The “success” of workfare when jobs are scarce

September 29, 2011

This year marks the 15th anniversary of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), the Bill-Clinton- and Newt-Gingrich-led overhaul of cash assistance to poor families with children.* One of the major changes of that law was adding work requirements so that most cash assistance applicants (generally single mothers) couldn’t receive help without heading into the world of market-based work.** When the bill passed, and unemployment was below 5%, there was some concern about what would happen when the economy slowed and jobs weren’t as easy to come by.

We are now finding out. As this graph from the Center for Budget and Policy Priorities shows, as unemployment has sky-rocketed, and other social safety net program like SNAP (a.k.a. food stamps) have seen a surge in participation, Temporary Assistance for Needy Families (TANF) has barely budged.

Some policymakers see this as a sign of “success.” At least that was the word Robert Doar, the commissioner of New York City’s Human Resources Administration, used on Wednesday at this New York University event. Between December 2007 and December 2009, as the number of unemployed people in the state of New York increased by 91%, TANF cases increased by just 4%. Doar is proud of this.

Now, if we’d somehow solved the problem of poor children—the people for whom cash assistance is ultimately intended—then I might agree. But that’s hardly the case. According to the Census Bureau, in 2010, 22.0% of Americans under the age of 18 lived in poverty. In New York City, the figure is 30%.

That works against Doar’s hypothesis that one of the reasons TANF cases haven’t risen is that would-be recipients are getting along by tapping other social welfare programs, such as unemployment insurance. It also illustrates a major misconception about unemployment insurance, which only half of all unemployed workers get, and those coming from low-wage jobs—like the ones cash assistance recipients tend to move into—typically don’t.

A more likely explanation is that eligible people aren’t joining the program. In fact, that’s what the data shows, both in New York and nationally. Before PRWORA, more than 80% of eligible families participated. Today, about 40% do.  In many states, benefits have become much stingier, which might help account for the decreased interest—except that the same drop is also seen in states like New York, where the dollar-value of benefits has remained essentially the same since 1996.

What has changed considerably is the process for applying for cash assistance. As policy analyst and TANF expert Bich Ha Pham detailed at the NYU event, an applicant in New York City must now attend 45 days of a 9-to-5 job-search workshop before having an application considered. Aside from the fact that the best way to look for a job is probably not to sit in a room with a bunch of other unemployed people for a month-and-a-half, this structure completely ignores the chaotic reality of being a single mother in financial crisis. (As the Community Service Society has shown, it also ignores the needs of high-school drop-outs, who would probably get a lot more out of a GED program than resume advice.) Indeed, a large proportion of applicants wind up being “non-compliant” during this initial 45-day job search.

The point here is not to bash Doar or his agency.*** The point is to illustrate that we can’t really have a conversation about whether or not linking cash assistance to market-based employment is problematic in a time of high unemployment, because program structure itself is distorting the behavior of would-be cash assistance recipients.

Although, in a way, maybe that is an answer to the question.  As sociologist Kathryn Edin and social anthropologist Laura Lein illustrated in their 1997 book Making Ends Meet (and in this shorter paper), the problem never really was that cash assistance recipients didn’t want to work. Indeed, interviews with hundreds of women showed that, depending on the city, between a third and half were working, just not in the formal economy. (Other data show that many cash-assistance recipients face problems that make mainstream employment difficult—more than a quarter have work-limiting physical, mental, or emotional  problems, compared with less than 5% of the general population.)

So maybe what we’re learning—should we be able to put aside the overly simplified view of the “deserving” and “undeserving” poor—is that it’s time for another round of welfare reform. But this time what needs to be reformed is how the system goes about understanding the needs and limitations of single working mothers. As Edin and Lein documented, barriers to formal employment include not just balancing work schedules with lone parenting and the added costs of having a job outside of the home (such as day care), but also the realities of low-wage work. Those realities include income volatility, the lack of unemployment insurance should a job be lost, and the lack of benefits that middle-class parents often depend on—such as sick days and the ability to make phone calls from work to check on children.

At the NYU event, even political scientist and PRWORA booster Larry Mead agreed that there is a lot of room for improvement in how work requirements are implemented. Much low-wage work is high-turnover and dead-end. The system, he said, would be much better if it focused not just on job placement, but also on job retention and job progression.

In other words, on reality.

 

*We typically call this law “welfare reform,” although that’s a bit misleading, since it didn’t address other social welfare programs, such as disability and unemployment insurance, workers’ compensation, Medicare, food stamps, and disaster relief.

**This is a fantastic bit of historical turnabout, since, as Theda Skocpol documents in this book, cash assistance to single mothers originally required women to stay at home to raise their children and not work outside of the home.

***While Doar-bashing isn’t the point, it is tough to avoid, especially when he says things like he finds it “troubling” that an increasing number of food-stamp recipients are working. Troubling, that is, because it indicates people are bilking the system, not because it reflects fundamental breakdowns in the labor market such as the decoupling of productivity gains from wage growth and rampant underemployment.

5 comments

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The earned income tax credit which offers low wage earners a negitive federal income tax rate is a program which works wonderfully. To receive the few thousand dollars in benifits you need to earn money and file a return. It works if you only work half time at a moderate hourly rate like 20 hours a week or even if you work 50 hours a week at near minimum wage. Best of all the program requires near zero oversite. Even with budget cuts on the way we should find the funds to expand the EITC.

The shortcomming of the EITC is that the program can by definition only serve those who are well enough to earn income. People who are disabled or have mental illness such that they cannot work in any capacity can’t be helped by the EITC. These people need to be cared for by a mosaic of other social safetynet services like non-emergency room walk in clinics, SNAP, shelters, soup-kitchens, foodbanks, and more. For all these needs grants to NGO’s are BY FAR the best option. By levereging armys of vollenteers and private donations these non-profits multiply tax dollars several times over.

In almost no cases should the needy be given cash assistance which can be misspent on socially destructive behaviors like drugs, tobacco, alcohol, or even Doritos for that matter.

Posted by y2kurtus | Report as abusive

It would work better if we just gassed our poor and our sick and our elderly. Then we could get away with not increasing what we charge in “taxes” from them while they are still healthy and employed. That would leave more money to pay for Israeli gated community McMansions in the Occupied Territories!

Posted by txgadfly | Report as abusive

“Welfare Reform” in the form of TANF has been successful. However, various states such as California have diluted its intent allowing more and more exemptions from participation. In California CalWORKs (Its version of TANF) has become ineffective and it has more clients doing nothing each year.
Blame the economy if you like, but the fact is that unless TANF programs have the expectation that clients will find work, the program will just be much like before welfare reform, trapping families in poverty.

Posted by ric822 | Report as abusive

You write

“We typically call this law “welfare reform,” although that’s a bit misleading, since it didn’t address other social welfare programs, such as … food stamps,”

I will check (and not hide my error if I am wrong) but I think you have just demonstrated astoudning amazing utter ignorance. IIRC the forecast spending reductions do to the PRWORA were mostly due to cuts in food stamps not the transition AFDC to TANF. I also think that the actual spending reductions in the first few years were more than 100% due to food stamps cuts as making TANF a non-entitlement actually meant that the TANF budget didn’t fall as the economy boomed.

I will now check.

First Wikipedia

http://en.wikipedia.org/wiki/PRWORA

” the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), … , the act gave state governments more autonomy over welfare delivery, while also reducing the federal government’s responsibilities. It instituted the Temporary Assistance to Needy Families program, which placed time limits on welfare assistance and replaced the longstanding Aid to Families with Dependent Children program. Other changes to the welfare system included stricter conditions for food stamps eligibility, reductions in immigrant welfare assistance, and recipient work requirements.[12]”

I admit that without the text of the bill I still haven’t proven that the changes to food stamps were part of the PRWORA contradicting your simple claim on a matter of fact in the public record. I am sure this is true, because I read newspapers in 1996 (what did you do) ?

I think you went out of your way to make a incorrect assertion of fact as an aside. I think that you should check the facts, and, if I am right, post a correction.

But I also suggest you ask yourself why you did such a thing ? I am quite sure that you made a claim about the text of a 15 year old law without checking it. The claim was not important to your post. Why would anyone do such a thing ?

Posted by robertwaldmann | Report as abusive

In some states, such as Colorado, you are expected to enter “workfare” the moment any person living in your residence applies for SNAP (not cash assistance). I learned this lesson the hard way when a member of my household applied for food stamps.

I learned that the county demands that anyone in the household who is not employed 30+ hours a week at a traditional job attend an orientation in which they spend their time working for the county social work office (to earn “your” food stamps) whether or not they personally receive or qualify for benefits.

I went to an orientation with the promise of help finding a traditional job and it was an eye-opening experience. I spent those hours “volunteering” for the county (collating papers) to earn benefits that I never received. I demanded that the person living under my roof rescind the application as I couldn’t afford to comply with the county’s request.

I can’t see how it is legal to force someone to work for the government, for free, especially if he or she does not qualify for the program.

This has only led me to question the wisdom of our government.

How in the world does workfare help the poorest of the poor? People need money to get daycare and transportation. These resources are not supplied.

The cost to taxpayers to monitor food stamp recipients people must be insane.

Worse, I can only imagine that replacing government and quasi-governmental employees with unpaid workfare workers is driving down wages for the rest of us.

Maybe it’s time to overhaul welfare entirely or, at least, make it easier for people to start private charities. Private charities are the only way we will be able to help those who truly need it.

Something has got to change.

Posted by TisSheilah | Report as abusive