The U.S. economy has worked wonders for the working poor in recent years. Companies desperate for help have pushed up wages for the lowest-skilled employees after decades of decline. Employers have even snapped up welfare mothers, often among the least employable, slashing the rolls in half, to some 2.5 million today. Taken together, it makes the 1996 welfare reform law, which limits the time families can remain on welfare, appear to be a smashing success. Democrats and Republicans alike point to the important accomplishment of having broken the cycle of dependency that welfare creates. "The drop in welfare caseloads has been one of the greatest public policy successes of the century," Arkansas Governor Mike Huckabee, a Republican, said on Aug. 22, the law's fourth anniversary.
But just how good is the record when it comes to life off the welfare rolls and on the payroll? Sadly, no national surveys track welfare mothers after they leave the dole. But a number of new studies by a handful of states, plus other evidence, suggests that welfare reform is more troubled than many policymakers realize. The recent data show that while millions of former welfare mothers have jobs, their incomes are often lower than before the reforms were enacted (table, page 104). Although spotty, a picture emerges of many former welfare mothers with lower incomes than they had before they got jobs. Even those experts who point to the more encouraging studies agree that a substantial number of former welfare moms are floundering. "There is a group of mothers at the bottom who are worse off as a result of welfare reform," writes Ron Haskins, a House GOP staffer who helped draft the 1996 law, in a forthcoming book.
This is troubling news. Reform was supposed to achieve self-sufficiency, sure--but not at the price of greater poverty. And it could get worse. Most of the mothers who have found jobs so far are those with more skills and less-troubled personal lives. Many of those remaining on the rolls have serious problems: physical disabilities, mental health issues, or abusive spouses. When these women eventually get pushed into the labor force, they're likely to have an even tougher time earning a living.
No one would have the country go back to the bad old days of demoralizing dependence on the dole. But if the nation is going to help welfare mothers make it in the work world, it's going to need more money and training programs. When Clinton originally proposed to end welfare as we know it, he wanted to spend an extra $5 billion, on top of the nearly $17 billion annual welfare tab, to help recipients make the leap. The money was to go for child care, transportation, health care, and job training--all keys to work success. Instead, Congress passed reform on the cheap. Clinton went along, agreeing to keep federal welfare spending at $17 billion a year. Worse, the states are sitting on some $8 billion in unused funds, left from the falling rolls.
The only way to make welfare reform truly successful is for Washington and the states to step in and provide the education and training welfare mothers need. Congress also needs to make sure recipients are getting the social benefits they're entitled to after their welfare checks are cut off. "Working families with below-poverty earnings aren't receiving the health care, food stamps, and other help they should get," says Deborah Weinstein, head of the family income program at the Children's Defense Fund, a Washington advocacy group.
As experts and agencies begin to piece together the record of the past four years of reform, it's becoming clear that, though many women cherish their newfound independence, they also find themselves struggling just to make do. Adjusted for inflation, the average annual income of the poorest 20% of single mothers--half of whom have been on welfare at some point--fell by 4%, to $8,410, between 1995 and 1998, the latest year available, according to a study of Census Bureau data by Wendell E. Primus, director of income security at the Center on Budget & Policy Priorities, a liberal Washington think tank.
That's because, while average welfare payments for this group fell by $802 a year over this time period, paychecks from work climbed by only $244 a year. (Many mothers go on and off welfare during the year, so their incomes include both welfare payments and wages.) Meanwhile, five states that tracked women post-welfare report that between 1996 and 1998 close to half had lower incomes after their welfare checks stopped.
HUNGRY. Even if they're doing better than the five states found, there's another set of worrisome data from the state level. The share of those who skip meals, miss rent payments, or can't pay for child or medical care has climbed for those leaving the rolls in South Carolina and Wisconsin, which conducted before-and-after studies. Indeed, at least two-thirds of former welfare recipients still depend on government assistance programs such as Medicaid or food stamps, according to a new study by the Cato Institute, a conservative think tank in Washington. "Clearly, welfare reform is failing to make people independent," says Lisa E. Oliphant, the report's author.
It's certainly the case for Karen and James Spitler, a Portland (Ore.) couple cut off from welfare in 1996. Karen can't work because of a herniated disk, but James found a service-department job at Goodyear Tire & Rubber Co. The $1,000 he takes home each month isn't enough to cover rent and medical needs, even though they buy health insurance through Goodyear. To make ends meet, the Spitlers, who have two children, go to a food bank once a week. "Jim and I eat one meal a day," says Karen, 41.
Beyond the state data, some experts are collecting anecdotal evidence from agencies such as food-assistance programs. The number of those getting food stamps has plunged by 33% since 1996, in tandem with the reduction of the welfare rolls. Yet last year--with the economy roaring by any other measure--visits to soup kitchens and food banks jumped by 18%, says the U.S. Conference of Mayors. That was the biggest rise since the last recession, in 1991. "If welfare reform is going to work, we have to make sure people can feed their families," says Deborah Leff, who heads America's Second Harvest, a hunger-relief organization.
Education and training are key ways to help those struggling to make it after welfare. While existing training programs hardly work miracles, studies show they can make a critical difference. Clarissa Vega, a 26-year-old single mother of three, just got a $10-an-hour job in customer service at the Pace Staffing Network, an employment-search outfit in Redmond, Wash. She says what got her hired was the training at a local community college she was required to take while on welfare in 1997. "I feel so proud of myself," Vega says.
Vega was one of the lucky ones. Plenty of others on welfare want training but can't get it because the programs are underfunded. Florence Shorter, 45, who cares for four grandchildren and a great-grandchild, got a $7.48-an-hour part-time job at a shelter that helps women move out of homelessness. A Washington resident, Shorter is set to go full-time and hopes to be off welfare completely by Thanksgiving. But "to be an independent woman and not [need welfare]," she says she needs training to qualify for a better paying job.
Some experts aren't yet convinced by all the new studies. GOP Haskins, for one, cites an unpublished Office of Management & Budget paper suggesting that most former welfare mothers do better in the work world. Still, even if he's right, making welfare work is likely to get even more difficult. Since those left on the rolls are more disadvantaged than those who have already made the leap, their incomes are sure to fall without a helping hand. With jobs plentiful and government coffers full, now is the ideal time to make sure that welfare reform lives up to its promise.