A Minute With...

Chi-Fang Wu, expert on welfare

7/24/2012  8:00 am

The U.S. Department of Health and Human Services ignited a firestorm of controversy on July 12 when officials issued a directive that now allows states to waive the work requirement for some welfare recipients under the Temporary Assistance for Needy Families (TANF) program. Conservatives view the policy change as undermining a welfare-to-work system that has succeeded in moving millions of people off welfare rolls and into the labor market. Chi-Fang Wu, an expert on the impact of public benefits on low-income families and a professor in the School of Social Work at the University of Illinois, discussed U.S. welfare policy with News Bureau reporter Sharita Forrest.

President Obama and his administration are being roundly criticized for the waiver plan. What’s your interpretation of these changes? Are they needed? Do they go too far – or not far enough – at modifying the current system?

image of professor chi-feng wuThe state waivers will give states more control and greater flexibility in developing demonstration projects that meet work requirements under TANF and are more effective strategies for assisting welfare recipients to “prepare for, find and retain employment.” Moreover, the state waivers would help states “focus on improving employment outcomes” for participants. These goals are consistent with the work focus of recent welfare reforms.

These waivers also represent a significant milestone because the current welfare system has focused too much on tracking work participation rates instead of assisting participants in finding and sustaining jobs that can support their families. My previous research and other studies demonstrate that although employment rates for low-income workers and welfare recipients have increased since the 1996 welfare reform, many have low-paying or part-time jobs, are unable to sustain employment, and lack stable earnings that lift them out of poverty.

Therefore, it would be helpful to modify the current system by allowing states to develop more innovative programs that can help participants clear barriers that impede employment gains and improve their earnings. Such innovations might include redefining the work requirement by considering education and vocational training as types of work activities that aim to improve employment outcomes of participants.

In addition, the announcement states that “the HHS is committed to ensuring that any demonstration projects approved under this authority will be focused on improving employment outcomes and contributing to the evidence base for effective programs.” This evaluation requirement would mandate states to measure outcomes in more meaningful ways and to assess the effectiveness of innovative and effective initiatives related to employment, training and education.

Overall, these new changes are needed not only to meet the work goals of TANF but also to strengthen the safety net for welfare recipients and low-income families and help them succeed in employment, thus increasing their self-sufficiency.

Proponents of the current system see the Clinton-era welfare reform legislation as a smashing success at moving recipients off welfare and into gainful employment.  Has it been?

TANF replaced Aid to Families with Dependent Children (AFDC) in 1996. Since the 1996 welfare reforms, the number of individuals and families receiving TANF cash benefits has fallen dramatically and employment rates have risen. However, much of the literature on the economic well-being of welfare recipients and welfare leavers suggests that many who have made the transition from welfare to work move in and out of the labor market frequently, work for low wages, and have insufficient earnings to support a family above the poverty line and must continue to rely on public benefits such as food stamps to provide for their families.

For example, my colleagues and I examined employment and earnings trajectories of Wisconsin welfare recipients over six years to better understand employment pathways that may result in poverty reduction. We found substantial diversity in employment and earnings patterns. Many welfare recipients who were successful in the medium-term (three years) were unable to sustain their progress over six years. Very few participants were consistently employed, and even fewer had consistent moderate or high earnings.

Moreover, I have extended this work to a nationally representative sample of low-income families and found despite the high proportion of low-income mothers employed, a substantial number were unable to sustain employment and had low earnings.

These findings point to the importance of advocating for social policies that provide additional income and employment supports for welfare recipients and low-income families.

If the goals of welfare reforms are to help families “avoid dependence on government benefits” and to improve their economic well-being, these goals have not yet been achieved. Although the welfare rolls have shrunk, poverty, particularly in single mother households, hasn’t changed a great deal since the welfare reforms and has even increased since the Great Recession.

Mary Eamon (a professor in the School of Social Work) and I recently examined differences in employment status, economic hardship, and receipt of government and private assistance before, during and after the Great Recession. We found that during and after the recession, high percentages of low-income, single mothers experienced unemployment and underemployment and economic hardship, and low percentages were adequately employed.

How do we solve the problem of welfare dependence when the U.S. economy is still wobbly from the latest recession and families need safety nets?

Our research shows that high percentages of single mothers experienced employment problems related to poverty both before and after the Great Recession. Our results suggest that the best way to “avoid dependence on government benefits” both in and out of a recession is by promoting adequate employment. All of our research findings demonstrate why more projects such as those proposed by the state waivers are needed to assist welfare recipients and low-income parents (particularly single mothers) to gain not only employment, but “adequate” employment.

Many parents, particularly low-income mothers, are in great need of “alternative and innovative strategies, policies and procedures that are designed to improve employment outcomes for needy families.” In the absence of government support programs that raise families above poverty, if employment outcomes are not improved for needy families, they will continue to live in poverty.

The HHS announcement and letter to state officials about the waivers is available here

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