Millions of Americans are experiencing real independence for the first time this Fourth of July – they are off welfare.
Welfare reform has been perhaps the most important public policy initiative this decade, and indications are that the current trend will continue.
Nationwide welfare caseloads are down about 27 percent, or more than three million people. Some of the states have done very well, with caseloads declining by 60 percent or more. Other states – California, Hawaii, Alaska and New York – and Washington, D.C. have not done so well. As a result, many of the citizens in those states who could have been celebrating a personal independence day are still in the grip of the welfare state.
There are reasons for these states' lack of success. It's called "perverse incentives." For example, California and New York, along with 14 other states, keep noncitizens on state aid. The General Accounting Office (GAO) reports that about $1 billion was spent in 1995 on cash and food stamps for the children of illegal immigrants.
But don't let some states' lack of success spoil the holiday. Three million people have gained independence, and that's a reason to celebrate.
Ironically, both liberals and conservatives have long agreed that the best thing we could do for welfare recipients was to help them find a job. The difference is that conservatives had no illusions about what kind of job that would be. Most people start off in lower-paying jobs and, after years of training and experience, move up the ladder.
Conservatives always believed that was the only realistic future for welfare recipients. The key was finding them a job, even if relatively low paying, that would give them a chance.
Liberals, by contrast, have never liked that approach. They always wanted welfare recipients to start out at fairly high-paying jobs, so they could earn a "living wage." Since many welfare recipients did not have the skills to get such a job, liberals pushed for more education opportunities. Some welfare recipients took advantage of those opportunities and were successful, but the vast majority didn't.
Tired of waiting, successful states simply told welfare recipients to work or get off welfare. That approach had an immediate impact: most welfare recipients went to work.
How did this all come about? Several states got serious about putting welfare recipients to work. Take, for example, the plan developed by the American Institute for Full Employment and adopted by Oregon, Mississippi and several other states. Under this approach, most welfare recipients go to work immediately. Indeed, the Full Employment plan basically guarantees a welfare recipient a job.
Social workers help the welfare recipient find an unsubsidized job if possible. Otherwise, the federal and state money that was used to fund the food stamps and welfare checks is used to provide recipients with subsidized, private-sector jobs – a subsidy that encourages employers to create positions for welfare recipients.
The Full Employment plan guarantees that the those taking the jobs will be better off financially working than they were on welfare, and it prohibits employers from laying off current workers in order to fill the slots with lower-paid welfare recipients.
Perhaps most importantly, the plan provides health insurance coverage and child care for a specified period as welfare recipients move into the workforce.
What has been the result of these efforts? Are governors and state legislators in the most aggressive welfare-to-work states being criticized for throwing poor people out in the streets? Just the opposite. They are being inundated with letters from former recipients who thank them for helping them break the cycle of dependency. They claim that after years on welfare they had lost faith in themselves, afraid they could never hold a job again and ashamed to admit it. Putting them back in the workforce has restored their confidence and given them new hope for the future.
That's real independence.