It is the type of story that warms a welfare reformer’s heart.
Faced with a looming loss of her benefits, an unmarried Green Bay mother found the first job outside her home that she ever had in her life.
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But, after receiving her first paycheck, she became angry. She said she was going to quit. She was being cheated, she told her caseworker. Her employer was not paying what he promised.
After examining her pay stub, her caseworker quickly figured out the problem. Nobody had warned the woman about something called withholding taxes.
That’s life in the world of work. One paycheck and already she is complaining about taxes. I heard quite a few stories like that last week from social workers and other service providers at Wisconsin’s annual Governor’s Employment and Training Conference in Madison.
But so far the good news about welfare reform has far outweighed the bad.
If you want to study what works in welfare, Wisconsin is a great place to start. Since the beginning of 1993, Wisconsin has reduced its welfare rolls by 49 percent, followed by Oregon’s 43 percent and Indiana’s 42 percent. Nationwide, welfare rolls dropped 20 percent during that period, 11.3 million people from 14.1 million, the largest drop in the past 20 years.
The causes of the welfare decline are hard to pin down, according to an analysis the President’s Council of Economic Advisers released on May 9. Yet, the report gives a good try. It attributes 40 percent of the decline to the 5-year-old economic boom and about a third to federal waivers that freed state governments to experiment. The analysis attributed the rest to a variety of factors that eased the transition from welfare to work, including expansion of such important working-poor benefits as the earned income tax credit.
Significantly, the biggest successes have come in states that now sanction recipients who do not comply with work requirements, according to the council. Although it is hard to tell just how many have fallen through the cracks, “doubled up” with relatives or gotten married to an income provider, most appear to have entered the world of stable work, many for the first time.
Politically, that’s good news for Republicans and Democrats. But if 40 percent of the decline in welfare rolls is a direct result of the healthy economy, what happens to those recipients when the economy turns unhealthy?
That question still concerns Secretary Donna Shalala, of Heath and Human Services, she said in a press briefing in Washington with Janet Yellen, chairman of the economic council. But, fortunately, Shalala added, the 20 percent drop in the rolls has delivered a big bonus to the states in welfare savings that many are socking away in anticipation of future needs and to reach those welfare recipients who have fallen between the cracks or otherwise failed to reap the benefits of reforms.
“This is going to be the most studied social policy of any in the past 20 years,” Shalala said. Numbers will have to be crunched and families followed. It is still too early to tell whether the first wave of success stories is just the cream and how difficult the next wave will be.