is that nearly all local SCSEP projects emphasis placing participants into unsubsidised jobs in their host agencies. In nearly half the projects visited, host agencies account for the majority of placements of SCSEP participants into unsubsidised jobs.”