Two Faces of Welfare Reform: More People Work, Some Fall Behind

 

WASHINGTON - In the 1996 overhaul of the welfare system, Congress directed states to "end the dependence of needy parents on government benefits by promoting job preparation [and] work." In the three years since the law was enacted, the Clinton administration and the states have heralded success in reducing dependence as caseloads have dropped 35 percent nationwide.

Now, evidence is mounting that states are making progress in fulfilling the second half of their new mandate: increasing reliance on work. Recent reports from 13 states detailing life after welfare show rates of employment that are, in almost every case, higher than expected and, in a number of states, higher than were achieved under the old welfare program, Aid to Families with Dependent Children (AFDC). With these follow-up reports, states for the first time are furnishing information on how former welfare recipients are faring in the post-reform era.

Most studies of welfare recipients prior to reform found 40-50 percent worked after leaving the rolls. Today, many states are surpassing or meeting those marks.

The Urban Institute will soon release a report backing up the state data. UI researcher Pamela Loprest has found that women who left welfare in 1997 entered the workforce at almost the same rate as low-income mothers who had not relied on welfare. In the post-welfare families Loprest studied, 75 percent included one working adult. Among other low-income families, 86 percent included at least one working parent.

"The early data suggests that leavers are doing better than social scientists would have predicted," said Thomas Kaplan of the Institute for Research on Poverty.

The states and the federal government are not touting these results as loudly as they are trumpeting the precipitous drop in caseloads. There are caveats to the data; If, as state reports indicate, at least half to two-thirds of former welfare recipients are working, then a third to half are not.

Now, as in the past, the Americans who rely on public assistance have few skills and, when they leave welfare for work, they tend to land low-wage, unstable jobs that offer few benefits. Many former recipients report falling behind on rent while watching electricity and gas bills mount.

What emerges from a review of the state surveys is a picture of families in poverty struggling daily to make ends meet, but determined to survive on their own.

"There isn't enough evidence to indicate welfare reform has made things worse," said LaDonna Pavetti, of the research institute Mathematica. "I have always believed that there will be families who will benefit from welfare reform and families who won't."

Although some families will suffer greater hardships under the current system, Pavetti said, ultimately reform will benefit many people. If the results of these state surveys are any guide, that may be happening already.

In Washington State, the Department of Health and Human Services telephoned 300 former welfare recipients who had left the rolls six months before. More than 70 percent reported they were working. Only 16 percent said that since leaving welfare, they had never had a job. Of all former welfare recipients contacted by their states, those in Washington reported the highest wages, about $8.00/hour, on average, over a 36-hour workweek.

At that rate, a mother of two children in Washington can double her monthly welfare income of about $550 a month.

Wisconsin is the national leader in reducing welfare rolls. Since 1993, its caseload has fallen 87 percent, from 81,291 to 10,185.

For that reason, reform advocates eagerly awaited the results of Wisconsin's first report on life after welfare. They were not disappointed. In a statewide survey, about 62 percent of former recipients in Wisconsin said they had jobs, with earnings averaging $7.42/hour. Those who worked said they had held the same job an average of 61 weeks, a high rate of retention for workers generally consigned to the least desirable positions.

According to Jean Rogers of the state's Department of Workforce Development, the work rate of former welfare recipients in Wisconsin is very close to the average regular employment experience of working people in general.

"In Wisconsin, there's no going back. There's no putting Humpty Dumpty together again," said Lawrence Mead of New York University who has studied Wisconsin's reforms closely and believes they are working. Even less enthusiastic observers agree that Wisconsin's emphasis on work, stronger than that of most states, has contributed to its success in moving people into jobs.

In Georgia, 65 percent of the adults who left welfare in early 1997 found jobs within three months. Most of them continued working for the next year. South Carolina found 62 percent worked. Wages were lower than Wisconsin and Washington, however, averaging $6.44/hour.

Texas reports 59 percent are working, Florida, 56 percent, Pennsylvania, 53 percent, Kansas, 50 percent, Arkansas 50 percent and Oklahoma, 50 percent. Maryland reports an employment rate of about 50 percent for welfare recipients a year after leaving the rolls.

Kentucky is the only state to find fewer than 50 percent of its former recipients had jobs. Only 44 percent of welfare leavers in Kentucky were working when researchers spoke to them.

Researchers have long known that wages of the lowest paid do not tend to rise much over time. Even so, two states report that former welfare recipients who have stayed at their jobs are bringing home more money.

"What they're doing is increasing the number of hours they are working," said Jack Tweedie of the National Conference of State Legislatures.

In looking at earnings over the course of a year in Maryland, researcher Catherine Born found that they did rise on average, from $2369/quarter at the beginning of the year to $2646/quarter at the end. Arkansas also reported an increase over time. In the first quarter after leaving welfare, 16 percent of leavers in Arkansas made enough to escape poverty. A year later, 27 percent did.

For the most part, former welfare recipients report finding jobs on their own, with little help from the welfare office a further indication that the tough new work rules are as much behind the decline in the welfare rolls as any job preparation services offered by the states.

In Washington State, 80 percent said they found their jobs without the help of the welfare office. In Texas and Kentucky, only 20 percent reported receiving help from a caseworker or other state resource. In Florida, 12 percent said the state's program had helped them find a job.

In every state, most are working in the service and sales sectors of the economy. Welfare leavers are cooks, dishwashers, cashiers, store clerks, cleaning women and attendants to the elderly. Most do not receive medical insurance or vacation or sick pay from their employers.

Although some states report former recipients on average earn enough and work enough to lift their families out of poverty, in reality most will not.

Even advocates for the states caution against reading too much into the data at this stage. "The direction is good," said Tweedie. "It would be nice to see it continue."

How much is the economy a factor? No one really knows. Nearly everyone agrees, however, that the new rules have combined with a strong economy and expanded tax credits for the working poor to produce these positive results. Many also believe, when the economy heads south, the number of welfare recipients who find work will also drop.

"We can't economy-proof a welfare-to-work program," Tweedie said.

In light of the strong economy, the reports of families already spiraling into destitution are particularly troubling. In our next report, which will appear on this site on Tuesday, stateline.org will look at why former recipients are not working. 

 
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