Welfare-to-Work: Where Are Families Now?

[Nika2013]

THE PERSONAL RESPONSIBILITY AND WORK RECONCILIATION ACT



This is an essay written in 2006 about Bill Clinton’s Welfare-to-Work initiative. This author received a personal letter from Mr. Clinton detailing his plan and the direction in which he wanted to take it. The hidden repercussions of this work initiative shall be discussed, as well as the fall of families into deeper poverty.

THE PERSONAL RESPONSIBILITY AND WORK RECONCILIATION ACT

Each budgetary decision is based upon a set of priorities favored by the party in power and the president, as executive sets the budgetary agenda. In 1996, William Jefferson Clinton signed , The Personal Responsibility and Work Reconciliation Act with the intent that it would remove many people from the welfare rolls, freeing money for other uses and demanding responsibility through employment. He did this by returning power to the states to design their own family assistance programs, placing a five-year limit upon families receiving cash assistance. In May of 1999, the US Department of Health and Human Services released guidelines on states' use of block grants in moving individuals to work. (NARA 2007)

This paper will be divided into sections, each of which deals with the problems and effects of programs that place recipients in employment positions. It will show the effects (upon the economy) when an infusion of women enter new jobs at a rapid pace, creating imbalances in the demographics of workers and changing business cycles. In addition, there are human costs to families that rely upon one sole parent for supervision and financial and emotional support.

WHAT HAVE WE LEARNED?

What have we learned from this experiment derived from budget prioritization? Robert Scheer , writing in The Nation in 2006, stated that Bill Clinton seemed to be taking credit for Johnson's War on Poverty; stating that he won the war. "The ex-president gloats over the large decrease in the number of welfare recipients as if he is unaware of the five-year limit and other restrictions that made it inevitable. Nor does he seem bothered that nobody seems to have thought it important to assess how families on Aid To Dependent Children (AFDC) fared after they left welfare. The best estimates from the census bureau and other data, however, indicate that at least a million former welfare recipients have neither jobs nor benefits and have sunk deeper into poverty." (Scheer 2006 p.2) The Joyce foundation has invested 9.4 million dollars in following former welfare recipients in the Mid-West Region. It states that the most spectacular decline in welfare cases has been in the State of Illinois where the caseload is only 17% of 208,646 on the rolls in 1994. The Joyce study states that most people who left welfare went to work with 79% employment in 1999, but declining to 59.5% by 2003.

to be continued later .....

 

[Agit8r]

There is also the matter of workers who would make at least minimum wage being displaced, or, if working side-by-side, having to constantly pick up the slack. been there, done that

 

[Nika2013]

Absolutely! and it is the same for the influx of illegal and legal immigrants...If America has lost over 2 million jobs since 2008, it has allowed legal immigration of more than one million people per year (if memory serves me well and I will check) meaning that we allowed 5 million+ into the country after we lost 2 million jobs initially. Recession? Why would we think otherwise?

 

[C_Clayton_Jones]

What have we learned from this experiment derived from budget prioritization? Robert Scheer , writing in The Nation in 2006, stated that Bill Clinton seemed to be taking credit for Johnson's War on Poverty; stating that he won the war. "The ex-president gloats over the large decrease in the number of welfare recipients as if he is unaware of the five-year limit and other restrictions that made it inevitable. Nor does he seem bothered that nobody seems to have thought it important to assess how families on Aid To Dependent Children (AFDC) fared after they left welfare. The best estimates from the census bureau and other data, however, indicate that at least a million former welfare recipients have neither jobs nor benefits and have sunk deeper into poverty." (Scheer 2006 p.2) The Joyce foundation has invested 9.4 million dollars in following former welfare recipients in the Mid-West Region. It states that the most spectacular decline in welfare cases has been in the State of Illinois where the caseload is only 17% of 208,646 on the rolls in 1994. The Joyce study states that most people who left welfare went to work with 79% employment in 1999, but declining to 59.5% by 2003.

Having been a state employee in 1996 responsible for implementing the Welfare Reform Act of that year, my colleagues and I were struck by the fact that the Act had no provisions for funding education and training programs. Such programs would allow Cash recipients to receive meaningful training so they could find long-term employment, get and stay off of Cash, and become self-sufficient.

Needless to say this was political, as affording welfare recipients education and training would have resulted in the welfare rolls decreasing at a much slower rate.

True, the Act did compel many who had no business being on Cash to exit the program, but it left behind a hard-core of Cash recipients who were clearly not work ready, incapable of finding work, and continue to receive Cash to this day.

Had a more comprehensive program been implemented offering employment and training rather than the punitive approach adopted, Cash wouldn’t have become the pointless revolving door it is now.

 

[Nika2013]

Continuing the essay on welfare-to-work:

FORMER RECIPIENTS STILL FACE POVERTY
The Joyce Foundation states that the biggest problem for former recipients is that they remain in poverty, even while working, and that caseloads for food stamps and Medicaid rose, while Temporary Assistance to Needy Families (TANF cash payments) dropped. (Joyce 2006) Large-scale poverty reduction was never a goal of the Welfare-to-Work program, and as such is very different than the ideals advocated by Lyndon Johnson in the War on Poverty.

Time Almanac, 2006, reveals that poverty rates rose considerably in the Mid-West and South for the reporting year. As children have a poverty rate of at least one in four, we may assume that many fall within these regional categories. In some regions of the Mid-West and South, the rates are much higher: the South-Central Missouri region had poverty rates of 25%-45% in some areas before adults were removed from the rolls. Further study must take place to ascertain the effectiveness of employment programs in these regional areas. If jobs are not available for families who leave the rolls, then programs are more harmful than helpful. In the Joyce Milwaukee Study, only 30.9% of former recipients were employed by 2003. Joyce, states, “As the law intended, large numbers of people have moved from welfare to work, and countless others who might have applied for assistance have tried to find jobs, or are relying upon family and friends. Relying upon family and friends places a burden upon these relationships. How many families have become homeless due to the policies of government?

THE ECONOMY AND WELFARE-TO-WORK PROGRAMS
In employing large numbers of people on welfare the government assisted businesses in efforts to find low-wage workers. William Rohlf, writing in An Introduction to Economic Reasoning reveals that in 1997 (shortly before Clinton’s plan reached its peak effort) the gap between pay for high school and college graduates narrowed significantly and the former saw their prospects expand with the economy. (p.92) This was due to a limited supply of low-skilled workers whose peers were attending college in greater numbers.

Enter, Clinton and his effort to employ mothers on welfare. Although the economy grew throughout the Clinton years, it began to constrict after George Bush took office. The former expansion may have been due to the immediate influx of low-skilled welfare mothers boosting the GDP, initially, but depressing wages over time.

To be continued…..

 

[Nika2013]

"my colleagues and I were struck by the fact that the Act had no provisions for funding education and training programs. Such programs would allow Cash recipients to receive meaningful training so they could find long-term employment" (he stated)

It is my belief that these types of government programs were never meant to raise the quality of life for families, but to provide minimum wage employees for businesses. An example that I can give: A California program for young mothers within a certain income group (not a welfare program) that promised to raise families from poverty, also promised free housing, educational training including college-level training, childcare and other services. As a young, single mother with two small children, I enrolled. I spent a week taking batteries of tests, computational, written and block tests. I received a print-out from the state with my possible job training categories:
1. Tax attorney
2. Military Commander
3. Veteran's Benefit Counselor
and 40+ more jobs requiring 4-7 years of education. I did not ever hear from the agency again...
So, what transpired was that the agency received administrative funding for providing nothing...

I forgot to state that with the list of jobs for which I was qualified was a letter that said, "Your test results reveal that you can succeed in any field that you choose. " So..I took their advice and enrolled in law school while working half day at a private school. The responsibility of raising two kids while working and going to school was overwhelming. I had to quit law school to go back to work full-time. For people who would denigrate people who seek assistance, walk in their shoes, before attacking. Most, are young mothers with few options, other than to leave their kids who usually only have one parent, as it is. I think that my state is now allowing mothers to stay home with young children.

Thank you for your very informative and interesting post!

 

[Nika2013]

Continuing the essay:
The influx of new employees under the Welfare-to-Work program displaced high school graduates by flooding the market with minimum wage workers. Many studies show that former workers in the Welfare-to-Work program no longer have jobs. If jobs did not grow in number to replace jobs required for those leaving welfare, this may be the problem for the economy and for low-wage workers, in general. (2006) Penner (2002) states, “Because it takes time to gather evidence of fundamental change, forecasting techniques and assumptions are likely to change more slowly than reality, and that lag may be the most important reason that errors persist for so long.” (p.11) Short-term views of economic expansions that incorporate huge numbers of workers may display this type of problem. Morrison (2002) states that although the business environment is aware of cycles and trends, business may not understand the effect of altering the economy in this manner. Rohlf ( p. 17) states, “The goal of achieving full employment may conflict with the goal of maintaining a stable price level. Attempting to reduce unemployment usually results in a higher rate of inflation. Accepting some unemployment ensures a lower inflation rate. (id) Within a depressed economy, former recipients may live without jobs, or assistance.
Understanding these variables may help policymakers create better programs. The following chart from Rohlf (1999) presents trends in income distribution and inequality showing the percent of aggregate income each fifth of households within the United States received:
1976 1986 1996
Lowest Fifth 4.4% 3.9% 3.7%
Second Fifth 10.4% 9.7% 9.0%
Third Fifth 17.1% 16.2% 15.1%
Fourth Fifth 28.8% 24.5% 23.3%
Highest Fifth 43.3% 45.7% 49.0%
(US Census Chart 1997)

For all but the highest fifth, real share has reduced over time and this is why you, or your parents remember the 1970s as being more prosperous; because they were. The lowest fifth, the people who could least afford a reduction have dropped to 3.7%. The figures are the percent of “aggregate income” for each group.

The highest reduction was actually in the fourth fifth signaling an impediment to upward mobility. The disparity must be much greater under the Bush Administration. The demoralizing effect of income inequality can lead to social unrest. (id p.17) The chart should be important to all people below the highest fifth as it reflects losses in real income over a twenty year period (1976-1996) With this in mind, we should refute statements of parasitism by the poor and focus upon the highest fifth who are taking a disproportionate share of the nation’s wealth.

The current percentages will be posted soon, as well as sources cited.

 

[Nika2013]

I am trying to post the letter from Bill Clinton, but the message board says that the file is too large (???) It is a copy of a Word document from an original scan of the letter...

 

[Nika2013]

Consumer Price Index
The consumer price index (CPI) is used as an indicator of price changes in the goods and services purchased by US consumers and each annual CPI is compared to the average index level of 100 which is a base number that represents the average price level for the 36 month period covering the years 1982, 1983 and 1984. A minus sign equals a decrease. (Times Almanac 2013)

Here are the numbers for selected years:
1963 30.6 annual change 1.3
1970 38.8 annual change 5.7
1980 82.4 annual change 13.5 * see below
1990 130.7 annual change 5.4
2000 172.2 annual change 3.4
2010 218.1 annual change 1.6

Compare this with federal minimum wage for those years:
1960 1.00 (7.66 in 2012 dollars)
1970 1.60 ( 9.35 in 2012 dollars)
1980 3.10 (8.53 in 2012 dollars)
1982 3.35 (7.87 in 2012 dollars)
1986 3.35 (6.93 in 2012 dollars)
1990 3.80 (6.59 in 2012 dollars)
1997 5.15 (7.27 in 2012 dollars)
2000 5.15 (6.78 in 2012 dollars)
2011 7.25 (7.31 in 2012 dollars)
2012 7.25 (7.25 in 2012 dollars)

What interesting facts become apparent in this chart?

First, obviously people were wealthier in terms of what they could buy in 1960 and especially in 1970 when minimum wage was actually $9.35 (in today’s dollars) By 1986, real wages began dropping in 2012 dollars and by 2011, the wage of $7.25 =$7.31 in 2012 dollars. Something happened between 1982-1986 that caused real wages (buying power) to drop. This may have been the movement to move jobs offshore or something associated with Reaganomics, for in 1980, the Consumer Price Index shows a jump of 13.5 .

The purpose of these two charts is to show how they affect the lower two fifths in the percent of aggregate income chart posted earlier. We can state that if there was a change of 13.5 points in the CPI in 1980, the lower two fifths were paying a much higher percentage of income for these products than any of the other groups and this further depressed their well-being and ability to cope financially.

 

[Nika2013]

In 1986, while costs of food and other products were increasing, the real income of the bottom two fifths decreased and this would create deeper poverty and homelessness.

 

[CaGOPatriot]

Welfare leeches are just like the long term unemployed they don't want to work they are all liberals who just want to live off the hard working conservatives. If we stop giving them money they will be forced to go out and find a job.

 

[Nika2013]

Whatever...dude...read my post /response to your thread...

 

[Nika2013]

You are most likely one of those people who complains about your taxes going to other people when you really do not pay any, but receive a refund of all that you paid in...I hear it every day...Trust me ..I live in a whole town of Craigs....

 

[CaGOPatriot]

Republicans never collect welfare. You claims are just another liberal lie.

 

[Nika2013]

Stop trolling my page dude...You have no information to offer except name-calling and its illegal according to CT's message..I am fine with intelligent responses to my essays, but it seems that your ilk cannot debate...just call names.. and BTW if you had actually read my posts you would have seen that I was not defending Democrats and actually stated that Clinton's movement of women to the workforce may have caused both the economic recovery and the depression of the economy moving into the Bush years...
But then...you did not read the posts.. you just wanted to attack me for actually doing the research...You can hate people all you want, but it will most likely cause high blood pressure, or a heart attack in the long run...You people are so angry that you lost the election...and guess what? You will lose the next one, too...because the Republicans need the very people that you hate...to win! Have a nice day....Peace....

 

[auditor0007]

Welfare leeches are just like the long term unemployed they don't want to work they are all liberals who just want to live off the hard working conservatives. If we stop giving them money they will be forced to go out and find a job.

Of course they'll be able to find a job. We have a job surplus right now; employers can't find enough employees.

 

[Nika2013]

Craig...I read the thread in which you were asking others to stop using profanity and act like Christians, as God would not like it....I thought about it..and I do not think that the God of which you speak would be very proud of many of us, tonight...I cannot understand why this country is so divided that people hate each other for ideas and beliefs. Somewhere down the line we seem to have divided into two very different species...I came to this board with an open heart and somewhere among all of the attacks and postings my vision changed and my responses became angry. If we truly believe in the constitution and freedom of speech, we should be kind enough to allow the founding document to guide us. The truth that makes this country great...the truth that has always been with us...is the idea of tolerance for the views of others, even though not everyone has accepted the idea...it still remains a vision. Can we agree as citizens of the same nation to allow freedom of expression, without attack? Can we re-frame our comments in a way that is not offensive to others? I realize that my words upset you...but I have spent many years defining the concepts in which I believe..I am not going to change my views and obviously neither are you...If we continue to let politics divide us...we are only destroying ourselves for "a nation divided cannot stand" at least for very long...Continuing on the path that we are on...will be our demise. I apologize for attacking you in response to your post...

 

[CaGOPatriot]

Craig...I read the thread in which you were asking others to stop using profanity and act like Christians, as God would not like it....I thought about it..and I do not think that the God of which you speak would be very proud of many of us, tonight...I cannot understand why this country is so divided that people hate each other for ideas and beliefs. Somewhere down the line we seem to have divided into two very different species...I came to this board with an open heart and somewhere among all of the attacks and postings my vision changed and my responses became angry. If we truly believe in the constitution and freedom of speech, we should be kind enough to allow the founding document to guide us. The truth that makes this country great...the truth that has always been with us...is the idea of tolerance for the views of others, even though not everyone has accepted the idea...it still remains a vision. Can we agree as citizens of the same nation to allow freedom of expression, without attack? Can we re-frame our comments in a way that is not offensive to others? I realize that my words upset you...but I have spent many years defining the concepts in which I believe..I am not going to change my views and obviously neither are you...If we continue to let politics divide us...we are only destroying ourselves for "a nation divided cannot stand" at least for very long...Continuing on the path that we are on...will be our demise. I apologize for attacking you in response to your post...

I agree the country can not continue on this path but it is conservatism that will save us not Obama's socialism.

 

[Nika2013]

That is your belief and I respect it...I voted for Obama the first time around and I actually campaigned for him in our conservative area....I lost my faith when he continued the policies of Bush in restricting the people's right to access the courts in claims of government intrusion into areas of privacy such as wire-taps of cell-phones and computer entry. I know that these things are happening because it has happened to me. I sent an Amicus brief to the Electronic Frontier Foundation in its representation in Jewel v NSA. I do not know if they used it in court.

Neither party has all of the answers...I think that many of the divisions that we see among our people have been purposely instigated to divide us...When I listen to Fox Radio, it is apparent...from both the conservative and liberal talk show hosts. Maybe ...if we remain divided we will not see (or blame leaders for) what is really happening at a higher level; the draining of wealth from America.

 

[Nika2013]

References Cited for Entire Paper (Only one-half posted here)
Berner, Maureen. A Race to the Bottom? Exploring County Spending Shortfalls Under Welfare Reform in North Carolina. Public Budgeting and Finance. Winter 2005
Branham, Lynn. The Law and Policy of Sentencing and Corrections. (2005)
Clinton, William Jefferson. Personal letter. Sept. (1997)
Joyce Foundation Newsletter. Welfare Reform Ten Years Later. Sept. (2006)
www.joycefdn.org/articles/employarticles/2006-09welfare.html
Leavitt, Steven D. and Stephen Dubner. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. Harper-Collins. NY
NARA. A Nation Transformed. http://clinton3.nara.gov/WH/accomplishments/welfare.html
Rohlfe, William D. Introduction to Economic Reasoning. Addison Wesley. Reading, Massachusetts
Scheer, Robert. Clinton’s Blindness on Welfare Reform. The Nation (2006)
Time Almanac (2006)
United States Census of 1997. Current Population Reports: Money, Income in the United States, 1996.
US Government Printing Office, Washington DC
Wildavsky, Aaron. Political Implications of Budgetary Reform.