10 Years Later
A little more than a decade ago I wrote an article for Florida Trend about changes in the federal welfare laws and their potential impact on Florida citizens and businesses. The reforms eliminated cash assistance from the government as an entitlement. They created a maximum 60-month lifetime limit (Florida chose a 48-month limit) on how long someone can receive cash assistance and required those who seek cash assistance to look for work. The reforms also integrated representatives of local business communities into the process of planning training programs and moving people from welfare to work.
How do things stand today? Back in September 1996, there were 155,071 adults in Florida receiving cash assistance from the government. Presently, there are fewer than 10,000. That amounts to a 93% decrease — even after the government relaxed some of the original rules regarding time limits and work requirements, according to Don Winstead, deputy secretary of the Florida Department of Children and Families. Winstead has 36 years of experience with welfare programs, having worked at jobs ranging from a caseworker to Florida’s welfare reform administrator to deputy assistant secretary at the U.S. Department of Health and Human Services.
“The number of families receiving cash welfare is now the lowest it has been since 1969, and the percentage of children on welfare is lower than it has been since 1966,” says Winstead. “It’s an amazing story — one of those instances where what people hoped would happen is exactly what did happen.”
One fear — that the least skilled, least educated welfare recipients would exhaust their benefits and end up destitute with their children on the streets — hasn’t materialized. “Almost nobody has lost benefits due to time limits,” Winstead says.
Nor is it true that welfare reform has pushed welfare mothers and their children deeper into poverty. For one, as Winstead points out, Florida’s traditionally low level of welfare benefits meant that even a low-wage job produced more income than the welfare check. In addition, low-wage workers can use the Earned Income Tax Credit to boost their incomes. Other policies let many former welfare recipients remain eligible for food stamps or help with transportation and child-care costs to support the transition to work. “There’s been a conscious effort in policy structure to change incentives from incentives that penalize work to incentives that reward work,” says Winstead.
A healthy Florida economy has helped. Florida’s poverty rate has fallen from 16% in 1995 to about 12% presently. The poverty rate for children, the Americans most likely to be poor, has fallen in Florida from 26% in 1995 to 18% in 2005 (the most recent figures available). The state’s economy and the need
for workers has helped in another way, softening resistance from businesses that were hesitant to employ former welfare recipients. “Attitudes have changed,” says Curtis Austin, president of Workforce Florida, the policy board in charge of the state’s welfare-to-work mechanism.
The percentage of employers involved with the workforce system more than doubled from 2000 to 2004 and continues to rise. “Today, employers don’t even blink at you when you talk to them about employing a former welfare recipient. People are really being integrated into the workforce,” Austin says.
Let’s be clear. Florida is no bed of roses for either low- income workers or children. Nearly one in five Floridians lacks health insurance, and an 18% child-poverty rate, though a big improvement over 1995’s rate, is nothing to brag about. Amid a growth dynamic that has obliterated its status as a “low-cost” place to live, Florida remains a low-wage state. Median family income in Florida between 2002 and 2005 dropped slightly, and the state’s median hourly wage is still below the national average, according to the 2006 “State of Working Florida” report by Bruce Nissen and Yue Zhang at the Center for Labor Research and Studies at Florida International University.
Those facts may define the state’s economy for some time. Meanwhile, however, the reforms have clearly succeeded at moving a large number of women off the dole and into jobs where they’re getting the experience that will lead to increased productivity and better incomes. Nationally, according to data Winstead provided, employment among never-married mothers, most of whom join the welfare ranks within a year or two of giving birth, grew from 44% to 66% from 1993 to 2000. Before 1996, never-married mothers were the ones most likely to be school dropouts, to go on welfare and to stay on welfare for a decade or more. Yet their employment over this period grew by 50%. Employment changes of this magnitude over such a short period for an entire demographic group are unprecedented in Census Bureau records.
Perhaps the most hopeful sign that the traditional cycle of dependency is cracking: Among the girls in Florida families receiving cash assistance in 1996, only 1.6% are receiving cash assistance as adults today. That’s a big sign that those children took the example of a parent working rather than one collecting a welfare check — and are staying off welfare themselves.
There are no levers in the welfare reform laws to address the issues of why poor, young women have babies outside of marriage — the worst decision a poor, young woman can make. Nor do the laws provide incentives for poor, unskilled men to work. Nor has the success of welfare reform yet prompted any broader consideration of all the ways our society subsidizes lower-income people and how we could do it more effectively.
But the reforms have clearly succeeded at sending a message about the value of self-sufficiency, and the recipients of that message have responded with a resourcefulness and energy that many of their “advocates” never credited them with. As Manhattan Institute fellow Kay Hymowitz wrote in the City Journal, “When the culture expects self-sufficiency, people will try to achieve it. The idea was not to get people to respond to particular inducements. It was much bigger than that: To try to get them to change their orientation toward life.”