Who Pays For Poverty?

Mark Engler, a writer based in New York City, is a commentator for Foreign Policy in Focus and for the Global Beat Syndicate.

The success of welfare reform is a faith-based proposition in Washington, D.C. This month, as lawmakers debate the reauthorization of welfare legislation, the conservatives on Capitol Hill will offer their regular sermon on the virtues of "personal responsibility," ignoring the steady hemorrhage of jobs from the economy. And since welfare reform was a major legislative focus of President Clinton's "New Democrats," the other side of the aisle is unlikely to question the underlying belief that "ending welfare as we knew it" represented a triumph in social policy.

Out in the real world, however, the jobless recovery and enfeebled social protections are increasingly set on a collision course. Local legislators must confront an ugly truth about their "reformed" welfare systems: If critics charged that cutting welfare rolls had harmful impacts during the prosperous 1990s, the true extent of the damage is only emerging in the wake of the Bush recession.

"Yeah, there are lots of jobs available," went a joke about the workforce in the Clinton era: "I've got three of them." Since then, real wages haven't improved noticeably and extra work is harder to come by. Nonfarm payroll employment has dropped steadily since November 2001, shedding 579,000 jobs so far this year.

Clinton's 1996 welfare reform replaced the cash entitlement-based Aid for Families with Dependent Children with the new Temporary Aid to Needy Families (TANF). Research suggests that in the context of the faltering economy, people who might have once received AFDC are far more likely to find entrenched poverty than living-wage work. Single mothers are in truly desperate straits, according to a new report released by the Children's Defense Fund. "The number of jobless women with children not receiving welfare rose by 188,000 in one year, leaving a record three quarters of all single mothers without public assistance and causing a sudden surge in extreme child poverty," the report states. "Single parents entered the 2001 recession with less protection from a failing economy than in any recession in the last 20 years."

The details of this debacle get complicated. Under TANF, individual states receive block grants that allow them to customize their welfare systems. (As the late social theorist Teresa Brennan put it, there are now "50 Ways to Leave Your Welfare Benefits.") But Wisconsin's flagship W-2 program provides a revealing example. The program, which helped former Governor Tommy Thompson land a job as Bush's Secretary of Health and Human Services, is generally lauded as a success for cutting the number of families receiving cash assistance in half. The real results have been mixed at best.

A largely unnoticed AP story in May showed that W-2 was considerably more expensive for Wisconsin than the old welfare program. Although the state served fewer people, the welfare system cost $276.9 million more in the most recent budget period than during the last year of AFDC.

So what ever happened to "the end of big government"? Wisconsin realized that if you're going to force mothers to enter the job market rather than stay home to take care of their kids, you have to make provisions for child care. Under TANF in Wisconsin, the demand for child care has grown by 160 percent. (Ironically, many women entering the low-wage workforce end up stuck in jobs taking care of other peoples' kids, which, at hourly pay rates that make McDonald's look generous, isn't lifting anyone up by their boot straps.) Nor does job training come cheap. As Tommy Thompson himself has noted, if you want to create a "welfare-to-work" program that amounts to more than rhetoric, you have to be willing to pay for it.

Even with the extra expenditures, Thompson's brainchild is nothing to cheer about. Food pantries, emergency homeless shelters, and charitable hospitals all saw demand for their services shoot skyward between 1997 and 2000, according to groups like the Interfaith Conference of Greater Milwaukee, the Center for Economic Development at the University of Wisconsin-Milwaukee, and the Institute for Wisconsin's Future. In the same period, forcible evictions in Milwaukee increased by more than 200 percent. And when the state's Department of Workforce Development surveyed former AFDC recipients, they found 68 percent of those who had "successfully" found work said they were "just barely getting by day to day."

So much for the boom years of the Clinton administration.

The real problem is that most states are not even doing as well as Wisconsin, having failed to make the same investments. Instead of receiving cash assistance, many families are simply getting no help at all. In fact, the percentage of eligible families who actually receive welfare benefits plunged from 84 percent in 1995 to 52 percent in 1999, according to the NOW Legal Defense and Education Fund.

Michael New at the Cato Institute writes that "states with the strongest sanctions and the lowest benefit levels had the most success in reducing their caseloads." He's right. But slashing welfare rolls and reducing poverty are not the same thing. The current system is all too ready to reward states for the former.

Welfare reform in practice means that in tough economic times -- the very times welfare is needed most -- the government has little to offer the poor and the jobless. Those wealthy enough to walk away with one of President Bush's huge tax cuts aren't complaining. Nor are corporations who can hire from an expanding pool of low-wage workers. But the rest of us, who find our jobs ever less secure and our community resources strained, are left to pay for poverty.