Articles
There have been two articles published on the Econet model. A brief summary was published in 1992 in the Proceedings of the National Small Business Consulting Conference (Article 1 below). A second more extensive summary has not been published previously (Article 2 below).

Article 1

Economically Centered Social Network for Homeless Individuals
Martin L. Korn, MD
Albert Einstein College of Medicine, Bronx, NY

Proceedings: National Small Business Consulting Conference
Small Business Institute Director’s Association
Washington, D.C.
January 29-February 2, 1992
Pages 78-80

Homelessness in the United States has been growing rapidly and is thought by many to be reaching critical proportions. Despite considerable allocation of scarce resources, economically viable solutions remain elusive. Most of the programs for the homeless have been initiated by and administered through non-profit agencies and are based on a therapeutic biopsychosocial model. Although these programs provide for the breadth of comprehensive services required for this multi-disadvantaged population, they have not been as successful as had been hoped for multiple reasons.

A proposed solution calls for the creation of a revenue-generating economically centered social network as a means of attempting to impact on this heretofore intractable problem. In order to effect this model, a socially-dedicated corporation entitled Econet Enterprises has been established. Named after the model being advocated this corporation is a “for profit” concern with a specific mission to develop economically viable solutions for the severely socially disadvantaged such as the homeless.

The components of the structure of the proposed economically centered model are as follows:

A: Economically Centered Program
As an alternative to traditional psychosocially based programs, it is suggested that an economically centered one be adopted. That is, offering immediate employment and helping the individual maintain this employment should become the foundation of the rehabilitation and reintegration process. Unlike most employment traditionally offered to the severely indigent however, the Econet work force will be organized into small work teams as advocated by modern management theory (e.g., Japanese style*). This organizational structure will simultaneously serve two ends. First since these techniques have been shown demonstrated to increase productivity, the goods and services of Econet Enterprises are expected to be competitive in the market place even though the work force is disadvantaged. Secondly, the work teams will form the nucleus by which a cohesive social network will be formed.

In addition to work contracts completed directly by Econet (e.g., simple assembly and delivery operations), liaisons with independent corporations will be sought to establish large scale programs hiring the homeless at their sites. In order to encourage these for profit concerns to “invest” heavily in this disadvantaged population, Econet Enterprises will actively work to obtain private and government contracts for goods and services. These contracts will be contingent upon their hiring of the homeless.

B. Social Network
Central to the success of the initiative is the formation of a supportive and ongoing social network and Econet will be actively involved in this process. In addition to the small work groups, group social activities and living arrangement will be encouraged and coordinated by Econet. Thus, the work site will be utilized to re-establish and reinforce normal social and familial relationships, addressing in a vigorous and direct way the social disconnection and isolation that is central to the homeless experience.

C. Employee Assistance Plan
Psychological, psychiatric and social services will be provided by Econet through an active corporate employee assistance plan. This will ensure that immediacy and high quality of services will be maintained. Liaisons with established non-profit agencies will ensure that these services are effectively provided.

In order to begin to test the underlying premises of the model, several simple assembly work contracts were obtained from a corporation in the South Bronx several blocks from the Willow Avenue Shelter. Five homeless women currently housed at the shelter and defined as “job ready” by the shelter staff were hired. Contracts were completed directly at the corporation over a period of approximately two weeks. All of the women had previous job experience, but had been unemployed for prolonged periods at the time of hiring. Length of residence in the shelter system was from several months to several years. Four of the five had histories of serious drug problems and were soon to be enrolled in an intensive three month residential drug program in the shelter. The employees were informed that this was a regular job and not a sheltered work shop and that standard rules of work behavior would have to be adhered to. Furthermore, in concordance with Japanese management techniques, they were organized into a small work group and were told that they were eventually expected to be able to monitor the pace and quality of the work with little direct supervision. Supervisors, rather than simply observing, worked along with the team in the assembly process. Management actively worked to ensure that interpersonal and work problems were dealt with quickly and effectively at an estimated pace of at least 1 ½ times that of the contract work force. They were also able to take some responsibility for quality control and time sheets. Several of the Econet supervisors spontaneously reported that the homeless employees began to dress and look better by the end of the two week period. Although it is over a month since the completion of the contract, the homeless employees continue to ask when work will resume.

*Japanese management style - This refers to so-called "quality circles" that were first implemented primarily in Japan in the 1960s to enhance efficiency and improve quality of product. They consisted of small cohesive work groups that were given increased responsibility for completing and monitoring work processes. Note - This explanation was not included in the original paper

Article 2

Economically Centered Social Network:
A new organizational model for the homeless

Unpublished Manuscript

Martin L. Korn, MD
1991

Abstract
Homelessness in the United States has grown rapidly, defying traditional solutions. Most current programs are administered through non-profit agencies, offering services and entitlements. We present a new economically driven, socially cohesive model employing modern management techniques. This model is advantageous in that it is revenue-generating, mainstreams the homeless into established businesses and addresses the social disconnection of the homeless. A pilot project appeared to confirm several of the underlying premises of the model.

Homelessness in the United States has been growing rapidly, becoming one of he most serious social problems of our day. Despite considerable allocation of scarce resources, economically viable solutions remain elusive. Most of the programs for the homeless have been initiated by and administered through government and not-for-profit agencies. Although these programs provide for the breadth of comprehensive services required for this multi-disadvantaged population, they have not been successful in reversing this disturbing trend. This paper outlines the structure of the current initiatives for the homeless and subsequently presents a new private-sector based model as a means of cost effectively impacting on this heretofore intractable problem.

Characteristics of the Homeless
The extent of homelessness is difficult to accurately assess due to variance in definitions and the transient nature of the population. National estimates range anywhere from approximately one quarter to over 3 million individuals (Rossi et al., 1987). Many reasons are posited for the increasing numbers of homeless including lack of suitable community services for the chronically mentally ill in the face of deinstitutionalization, reduction or disappearance of extended family and social networks, destruction of low income housing, lowered economic standards, decreased entitlement supports and high levels of substance abuse among others (Weitzman et al., 1990).

In addition to the striking increase in numbers, there has been a dramatic shift in the demographics of the homeless population (Rossi et al., 1990). In the 1950s and 1960s the homeless consisted primarily of older white adult males living in relatively confined areas (i.e., so called “skid row”). The average of today’s homeless is in the mid-30s and 20 to 30% are female. Although better educated, today’s homeless are poorer and less frequently employed. There are much larger proportions of minorities, with blacks and Hispanics comprising approximately 50% of the population. Perhaps the most disturbing trend has been the large number of families now homeless. In 1986-1987, families composed 63% of the New York shelter residents, 43% of Kansas City residents, and 30% of Seattle residents. Approximately one third of the homeless suffer from severe psychiatric disorders, 50% have problems with substance abuse and 8 go 22% suffer from combined substance abuse and mental disorders (Susser et al., 1989, Dennis et al., 1991).

Description and Critique of Current Programs
Until recently there has tended to be a dearth of coordinated initiatives dealing directly with the homeless problem. The Steward B. McKinney Homeless Assistance Act enacted in 1987 was the first comprehensive Federal initiative providing funding for emergency food and shelter as well as a variety of other services and programs including substance abuse treatment, health care, mental health services, housing, educational programs, job training and model service delivery and treatment programs. Although increased funding and coordination of services has helped to ameliorate some of the problems of the homeless, programs have frequently been critiqued for their organizational difficulties or lack of effectiveness (Goldfinger et al., 1984, Bachrach, 1984, Morrissey et al., 1986). Some of the difficulties include the following:

1. There is often a low utilization of services by the homeless.
   Explanations for this include the transient nature of the population as well as the unsatisfactory level of services. Many of the shelters, for example, are considered to be unsafe with drug abuse and criminal behavior commonplace. Requisite services such as psychiatric care for the seriously disturbed are often not adequately provided for.
   
   
2. Entitlements rather than employment form the mainstay of the efforts to help the homeless.
   Although offering immediate monetary relief, the easy availability of government income subsidies often results in lowered motivation and avoidance of vocational opportunities. This system, in conjunction with the dearth of viable vocational opportunities, leads to a cycle of dependency that is difficult to break.
   
   
3. The social disconnection that is central to the homeless experience is not effectively addressed.
   Simply offering services to an individual devoid of constructive family and peer supports does not adequately address this core problem. The lack of suitable supports is particularly problematic in substance abusers, as peer supports encourage participation in this self-destructive behavior.
   
   
4. Services are often fragmented and the referral process difficult.
   The multiple educational, vocational, social and psychological programs required by the homeless are often available, but administered through separate agencies and providers. Referrals often can only be initiated through other social service agencies, frequently taking months to effect and often resulting in rejection for the most needy or impaired. The fragmentation of services is not only costly but often results in frustration and decreased individual motivation among the homeless.
   

Economics of the Homeless
Homeless individuals have frequently been viewed as “troubled and troubling” and approaches to aid the homeless have often therefore been focused on the moral, social, and/or psychological rehabilitation of these problem individuals (Hopper, 1990). Prevailing economic conditions, however, have repeatedly been demonstrated to be directly related to the extent of homelessness. Large scale increases in homelessness resulting from the great depression of the 1920s and 1930s, for example, diminished quickly when the services of these disadvantaged and displaced individuals were required to sustain the war initiative.

Although many of today’s homeless do have significant problems interfering with their ability to integrate themselves into the job market, a sizable proportion has been employed previously. Jones et al. (1986) found that 91% of New York shelter residents reported having prior work experience, 31% of these having performed skilled technical work. This was similar to the 87% previous employment rate reported in a cohort of 979 homeless individuals in Ohio (Roth et al., 1986). Rossi et al. (1987) found that although only 4.2% of a sample of homeless individuals in Chicago were currently holding a steady job, a substantial minority (38.9%) had worked within the month prior to the survey.

Nevertheless, most current programs pay relatively little attention to vocational opportunities and development. MacFarlane (1991) tabulated services available to the homeless of New York listed in a resource manual (New York State Coalition for the Homeless, 1989). As is delineated in Table 1, there was an overwhelming emphasis on psychosocial services and rehabilitation as opposed to vocational services and opportunities. Of the over 650 services offered a scant 7 (1.1%) related to job training programs and 5 (0.8%) related to job referral services.

Despite the low number of vocational programs, several successful initiatives have been developed. Some major corporations have developed programs employing the homeless (Stack, 1989) although most large-scale programs have been initiated through non-profit agencies and involve pre-employment counseling and training with subsequent job referral. The Restart program in Dallas, for example, offers a five-and-a-half week job readiness program along with housing and other social services and reports a 75% completion rate and 80% placement rate for graduates (Jacobs, 1990). A review of 23 revenue-generating programs for the homeless and other socially disadvantaged (Community Planning Workshop, 1989) indicate that a variety of businesses have been formed specifically to employ and/or train the homeless and other socially disadvantaged including bakeries, retail shops, construction firms, recycling operations among others. Corporate Cookie, for example, operates a cookie and frozen yogurt shop in Los Angeles and employs homeless and individuals with a history of mental illness. Although certified as a sheltered workshop, it is operated as a competitive business and manages to cover 80 to 90% of expenses through gross revenues of $15 to $20,000. The ARCH program (Action to Rehabilitate Community Housing) is a public/private partnership funded jointly by the Potomac Electric power Company (PEPCO), Washington, D.C. and the Department of Labor through the Stewart B. McKinney Act. ARCH is directly responsible for the rehabilitation of abandoned and low-income buildings and hires or trains homeless and other at risk individuals in a 13-week building trades program. Motivation for PEPCO’s commitment appears to be derived from a combination of factors including altruism, public relations as well as self-interest. Through the program PEPCO is able to stabilize low income areas important to its customer base while developing nearby residencies.

Alternatively, the expenses incurred by government in caring for the homeless are high. Housing and feeding a single adult male in the New York City shelter system costs approximately $30 per night. Provision of entitlements, special programming and health benefits add significantly to this base cost. The social costs of these policies aside; the resultant tax burden upon the municipalities is impressive and potentially hampers economic growth. This growth might in turn serve to reverse the fortune of some of the homeless.

Deficient Social Networks Among the Homeless
Although factors such as economic downturns and housing shortages clearly contribute substantially to producing homelessness, the lack of normal and effective social ties also plays a central role in initiating and maintaining homelessness. Several investigators have found that homeless individuals have fewer social ties, more negative social relationships (e.g., higher levels of violence or abuse) or are less able to rely on their networks for support (Shinn et al., 1991, Bassuk & Rosenberg , 1988, Wood et al., 1990). Rossi et al. (1987) noted that approximately 25% of homeless individuals have no contact with relatives or friends, more than half have never married and divorce and separation is common among those that have married. There also appears to be a higher incidence of early childhood traumas and separations (e.g., placement in foster homes) among homeless individuals in general and in particular among those suffering from psychiatric disorders (Susser et al., 1987, D’Ercole et al., 1990). Not only can early and ongoing socially isolating and destructive experiences result in disturbed and erratic behavior, the lack of suitable role models makes the learning of more socially adaptive behaviors difficult.

Proposed Organizational Solution
As an alternative to traditional government supported psychosocially based programs, we suggest an economically centered socially cohesive model be adopted. The model is depicted in Figure 1 and has the following components.

A. Economically Centered Program
We believe that offering immediate employment and helping the individual maintain this employment should be the mainstay of the rehabilitation and the reintegration process. In contrast to so-called “sheltered workshops,” we suggest that employment at regular for-profit concerns is more suitable for many of the homeless. Not only is this more economical, it also allows for effective integration of the severely indigent into mainstream businesses. Furthermore, we propose to organize the homeless work force into small cohesive work teams as is frequently advocated by modern management theory (Ghosh & Song, 1991, Hutchins, 1985, Ishikawa, 1985). The implementation of this organizational structure will simultaneously serve two ends. First, since these techniques have been demonstrated to increase levels of quality as well as productivity, the goods and services provided by the homeless workforce are expected to be competitive at the market place even if the work force is disadvantaged. Second, the work teams will form the nidus by which a cohesive social network will be re-established.

Work for the homeless is expected to come from several sources. Independent work contracts involving relatively basic tasks (e.g., simple assembly, packaging and delivery operations) will be obtained from a variety of corporations. In addition, active collaborative liaisons with well-established independent corporations will be established. In order to encourage these profit concerns to “invest” heavily in this disadvantaged population, cooperative attempts will be made to obtain private and government contracts for the goods and services produced. Since large corporations often have some preferential purchasing programs or “set asides” for socially dedicated initiatives, easier access to major distributors is expected. Furthermore, through government sponsored training grants available to for profit concerns, higher labor costs can be offset. It is hoped that this combination of economical incentives will result in large scale hiring of the homeless and several corporations have expressed significant interest in the program.

B. Social Network
Central to the success of the initiative is the formation of a supportive and ongoing social network. Cooperative group initiatives have not only been shown to improve task performance, but hey also result in a variety of intra-and interpersonal benefits including facilitation of learning, greater social competence and improved feelings of self worth (Johnson & Johnson, 1983, Tjosvold, 1984). In addition to the small work groups, group social activities and living arrangements will be encouraged and coordinated through at the work site. By helping to re-establish and reinforce normal social and familial relationships, it is hoped that the social disconnection that is often central to the homeless experience will be vigorously addressed.

C. Employee Assistance Plan
Psychological, psychiatric, and medical services will be coordinated through an active and comprehensive corporate employee assistance program, thus ensuring that high quality of services are obtained by the employees. In addition to these basic services, a strong advocacy role will be taken in order to aid the homeless find permanent housing and obtain other social support services critical to this population. Liaisons with established not-for-profit agencies will ensure that these opportunities and services are effectively provided. Particular emphasis will be placed on educational and vocational opportunities in order to foster career advancement.

Results of a Pilot Program
In order to test the underlying premises of the model, contracts involving simple assembly and packaging operations were obtained from a corporation several blocks from a shelter in the South Bronx. Four homeless women currently housed at the shelter and defined as “job ready” by the shelter staff were hired. One dropped out after the first day due to lack of interest. The 3 remaining recruited 2 homeless friends, resulting in a total of 5 employees. The screening process was brief, consisting of a targeted interview assessing the prospective employee’s desire to work and capacity to handle simple work assignments. All of the women had previous vocational experience, but none had been recently employed at the time of hiring. The length of residence in the shelter system varied from a few months to several years. Four of 5 had histories of serious drug problems and were soon to be enrolled in an intensive 3 month residential substance abuse program.

Contracts were completed at the parent corporation over a period of 2 to 3 weeks. The employees were informed that this was a regular job and that standard rules of work behavior would have to be adhered to. Furthermore, they were organized into compatible work teams and were told they would eventually be expected to monitor the pace and quality of the work with little direct supervision. Supervisors, rather than simply observing, worked along with the team in the assembly process. Management actively worked to ensure that interpersonal and work problems were dealt with quickly and effectively and that the work experience was a pleasant one. Furthermore, employee suggestions as to ways of improving the production process were actively solicited and several constructive ideas were generated and implemented. The group responded well to the project and, after a brief training period, was able to meet the rigorous quality standards of the contract corporation. Motivation and interest in the program was strong as exemplified by the homeless employees showing up early to work, attempting to recruit several of their homeless friends into the program, as well as making repeated requests for resumption of work several months after the contracts were completed.

Summary and Conclusions
Homelessness in the United States has been escalating throughout the last decade and has defied traditional solutions. We contend that a new organizational model is required to ameliorate this seemingly intractable problem and propose an economically centered socially cohesive one. The proposed private-sector model has several advantages over current programs including the following:

1. It is a non-entitlement based revenue-generating model requiring no external funding other than existing vocational training grants for corporations working with the socially disadvantaged.
   
   
2. Collaborative relationships with established for-profit businesses minimize start up time and costs while leveraging the number of jobs produced at regular work-sites.
   
   
3. Organizations of the work force into small cohesive work groups simultaneously ensures competitiveness of products and services produced while vigorously and directly addressing the social disconnection of the homeless at the workplace.
   
   
4. Needed health and social services will be coordinated through an active employee assistance plan, assuring provision of high quality comprehensive services.

Interest form the business community has been strong and a brief pilot project appeared to confirm several of the underlying premises of the model. An extended pilot program is currently underway in order to determine which specific management techniques are most applicable to this population as well as the economic viability of the initiative.

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