Wednesday, August 02, 2006

Welfare Reform: Conservatives Were Right, Liberals Were Wrong

From USA Today, an account of the results of welfare reform, a movement from the 1990s that revolutionized public assistance in America.

This, of course, is journalism, and not heavy-duty policy wonk stuff, but it does a good job of telling the story.
When Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act, conservatives celebrated and liberals screamed; three administration officials quit their jobs in protest. The act ended a 60-year-old federal guarantee of cash aid for the poor.

The law, modeled on state pilot programs begun in 1994 with federal approval, was intended to prod welfare mothers and fathers into the workplace with a series of carrots and sticks. Work, and you got help with child care, job training, transportation. Refuse, and you risked sanctions and being cut off by time limits.

A decade later, the worst fears of liberals haven’t materialized. States did not enter what critics feared would be a money-saving “race to the bottom.” Thousands of poor children did not wind up “sleeping on grates,” as Democratic senator Daniel Patrick Moynihan predicted.

Major employers hired thousands of welfare recipients. UPS hired 52,000; CVS/pharmacy hired 45,000, 60% of whom remain. Welfare offices have shed the look and language of their first 60 years for the aura of job-services agencies.

Nearly 70% of all single women are working, compared with 66% of married women, a reversal of the past. Single women’s incomes have risen, thanks in part to the expansion of the earned income tax credit, a tax break of up to $4,400 for low-income workers. Child poverty rates have dropped, particularly among blacks and Hispanics. Teen pregnancies are down. Child support collections are up.

“Everything has worked,” says conservative Douglas Besharov of the American Enterprise Institute. “Every critique one might have is about what could have gone better, not something that has gone poorly.”
The number of families on welfare has declined from 4,408,508 in August, 1996 to 1,870,039 in December, 2005. In spite of this drop, the poverty rate has declined and is now below the level of 1996, when national legislation was passed.

Of course, not everybody on welfare has left to take a high paying job. A lot of the former recipients are in low-paying jobs -- although most Americans would say that it’s better to work than just to collect money from the government.

And programs like the Earned Income Tax Credit, Food Stamps, Medicaid and (in Wisconsin) Badger Care supplement the low wages of the working poor. The minimum wage is, in fact, a “living wage” if one takes into account all these programs.

A sidebar article sums up the situation:
USA TODAY interviewed women nearly a decade ago as they moved from welfare to work. In the years since, many have landed jobs, lost them and found others.
They have left welfare for good — some voluntarily, others because of sanctions or time limits.

Their incomes have not risen as much as they had hoped.

Nevertheless, they agree the change has been good in this respect: They are proud of themselves, and their children have role models.
The clock has hardly been turned back to the days before the Great Society. The system remains extraordinarily expensive, and the damage to the social fabric (especially in the inner city) has not been repaired.

But the system now encourages work and self-sufficiency, and not indolence and dependency. The nation has backed away from the excesses of the Great Society, and implemented a system more in tune with American values.


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