More Welfare Opportunities

In 1996, newspapers contained many doomsday warnings after President Clinton signed the 1996 welfare reform bill. How wrong they were! From January 1993 to June of 1998, the number of welfare cases in Washington state declined by 25 percent. This compares to a national decline during the same time period of 39 percent. In Wisconsin, welfare caseloads have dropped by 86 percent and in our neighbor to the south, Oregon, caseloads have been reduced by 57 percent.

Significant budget savings have been realized from our state’s caseload reductions. Unfortunately Governor Locke has plowed that savings back into other non-welfare-related programs. But more important than budget savings are the human beings who have an opportunity to begin leading productive, independent lives. Welfare reform naysayers in our state are hammering lawmakers to return to policies of old saying children are the victims of the new reforms. Evidence from states whose caseload reductions have dropped more sharply than ours indicates that children are faring well under new reforms.

We urge lawmakers to take a look at the successful welfare reform programs in Wisconsin and Oregon—two states not known for conservative politics. If the Oregon system was implemented in our state, rather than having 74,969 welfare cases, we would have 43,244. If our lawmakers adopted the Wisconsin system, those 74,969 cases would decline to 14,080. If our state met the national average, 74,969 cases would turn into 61,346. These numbers represent real human beings in need of productive, satisfying lives.

Translating this into dollars, if Washington state implemented Wisconsin’s welfare reform, we would save at least $638 million in the next biennium (two-year budget cycle). Or, if the state merely implemented Oregon’s reforms, we would save $333 million in the next biennium. These numbers only consider welfare grant savings; they do not include the additional savings in medicaid and related programs.

Our state is moving in the right direction, but we need to accelerate the pace. To do so, we should adopt the following common characteristics of more successful welfare reform programs:

1) Set the right goal of reducing welfare caseloads, not exits. Large numbers of "exits" from welfare will occur even when welfare caseloads are rising due to the revolving door issue. Highly employable persons sometimes move in and out of the welfare system skewing exit totals. By contrast, serious work requirements may temporarily reduce the number of welfare exits since it discourages the most employable persons from enrolling in welfare in the first place.

2) Mandate a strong work requirement. The most important effect of a work requirement is to dramatically reduce the number of persons who apply to obtain welfare.

3) Focus work on the most employable recipients first. The initial goal of welfare reform should be to restrict welfare to those who truly need it, eliminating those who do not need welfare but will take a free handout if it is offered.

4) Establish pay-after-performance workfare. Upon applying for welfare, employable recipients should be required to begin a supervised, intensive search for employment. If they have not found a private sector job within six weeks, they should be required to perform community service work. For those performing community service, welfare should be based on pay-after-performance; that is, they will not receive the welfare check until after they have performed the required work. If they fail to perform the required number of hours of community service work, the check must be reduced pro-rata. Though this is a requirement of the new federal law, our state is not seriously enforcing it. Instead, it appears state officials are allowing recipients to look for numerous back doors.

5) Put the bureaucracy on performance incentives: reduce the department’s budget if it doesn’t meet performance goals. In Wisconsin county welfare offices are required to earn JOBS funds by meeting specific performance criteria. Agencies that fail to meet tough performance standards for caseload reductions are put on notice to meet objectives, or the work will be outsourced.

Oregon’s JOBS PLUS

We believe the Governor and the legislature should take a closer look at our neighbor to the south. Oregon’s welfare reform program is a work program, and as more Oregonians have gone to work, the welfare caseload has declined. Last year we spoke with Sandie Hoback, Oregon’s Adult and Family Services’ administrator, who said that instead of fixating on eligibility requirements, the state welfare agency has become a full-service employment center. This means that when a client applies for assistance in Oregon they will receive job services.

For participants, the key to success is immediate placement in unsubsidized jobs, or temporarily-subsidized, training-oriented jobs for those unable to get unsubsidized jobs immediately. Wage subsidies are paid from a pool of public assistance benefits, and guaranteed supportive services are available throughout the transition to self-sufficiency.

Employers benefit from a larger work force from which to recruit workers. They have the opportunity to try out new workers at new jobs at little or no initial wage cost. On a more subjective level, employers also have the opportunity to contribute to the well-being of fellow citizens as they help reduce the need for public assistance.

Prepared by Bob Williams, Senior Research Analyst, (360) 956-3482 or effwa@effwa.org

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org