The Brave New World:
A Model for Welfare Reform

by Brandon Garrett

The first victim of Connecticut's latest welfare cuts is unem-ployed but defiant. When Governor John Rowland signed a bill providing for an eighteen-month cap on state welfare, the Welfare Director for the city of New Haven, Debra Shapiro, immediately resigned in protest. A local welfare director for 13 years, she joined the ranks of the jobless people she previously served rather than bear the responsibility for implementing cuts.

"Connecticut is winning handily the race to the bottom. The welfare reform agenda is stalled nationally, but Connecticut is jumping the gun with welfare repeal, not welfare reform. Since 1990 there have been attacks on welfare every year, every year. These changes have been working on me, and I did not feel that I could live with the new policies," Shapiro explains.

Connecticut is one of many states preparing to drastically reduce its welfare programs. Although Congress remains deadlocked over the specifics of welfare reform, a majority of congressmen and governors share a desire to replace welfare with a system of block grants to states. Even President Clinton's proposed 1997 budget includes a five-year time limit on welfare benefits. The National Governor's Council plan, the House and Senate welfare proposals, and the President's plan all share the same basic features including an inherent flaw.

Learning from Past Welfare Reform

Opponents of welfare maintain that no practical solution to welfare problems exists. "The welfare reform being proposed for states is a wholesale experiment; we have never tried anything on this scale. There are no studies that will tell you if "x," then "y." This is a brave new world," says Linda Wolf, Deputy Director of the American Public Welfare Association. However, studies describing the effects of welfare reform do exist and reformers can learn from the mistakes of the states that have initiated reform in the past five years.

The welfare reform saga begins in the Michigan rust belt. As the first state to attempt drastic welfare cuts, Michigan represents conservatives "shining" example of the revolution against the modern welfare state. In 1991, Michigan ended general assistance to 80,000 single adults, cutting $100 million from its annual budget. Michigan Governor John Engler is the leading advocate of state welfare reform and has won such respect for his reform measures that he may well receive the Republican vice-presidential nomination. Engler's "Social Contract" required that parents on welfare work or perform community service in order to receive benefits, and he claimed both that such measures would save money and reduce poverty by forcing families to work and also that the new workers would benefit the state economy.

Time proved Engler wrong on both counts. The RMichigan MiracleS was not result of EnglerUs policy but of a surprise turn around in the auto industry. While MichiganUs manufacturors prospered, the situation for those below the poverty line grew dramatically worse. According to Father Frederick Kammer, President of U.S. Catholic Charities, twenty thousand former Michigan welfare recipients were evicted and 27,000 went without food. In one famous example of 1991, Eva Frederick, a welfare recipient, died because she could not afford her blood pressure pills after she lost her benefits.1 While the poor suffered, the auto industry turnaround proved a political miracle for Engler, helping him win re-election.

In addition, a University of Michigan School of Social Work study has documented the connection between general assistance cuts and homelessness. The study shows that although Michigan doubled the number of shelter beds, the demand for beds remained excessive. The number of emergency shelters tripled, and Michigan researchers compared the conditions in these hastily constructed shelters to those in 18th century poorhouses. In a throwback to the Depression, a shanty town dubbed REnglervilleS grew in front of the state capitol building. Engler supporters counter with a simple statistic: 30 percent of welfare recipients are now employed in Michigan, the highest success rate in the country. However, this is an inaccurate measure of those people who actually found new jobs, says Howard Ralston, Director of Research for the Administration for Families with Dependent Children (AFDC). Michigan raised the minimum income requirement for welfare; most employed are new on the rolls and had their jobs prior to receiving their first welfare check.

Ironically, welfare cuts did not produce great savings in the Michigan budget, for shelter provision costs more than general assistance previously cost. Welfare reform in Michigan pushed the poor Rfrom general assistance benefits to emergency beds.S Federal aid helped those who lost aid in Michigan; forty percent of those who had received general assistance applied for Supplementary Security Income (SSI) benefits. If state and federal aid dries up, the homeless shelters will provide the only safety net.

In addition, state welfare cuts have hurt local economies. Some call such hidden negative effects the Rbowel movementS theory of welfare, suggesting the way that welfare money passes throughout poor communities, mostly through spending at local stores. This theory argues that welfare cuts create adversity in entire neighborhoods. According to Wolf, proponents of the "tough love message" view the increase in homelessness and poverty as "unfortunate fall-out," a mere side effect of a reform program that successfully encourages work.

Job Training Programs

If welfare reform aims to encourage work, job training remains an essential ingredient. Historically, though, job training programs have not been especially effective. The RMichigan MiracleS indicates that people cut off from general assistance encounter difficulty finding jobs. Engler's "Work First" program provided transportation, job training, and referral services to 40,000 people in Detroit who lost general assistance. 16,500 actually enrolled in the first training session, but fewer than half continued with the program. Of 5,040 placed into jobs, half actually had unreported jobs already.2 Only six percent of those who lost benefits actually received jobs through the "Work First" program.

Michigan has traditionally maintained a relatively low unemployment rate of five percent, but other states with more severe unemployment problems will find job training programs difficult to implement. Although Maryland created 5,690 jobs suited for poor, unskilled workers in 1994, it still reported 79,317 families on welfare. Former New Haven Welfare Director Shapiro adds that in many states, including Connecticut, no job placement program exists simply because no jobs are available. "There is no such thing as a full employment economy. There can't be. We must admit that basic economic problems make welfare necessary," she says. With no available employment, welfare cuts cannot encourage work, and families will survive only through effective job training and allocation programs. Most job training programs proposed by states do not dependably find jobs for those who lose welfare benefits.

Wolf describes two basic approaches to employment initiatives. "Work attachment" programs place welfare recipients in any available job, while "human development" programs emphasize education. Work attachment programs are far less expensive, since no education is involved. These simpler approaches have increased their appeal to states. In Connecticut, jobs have not been found but bought, by annual subsidization of 9,000 positions in local businessness. Since they provide no long-term employment, such programs are just a temporary band-aid for the misery that welfare cuts produce.

However, job training programs can be effective. AFDC's research Director Howard Ralston, a self-described advocate of job search programs, says, "Serious job search programs consistently prove successful. The notion that a state ought not pursue welfare reform because there are not enough jobs is a big mistake." Ralston does agree that work attachment or job searches are not enough alone. He advocates comprehensive programs in which job search is included with group assistance, basic education programs, and consultation with case workers. Communities like Riverside, California, the most successful job training site to date, demonstrate that a comprehensive approach can work. The Riverside program includes basic education programs, job searches, and encouragement of local businesses to hire program participants, and as a result, four percent more families escaped poverty through their treatment programs.3 Despite impressive achievements, however, few states will consider Riverside's comprehensive approach because of its expense and complexity.

Surprisingly, Governor Engler is one of the newest advocates of comprehensive job training. He addresses the importance of job training as a safety net and advocates a sweeping new job training program called Project Zero, in which case workers would visit the homes of every welfare recipient in Michigan.

State Flexibility and Block Grants

"I am afraid of state flexibility. The dollar value of AFDC benefits has declined teadily over the last 25 years. That is the average, but states have failed to keep up with inflation every year. You cannot say that Congress does not care as much as the states when the Governors have failed," says U.S. Catholic Charities President Father Kammer. Welfare reformers propose to make deep cuts in federal spending by giving states block grants, and therefore more flexibility to spend welfare funds as they please. Currently, the AFDC matches state-provided assistance, and states receive new federal funds as more families become needy. With the adoption of a block grant system, the federal government would give states a fixed amount of money each year to spend as they see fit. Because they would not be forced to spend the money given to them in a block grant, states would have more freedom to make cuts in welfare.

APWA Director Wolf says that Rthere is a major ethical question - to what degree is public policy about equality or equity? There are very different levels of benefits in different states - is that unfair? We are about to say no.S Benefits vary tremendously between states - much more than differences in the cost of living. Under the current entitlement system the average family on welfare in Mississippi receives a combined cash and food stamp benefit of $5,952 a year, while in California the average family receives $11,898 a year. Shapiro adds that state flexibility will create "50 different countries."

The block grants proposed by Republicans would represent the most drastic transformation of the welfare system since it was created as part of the New Deal. With block grants, federal aid to states would increase from 7 percent of state budgets to 24 percent. In the past, state cuts have been cushioned by federal welfare programs like food stamps and disability and unemployment benefits. Food stamp and SSI programs may now suffer similar cuts. If new families applied for welfare under block grants, states would no longer receive new funds. During a recession, for example, unemployment rises, and more people apply for welfare. Under a block grant system, states would have fixed benefit levels and could not distribute more money during a recession.

In many states, welfare reform also means additional bureaucracy. Connecticut and other state reforms include hiring employees solely to discover welfare cheats. Ironically, in the new Connecticut policy, welfare officers fingerprint all recipients and enter these records into a state database. No such database for criminals exists in Connecticut; so Connecticut now monitors its welfare recipients more systematically than its murderers.

If states focus on welfare reform, rather than welfare reduction, they can improve their policy within the current system. Undoubtedly, state discretion has proven valuable. Regulators monitor some minor items, such as family assets including automobiles and funeral plots, adding needless complications to the welfare system which states could adjust. Ralston approves state waivers and cites many beneficial changes from the current waiver system. Twenty-five states have limited welfare in conjunction with providing job training and opportunities. Thirty-three states have provided work incentives, and 28 states are expanding the Job Opportunities and Basic Skills (JOBS) training program.

Despite its apparent benefits, governors call the waiver process cumbersome. Ralston says the current waiver system consumes time only because it requires that states perform rigorous assessments of reform measures. If block grants aim to allow states to experiment and learn from each other, then evaluations submitted to AFDC remain essential. Evidently, states that object to the current waiver process would rather make cuts than learn the best approach to reform from the example of others.

Rather than continually reducing the size and effectiveness of the welfare system, state lawmakers could use the current waiver process to institute integrated programs. Effective state programs provide child care, money for transportation to work, job training, and counseling for addictions and abuse. Indeed, charities, federal researchers, and private think tanks agree that one can and should attack the cycle of poverty with the full arsenal of a comprehensive approach.

Father Kammer provides his own viewpoint as the head of an organization that runs 200 shelters across the country. He asks "Should we have so many shelters and soup kitchens in this country? Shelters are celebrating their 10th and 15th anniversaries; they are becoming a permanent part of American Society." Politicians now seek the quick fix of dismantling the welfare system, which, in the long run, will increase homelessness, poverty, and dependence. America has refused to attack welfare through a comprehensive approach, and each passing year establishes a greater dependency on shelters and welfare.

Those who would dismantle the welfare system caution that predicting the effects of welfare cuts is impossible. Wolf says, "It is a brave new world" with no clear-cut solutions to combat poverty. However past welfare reforms have cut off poor families without adequate employment opportunities or training. The state flexibility and reform advocated by Governors and Congressmen will only hurt AmericaUs poorest families and neighborhoods unless comprehensive job training programs are initiated. Meanwhile, former New Haven Welfare Director Shapiro, like many of her former clients, will try to find work and to be brave, like so many of her former clients. For policymakers and poor homemakers, it is a brave new world. YJE

Endnotes: 1Walsh, Edard, Less Than A Michigan Miracle, Washington Post Weekly Edition, Jan. 1, 1996, p. 32 2Edsall, Thomas B. The Weak Link in the GOP Train of Thought. Washington Post Weekly Edition, Feb. 4, 1996, p.23 3Kathy Park, M.S.W., Sandra Danzinger, Ph.D., Sharon Parrpt, M.S.W., From General Assistance Benefits to Emergency Beds: DetroitUs Shelter System Response to State Budget Cuts, January 1995. The University of Michigan School of Social Work. 4Walsh, Edward, Less Than A Michigan Miracle5 Ibid. 6 Whitman, David. A reality check on welfare reform. U.S. News & World Report, November 13, 1995, U.S. NEWS; Vol. 119 , No.19; Pg. 46, 487The Un-Balanced Budget: The Impact of the Congressional Budget on Homelessness, National Coalition for the Homeless report, p.8 8 Lehrman, Robert,Welfare reform, An Analysis of Issues,, Urban Institute publication, Ch. 4, p. 19 9Peterson, Paul. State Response to Welfare Reform: A Race to the Bottom?, Ibid. 10Vroman, Wayne. Rainy Day Funds: Contingency Funding for Welfare Block Grants. Ibid.

1996 The Yale Journal of Ethics. All rights reserved.
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