New York Welfare Numbers Surprise Experts

New York was hit hard economically as well as emotionally by the devastating 9/11 attacks, which came just as the state was feeling the effects of the national recession. Thousands of people lost their jobs and businesses shut their doors. Yet state officials say the number of people leaving the welfare rolls, which have shrunk by more than one million people over the last seven years, continues to drop.

The Empire State's experience bucks a nationwide trend of increasing numbers of people on welfare. At least 30 states saw rises in the number of welfare recipients over the past year, Jack Tweedie, a policy expert at the National Conference of State Legislatures (NCSL), said.

Some statesArizona, Indiana, Montana, Nevada and South Carolina reported increases of more than 12 percent, the NCSL said. Massachusetts and Mississippi had welfare caseload increases of 10 percent.

Tweedie said it's hard to say why some states had more people enrolling for welfare benefits. "There aren't any common denominators or regional patterns. We really can't find a connection," he said.

New York Senator Ray Meier, a Republican who serves as chairman of the Senate Social Services Committee, said what's happened in his state defies conventional wisdom. "Everything that we know that's going on because of 9/11 and the stock market should produce caseload increases. In New York we're not seeing them."

Jack Madden, a spokesperson for the Office of Temporary and Disability Assistance, the state agency that oversees welfare reform, said the recession seems to have affected more middle-and higher-wage jobs than entry-level positions. "Traditionally entry-level jobs are on the rung of the ladder (welfare recipients) begin with," he said.

NCSL's Tweedie said former public assistance recipients in New York who lose their jobs don't seem to go back to welfare offices. "They're going to the unemployment office and the numbers reflect that," he said.

New York cut 30,000 people from the welfare rolls last spring because of federal time limits- something that clearly helped the numbers go down. But Madden said that doesn't mean people have been cast adrift. The state's transitional assistance programwhich helps former welfare recipients keep working by paying for things like health care and child careis "very helpful in keeping people employed," he said.

Meier credits the state's earned income tax credit (EITC) program with welfare reform's success. It allows low-income individuals to get a tax refund whether they owe income taxes or not. Ten states and the District of Columbia have similar EITC programs.

"What you're doing is you're using money that used to be spent on cash assistance... to subsidize work. The earned income tax credit, combined state and federal, has the effect of producing a minimum wage of something like $7.50 an hour in New York," Meier said. The federal minimum wage is $5.15 an hour.

Some policy experts said it's not yet clear if the EITC programs really do help people on welfare.

"We are happy to hear New York's caseload has not increased. But we don't know of any research on the earned income tax credit that to date has assessed how it's helped women entering and sustaining employment," said Lynne Fender, senior research associate at the Urban Institute.

Whatever works for states, a key issue for policymakers right now is whether Congress will reauthorize the 1996 federal welfare act before it expires in October.

California Assemblywoman Dion Aroner, a Democrat, recently told the odds are not favorable. "Homeland security (is on the agenda) and there's the whole thing with the stock market. I'd give welfare reauthorization a 50-50 chance," she said.

Meier, who co-chaired a national state task force on welfare reform with Aroner, agreed that states will have problems if Congress doesn't reauthorize the program.

"It makes it very difficult to plan long-term. We are dealing with families that we have moved to work who require continued supportive services over the next few years. It is really not smart social policy to tell us, 'you may have work that extends several years out into the horizon but we're only going to promise you funds for one year,'" he said.

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