The University Record, October 9, 2000

Blank: Jobs not the only element necessary to eliminate poverty

By Bernie DeGroat
News and Information Services

As Congress prepares to decide next year whether to reauthorize the welfare reform law passed in 1996, U-M welfare policy expert Rebecca Blank believes that the strong economy of the past four years provides little indication of the future success of existing state-based welfare programs.

“We have been in an absolutely unreal economy, and quite honestly, we just don’t know how any of these programs are going to work in a more normal economic environment,” says Blank, dean of the Gerald R. Ford School of Public Policy. “The last four years have been extremely unusual and, therefore, it’s very hard to draw lessons from them about the substantive effects of programs.

“At this point, things look remarkably successful, but don’t be fooled by that. It’s been a very, very unusual time. We really want to wait until we go through a full economic cycle until we can evaluate these programs.”

Speaking as part of an expert panel on “Welfare Reform Reauthorization 2001: What Have We Learned from the Past Four Years?” Blank told a Michigan Union audience Sept. 7 that the elements of many of the state welfare programs may look like “tough love” in the current strong economy, but in a much weaker economy, will look like “very harsh and counter-productive measures.”

Blank said that while fewer Americans are now on welfare since the passage of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act—which through the Temporary Assistance to Needy Families block grant gave states greater flexibility and responsibility to design and implement welfare-to-work programs—simply getting people jobs will not solve the problem of poverty.

“We have amazingly increased work behavior among single mothers with children, but the increase is not matched by an equal decline in poverty,” she said. “Poverty has ticked down a little bit over the last three or four years, and that’s good, but we’ve been in a marvelous economic expansion and you might have expected much more.”

On the other hand, Lawrence Mead, professor of politics at New York University, believes that the leading lesson learned from the last four years of welfare reform is that work is possible for the bulk of those Americans on welfare—even for many more than previously thought.

In fact, Mead said, while the booming economy has played a role in getting Americans to leave the welfare rolls, it accounts for only about one-third of those former recipients now working, while tougher welfare-to-work requirements account for half of the current workers who were previously on welfare.

“The economy has been a factor, but I think we might well have done much of this in the ‘80s had we been willing to do it,” Mead said. “There have been previous times when we had tight labor markets but we had nothing like this. Clearly something else is happening. I think it’s an interaction, maybe, of work enforcement and good economic conditions.”

He also said that the consequences of welfare reform have been quite favorable, with a decline in welfare caseloads and a rise in work levels. For example, working single heads of household increased from 43 percent in 1993 to 57 percent in 1998, according to Mead.

“I think the most critical thing we’ve done was actually to enforce work,” he said. “That was the thing that was contentious and difficult, where there was division. Now we have done that. We have broken the mold and ushered ourselves into a new world, where a positive outcome is possible.”

Mead added that employment for welfare recipients is critically important because it not only improves their financial well-being, but also changes the “politics” of the issue in a way that the American public is willing to be supportive.

“The public is not unwilling to help the poor, but in contrast, they want to see them helping themselves,” he said. “This is the key. It’s exactly the people who are helping themselves who have the greatest claim to public help, as well. Now that we see higher work levels, we are seeing, in fact, the willingness by government to help people on a scale we haven’t seen before.”

Sheldon Danziger, professor of social work and of public policy, agrees that more people are working today thanks to welfare reform and the strong economy, but he believes that a great many welfare recipients still face significant barriers to employment.

According to his research, Danziger said that even during the recent and present robust economic times, there appears to be a limit on the amount of work done by those on welfare, particularly single women.

“What is it about either the economy or the people that says even in the best economy, on average, 70 percent of welfare recipients are working?” asked Danziger, director of the Research and Training Program on Poverty, the Underclass, and Public Policy.

The answer, he said, may be that many of these recipients have serious personal problems, such as depression and other diagnostic disorders, physical health problems, alcohol and drug dependency, lack of work experience and job skills, and little education. In fact, the more barriers, the greater likelihood of not working.

“There are important structural barriers to work,” Danziger said. “Employers, more and more, want skilled workers, and there are many people who don’t have those skills. But there are many people, who even if they have the skills that employers want, still have these personal barriers that keep them from work.

“So we have to do two things. When the economy turns bad and in areas where unemployment rates are high, we have to provide work-for-your-welfare jobs of last resort if we’re going to expect people to work.”

In the end, regardless of the lessons we may have learned about welfare reform over the past four years, panelist Hanns Kuttner said that the most important variable in determining what happens with the reauthorization of the welfare reform law depends on the amount of funds allocated to states for welfare programs. Kuttner served as associate director of the Office of Policy Development at the White House during the Bush administration and completed his doctoral work at the University of Chicago in public policy studies.

“Sometimes you can make money by betting against the house, and that’s what the states have done over the last four years,” he said. “The house was a bunch of people trained in public policy schools working at the Congressional Budget Office who had to say ‘OK, what’s the future trend going to be for spending (for welfare)?’ and in 1996, the estimate turned out to be very optimistic. The states took that and cleaned up with the bet.”

Regardless of the amount of future funding provided by the federal government to the states for welfare programs, all of the panelists agreed that major changes in current welfare programs are unlikely.

“You need a forcing event to cause reauthorization to do something substantially different than what the bill has done in the past,” Blank said. “We really don’t have a forcing event right now. By virtually all measures, welfare reform has accomplished very much what it wanted to accomplish. Caseloads are down lower than anyone possibly could have expected. Work is higher than anyone possibly predicted. So therefore, the impetus for major reform on this bill just does not exist.”