Welfare Reform’s Broken Promises Exposed Again

Isaiah J. Poole

Rep. Paul Ryan (R-Wis.) says he wants to double down on so-called “welfare reform” from his new perch as speaker of the House. But Ryan should first look at the experience of Maryland, and specifically to a recent study that exposes the broken promise of welfare reform.

That study, by researcher Lisa Thiebaud Nicoli at the University of Maryland School of Social Work, is one of the remarkably few efforts to actually chronicle in detail how welfare recipients actually fare once they get back into the workforce. The story for a majority of people in Maryland who exit Temporary Assistance for Needy Families – the official name of the federal welfare program – is “a struggle to earn enough to achieve self-sufficiency” and make ends meet, the report said.

“Clients are able to find jobs, and most of them want to work,” Nicoli said in an interview. “The problem comes in the ability to find jobs that allow them to become self-sufficient and then in maintaining those jobs.”

This is the inconvenient truth that the coalition of conservatives and New Democrats – led in the late 1990s by President Bill Clinton and House Speaker Newt Gingrich – for the most part continue to willfully ignore: The central problem is not that poor people are dysfunctionally mired in a “culture of dependency”; they are mired in a rigged economy that does not properly reward work and is riddled with obstacles that make it too difficult for people to climb up the economic ladder.

Nicoli’s study looked at the experience over five years of more than 4,000 Maryland households that had received benefits between 2001 and 2009 and who were required to find work as a condition of receiving their benefits.

The study found that 35 percent of the recipients in the sample worked a full year in the first year after ending welfare benefits, and that percentage increased to almost 37 percent at the end of five years. But the percentage who did not work at all rose from 27 percent in the first year to more than 37 percent in the fifth year.

More significant is the “employment trajectories” of recipients, a view of recipient work experiences over time: 22 percent of the recipient sample experienced “stable employment” – three or more quarters of work each year. Another 21 percent had work histories that improved over time to varying degrees. But 18 percent experience “stable unemployment” – one quarter or less of work each year – and an additional 24 percent had work histories that worsened over time. About 15 percent had work histories that were inconsistent. In general, people who did not experience stable employment were at least twice as likely to have to reapply for cash assistance than those who did.

In terms of earnings, only about 8 percent of the group had earnings above the poverty line for a three-person family through a five-year period. More than one-fourth had continuously low earnings – less than $7,540 a year or the equivalent of a 20-hour-a-week job at the federal minimum wage.

These findings are significantly a consequence of the inadequately addressed barriers poor people face when they are trying to get on firm financial footing. Often education requirements are a hurdle that welfare reform restrictions worsen, since there are not only limits on how much time aid recipients can spend on educational activities, including high school equivalency and vocational training, but on the percentage of a state’s total caseload that is involved in education.

There are also such logistical hurdles as the high cost of child care and the absence of reliable public transportation that connects people in lower-income communities to where the jobs are.

Perhaps most fundamentally, it should not be surprising that a 21st-century economy that has left middle-class families with stagnating wages or worse is leaving poor families with an even worse deal.

In the high-growth, low-unemployment, tight labor market of the late 1990s, “I think the idea of ‘work first’ made a lot more sense,” Nicoli said. “But since the Great Recession, it has been more difficult for clients to find jobs, and wages have still not recovered for a lot of people.”

Even for those who fund stable employment, “people aren’t able to increase their wages over time, and I think that’s really problematic because you have people who are trying to consistently out forth the effort that they need to earn a living but are then unable to see that effort rewarded through increased wages,” she said.

The New York Times’ Eduardo Porter wrote in a recent column on antipoverty programs that “the apparatus of government assistance has turned its back” on the poor, based on a misguided effort to “target most of our help only to those who can help themselves” based on “a blinkered understanding of what perpetuates the deep, intractable poverty that affects many communities.”

This “serves a purpose,” he wrote. “By believing the poor are not exerting enough effort, we allow ourselves not to care.”

If there were more studies of the effects of welfare reform like Nicoli’s work at the University of Maryland, we would have a more informed sense of how a broken economy places an undue burden on people who, usually through no fault of their own, have no room for error. Unfortunately, as Nicoli notes, there is little adequate research – just ideological postulation.

Nicoli’s study concludes that “we should reexamine the work-first philosophy that undergirds welfare reform and most states’ TANF [Temporary Assistance to Needy Families] programs.” One recommendation is to improve the connections between aid recipients and the kind of workforce training that leads to good-paying jobs with advancement potential.

But it is also clear that if we want more people to be self-sufficient, we cannot keep fostering the conditions that lead to slack labor demand, stagnant wages and weak growth in the kind of high-quality jobs that offer growth opportunities. The next time Paul Ryan talks about welfare reform, remember that he opposes an increase in the minimum wage, more bargaining power for workers, and is against shifting our fiscal policies away from tax cuts for the rich and toward investing in the needs of struggling families and communities. In other words, it’s just more broken promises.

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