Once upon a time, in the political campaigns of the 1980s, the idea of requiring welfare recipients to work for their benefits was considered radical. Liberals and moderates (and most conservatives) thought it shocking, for the economic and social devastation that is a result of the welfare state was not yet apparent to everyone.
All that has changed. Welfare reform that emphasizes putting welfare recipients to work is sweeping the country. According to the Department of Health and Human Services (HHS), between January 1993 and July 1997, the number of people on welfare in Mississippi declined by 50 percent, in Colorado by 51 percent, in Oregon by 52 percent, and in Wisconsin by 58 percent. And Wyoming's welfare cases dropped by an astounding 73 percent.
But in the midst of this welfare revolution, there are startling differences in outcomes among various states. California, for example, experienced a decline of only five percent and Washington, D.C., a mere two percent. And Hawaii had a 36 percent increase in welfare rolls. How come? Are there programmatic differences among states that might hold some lessons for successful welfare reform?
Yes, there are. The biggest difference is commitment, as Merrill Matthews Jr. and Kristin Becker show in a recent study from the National Center for Policy Analysis. Analyzing lessons from the best and worst state welfare programs, they point out a number of obstacles to welfare reform.
(1) Elected officials who refuse to pass strong welfare-to-work policies. Some elected officials remain unconvinced that welfare-to-work policies are effective. Moreover, they are often reluctant to move welfare-to-work legislation for fear of being attacked as enemies of the poor.
(2) State welfare bureaucracies that are unwilling to implement legislated welfare reforms. One of the biggest hindrances to effective welfare reform is the recalcitrance of government employees who deal with welfare cases daily and can impede any reform legislation. Wisconsin has helped solve this problem by providing incentives for them to decrease the caseload.
(3) Public employee and other labor unions that fight welfare-to-work legislation or try to burden employers who hire welfare workers. Public employee unions are concerned that dramatic declines in welfare caseloads will lead to job losses by their members. Of course, the fear of government downsizing is exaggerated. Even though caseloads are declining dramatically in some states, clients who remain on welfare often need significant help to become job-ready. For example, they may have substance abuse problems, physical abuse histories or learning impediments. Social workers with fewer clients will finally be able to focus on those who need more assistance.
In addition, labor unions can also undermine welfare reform. In response to union concerns, the Clinton administration directed that most federal labor laws, including the minimum wage, apply to welfare recipients, and Congress declined to overturn the directive. This will hamper states' efforts to deal with some welfare cases.
(4) Failing to emphasize the need to go to work immediately. Federal reform legislation requires states to move welfare recipients into work, but still permits recipients two years of benefits. About 20 states have passed legislation reducing the maximum time limit, with 11 of those requiring recipients to go to work immediately. However, others have made little attempt to tighten the time frame and are experiencing a slower decline as a result.
(5) Willingness to provide education and training without requiring work. Successful states know that the best training occurs on the job. Yet the federal government and many states provide expensive, time-consuming training programs or pay college tuition for courses that seldom lead to a job.
(6) Paying extremely high benefits. People on welfare often face a choice between taking a low-paying job with few or no benefits and collecting welfare. The higher the welfare compensation package (i.e., cash plus benefits such as Medicaid, housing subsidies, etc.), the harder it is for social workers and employers to move recipients from welfare to work. Many states offer welfare compensation packages two to three times higher than the minimum wage. While no one advocates reducing benefits to zero, providing excessively high benefits deters people from accepting perfectly decent jobs.
Hawaii's relaxed welfare rules permit eligible persons to receive benefits the first day they enter a welfare office. And, according to Michael Tanner of the Cato Institute, welfare recipients in Hawaii receive the largest welfare compensation package in the country, with an annual pretax wage equivalency in 1995 of $36,650, or $17.62 per hour.
The question is not whether states can make welfare reform work. Many already have. The question is whether opponents — whether elected officials, government employees or unions — will scuttle these efforts and sentence millions of Americans to the continuing cycle of poverty and despair.