Letter to the Editor, from the Chicago Sun-Times, August 25, 2006

By Ellen S. Alberding, president of the Joyce Foundation

Ten years ago, following the lead of Midwest states like Wisconsin and Michigan, Congress passed and President Clinton signed landmark legislation to “end welfare as we know it.”

All through the late 1990s and beyond, people left welfare in droves, and people who might once have applied stayed away. Today the welfare rolls are a fraction of what they once were; 2004 figures (the latest available from the federal government) put the Illinois caseload at 35,660--just 17 percent of the 208,646 families on the rolls in 1994. Most other Midwest states saw similar, if less dramatic, declines.

What happened to the hundreds of thousands of families whose presence on the welfare rolls created so much angst? Thanks to researchers who have been following former welfare families here in the Midwest, we have some of the answers. What we don’t seem to have is the energy, so strong in the mid-1990s, to create another round of reform that works for these families.

Most former welfare recipients did what we asked them to do – they went to work. They took the jobs that were available, often part-time or temporary. Researchers at the University of Chicago found that, in Milwaukee, the percentage of welfare applicants who worked at any time during the year peaked at nearly 79 percent in 1999, before declining to 59.5 percent in 2003.

Families who moved from welfare to work are generally better off than those who remain on the rolls, the studies show. But most former recipients still remain poor. After generally rising through the first few years of welfare reform, their wages have stagnated. A study of Illinois families, by researchers at Northwestern and elsewhere, found that in 2002, 89 percent of those who were working and no longer on the rolls still lived under the poverty line. A Michigan study found working respondents earning a median wage of $6.66 an hour (in 2003 dollars) in fall 1997. That rose over the next four years to $8.35 an hour (a wage that, full time, still leaves a family of four in poverty), then stayed level.

Besides low wages, many former welfare recipients have health problems, low educational levels, or lack of child care. These issues prevent some from getting jobs and make it hard for others to stay employed. With low wages and unstable employment, many families continue to rely on food stamps, Medicaid, and other government assistance to get by. That’s partly because states, even as they discouraged people coming onto welfare, have supported working families; in Ohio, caseloads for Medicaid, food stamps, and (to a certain extent) child care benefits rose even as welfare rolls shrank.

All the studies have observed an ominous increase in the numbers of former assistance recipients who are neither receiving welfare nor working. In the Illinois study, the percentage of participants neither working nor receiving aid rose from 17 percent in 1999-2000 to 43 percent in 2003. Not much is known about how they get by.

Federal policies could do more to help all of these groups. But the reauthorization of the welfare reform law, which Congress did quietly this spring, largely sidesteps their concerns.

Instead, it tightens up requirements about the percentages of welfare recipients who must be engaged in some form of work activity. And the new regulations limit what type of education can be counted as a “work activity,” as well as the duration of substance abuse or mental health counseling – the very things most current recipients need if they’re actually going to have any chance at stable employment. Experts worry that states will be forced to choose activities that do little to advance recipients' long-term prospects, and forego activities that do help but cannot be counted toward the federal requirements.

Even with these new constraints, states need to strive to resume the progress of the late 1990s. They need to reexamine their programs, in light of the new regulations, to rethink what can most effectively help families get decent jobs. They still have some flexibility. They can use their resources, as Ohio has done, to support low-wage workers; they can refer people for vocational training, which is allowable for up to 12 months; or they can support transitional jobs programs, which provide short-term subsidized employment and services to help the hardest-to-employ.

Federal policy, meanwhile, needs to take on the real unfinished business of welfare reform: the need for better policies to address the needs of the vast number of Americans – including former welfare recipients – who make up the working poor. Investing in workforce development, expanding unemployment insurance to cover more low-wage workers, expanding the earned income tax credit, and increasing the minimum wage could make a big difference for these families.

The vast majority of people on welfare did what was asked of them a decade ago – they went to work. We need to honor their progress and take welfare reform to the next level, by getting the right services to those who can’t work yet – and helping those who are working to escape the poverty that welfare once confined them to.