Great Recession Exposes Flaws in Welfare Reform
The US enacted the Clinton-Gingrich welfare reform in the midst of the largest postwar expansion in four decades. It was not put to the test for many years, and really not until the Great Recession. And now we’re seeing that it doesn’t work for most of those who need it.
The simple problem is that cash welfare rolls have not expanded despite a significant expansion in need. Because the program operates as a block grant, it does not increase as the number of potential recipients increases. And the states have the ability to do with the program as they please, including dropping the rolls even now.
Most states seem more interested in limiting the rolls to “prove” that the program succeeds in getting people off it and into work and also to reduce spending amidst a budget crisis. So you have a desperate need for counter-cyclical spending to keep people afloat, with a cyclical program that rises and falls with the economy. This is particularly difficult on single mothers. Here are some of the real stories of what welfare recipients do in absence of the program benefits:
Esmeralda Murillo, a 21-year-old mother of two, lost her welfare check, landed in a shelter and then returned to a boyfriend whose violent temper had driven her away. “You don’t know who to turn to,” she said.
Maria Thomas, 29, with four daughters, helps friends sell piles of brand-name clothes, taking pains not to ask if they are stolen. “I don’t know where they come from,” she said. “I’m just helping get rid of them.”
To keep her lights on, Rosa Pena, 24, sold the groceries she bought with food stamps and then kept her children fed with school lunches and help from neighbors. Her post-welfare credo is widely shared: “I’ll do what I have to do.”
That last one reveals a new reality. Food stamps are a mandatory benefit, where spending rises with eligibility. So as the welfare rolls have dropped, the food stamp rolls have expanded massively, almost in inverse proportion. The two programs used to rise and fall together until welfare reform in 1996. So naturally, the next thing Republicans want to do is to block grant programs like food stamps and Medicaid.
This is what we’re talking about when we say “safety net.” The Great Recession shrunk the pool of available jobs. Without them, and without cash transfers like welfare, the poor and unemployed have even less chance of making ends meet. Jared Bernstein writes:
If welfare reform is so effective at putting people to work, why did it seemingly stop working 12 years ago? Because it’s architecture is that of a fair-weather ship—take the wind of full employment out of its sales and it founders on the shoals. And in this shipwreck, women and children don’t get away in the lifeboats. To the contrary, they risk drowning.
And in a kind of follow-up, the Times notes today that funding for job training, in large part for this same group of people, is fading away:
Across the country, work force centers that assist the unemployed are being asked to do more with less as federal funds dwindle for job training and related services.
In Seattle, for example, the region’s seven centers provided training for less than 5 percent of the 120,000 people who came in last year seeking to burnish their skills. And in Dallas, officials say they have annual funds left to support only 43 people in training programs, nowhere near enough to help the 23,500 people who have lost their jobs in the last 10 weeks alone […]
Federal money for the primary training program for dislocated workers is 18 percent lower in today’s dollars than it was in 2006, even though there are six million more people looking for work now. Funds used to provide basic job search services, like guidance on résumés and coaching for interviews, have fallen by 13 percent.
We are starting to see very keenly what a country looks like under a system of, to borrow a phrase, social Darwinism, where government plays no role in giving its citizens help when they need it. Slowly but surely, those sources of help are being chiseled away.