Workfare Plan Falls Short as Relief Rolls Lengthen : Welfare: The program to move recipients into jobs is hit by shrinking budgets and failing confidence in it.

Lisa Van Dyken, a mother of two on welfare, was fast becoming a model of the state’s new philosophy: Welfare recipients should learn job skills so they can get off public assistance for good.

A resident of Valley Center in northern San Diego County, Van Dyken was enrolled in California’s workfare program, which paid for her child care and transportation while she took classes to become a paralegal. But recently she and 361 others got some bad news. Because of a shortage of funds, they were dropped from the workfare program--in Van Dyken’s case, just four months before she was to graduate.

“It just really makes me mad,” she said. “They made an agreement with me to help me through this and now they are backing out. Right now, I have 45 cents in my pocket. I don’t know how I’m going to make it.”

Van Dyken’s plight comes at a crucial juncture for California’s welfare system.

Despite repeated attempts to put welfare recipients into jobs, more people than ever--nearly 2.1 million Californians--are on aid. The workfare program, once praised as the nation’s best hope for moving welfare recipients into jobs, has fallen victim to shrinking budgets and failing confidence among government officials. Foremost among its problems was the discovery that most recipients cannot read or write well enough to hold a job and require many months of costly remedial education.

Within days of taking office, Gov. Pete Wilson proposed a historic change of direction--a 9% cutback in the welfare grants themselves and further cuts in the workfare budget. The Republican governor said his aim is twofold: to encourage recipients to find work and to pump the welfare savings into preventive health programs for poor children.

“There is no magic,” Wilson said in an interview. “There is no overall prescription that is going to reach everybody on welfare.”

Wilson’s proposal has reopened the debate in California over just how far society should go to take care of the poor.

Welfare advocates have long argued that government has an obligation to provide for impoverished families--particularly young children--who have no other means of support. They also question the effectiveness of work incentives or requirements for the large number of welfare recipients who are disabled, do not speak English or cannot read and write.

But a growing number of academics and public officials like Wilson contend that cash grants handed out through Aid to Families With Dependent Children (AFDC) do a disservice to the poor, trapping them in a state of welfare dependency and providing no reason for them to work.

“Welfare shouldn’t become a way of life,” said one Wilson Administration official. “It’s a transitional program for helping people who are down on their luck to get back on their feet.”

For government leaders, the growing welfare population is a problem that seems to defy a solution. After more than two decades of efforts to “reform” the welfare system, the AFDC caseload is larger than ever.

Attempts to overhaul the system have focused on AFDC because it serves more people--including more able-bodied people--and is more costly than any other aid program. Other forms of state public assistance include the Social Security Income/State Supplemental Program, which serves the aged, blind and disabled; In-Home Supportive Services, which provides help to the disabled; and food stamps, grocery coupons for the poor. Counties also provide general relief to adults who need assistance but do not qualify for other aid.

As of December, 1990, the last month for which statistics are available, there were 846,685 families--nearly 2.1 million individuals--receiving AFDC in California. This is an increase of 49% since 1980, when there were fewer than 1.4 million people on AFDC. By contrast, the state’s population grew 24% during the same decade.

Moreover, the welfare caseload jumped 10.5% during the year that ended in December--despite the efforts of the Deukmejian Administration to scale back.

State officials are uncertain how to explain the surge in welfare cases but point to a variety of factors, such as an increase in the number of teen-age mothers and in the number of refugees arriving in California.

By necessity, any government effort to put welfare recipients to work will be limited. Of the 2.1 million people on welfare, more than 1.4 million are children.

State officials also have found that only 59% of the adults on welfare are able to work. The remainder are not required to participate in the workfare program for reasons such as health difficulties, transportation problems or children at home under the age of 3.

Although some recipients remain on the rolls for many years, public assistance is a temporary haven for most. The average stay on aid is less than 17 months, welfare officials say. More than 60% of all recipients are off welfare within 12 months--but half of them are back on the rolls within three years.

For many recipients, the welfare grant--plus Medi-Cal and food stamps--provides a better standard of living than holding a job at the minimum wage of $4.25 an hour. A family of three on welfare receives a maximum of $694 a month plus $277 in food stamps. By comparison, someone working 40 hours a week for the minimum wage receives about $735 a month.

“Currently, there is very little incentive for someone to work,” said legislative program analyst Michael Genest. “For (the head of household in) a family of three to get a job on the minimum wage, they’re going to have less money in their pocket than if they just stayed on welfare.”

In fact, some incentives not to work are built into the system. Anyone who works more than 100 hours a month is not eligible for aid. And welfare recipients who work part time lose a portion of their grant if they earn more than $30 a month above their child care, transportation and other work-related expenses.

The cost of providing welfare grants to more than 2 million people is enormous. Wilson’s proposed budget allocates $5.6 billion for AFDC during the next fiscal year. The problem is compounded by a projected state budget shortfall of as much as $10 billion.

Wilson’s solution is to try to roll back welfare grants to their 1988 levels.

For a single mother with two children, that means a reduction in the monthly payment from $694 to $633. Part of the loss would be made up by an increase in food stamps worth $19 a month for a family of three. In addition, welfare recipients could earn money to make up the remainder of the loss without further reductions in their grants.

Wilson said his proposal is an attempt to undo two of the “welfare reforms” approved by Ronald Reagan as governor of California and as President. As part of a compromise in the early 1970s, Gov. Reagan made a concession that his fellow Republicans have long regretted: providing an annual cost-of-living increase for welfare recipients that has helped push California’s grants to the second-highest in the nation. Then, as President in 1981, Reagan sharply reduced the amount of money that welfare recipients could earn, further eroding welfare recipients’ incentive to work.

Wilson argues that his plan to roll back past cost-of-living increases and restore a portion of the work allowance would encourage welfare recipients to find jobs and make up their lost income.

“It is obviously not going to provide them with the ability to be self-supporting,” Wilson said, “but at the very least it does require that they make some minimum effort to supplement their income, and that’s good.”

To make up for the $42 net loss in monthly income, a welfare mother with two children would have to work 23 hours a month at a minimum-wage job, according to program analyst Genest. This estimate includes her additional costs for working, such as transportation, clothing and Social Security. If she also had to pay for child care, it would require 41 hours of work each month to make up the difference, he estimates.

The flaw in the Wilson plan, welfare advocates argue, is that many recipients who are able-bodied and already want to work are unable to find jobs. In addition, the 53% of welfare recipients who are unable to work would have no way to make up the lost income.

‘The governor’s proposal punishes the vast majority of families that are not in a position to work,” said Casey McKeever, an attorney with the Western Center on Law and Poverty. “What they’re doing is slashing basic benefits for the vast majority. They’re saying, if you can’t maintain your living standards, it’s your fault.”

For Wilson, reducing the cost of welfare is a high priority. The estimated $225 million in savings from his proposed cuts would allow him to fund his most significant policy initiative of 1991, a variety of preventive health and education programs aimed at helping children.

Critics argue that Wilson’s cuts in the welfare grant would harm children most of all. Of the 7.7 million children in California, more than 18% are on welfare.

But the governor contends that his new programs, such as pediatric care and mental health counseling offered in schools, would provide more important help to welfare children, as well as children from poor working families.

“I am concerned with children in a variety of ways,” the governor said. “I’m also concerned that children not grow up in an environment where they come to accept welfare . . . as a way of life.”

Aid to Families With Dependent Children was created at the height of the Depression to provide assistance to widows and their children, but its scope was greatly expanded over the years.

In the early 1970s, Gov. Reagan proposed a primitive workfare program, along with tighter restrictions on eligibility for aid. But his experiment flopped as few counties implemented the program and only a handful of recipients worked briefly in community service jobs.

As President in 1984, Reagan authorized the states and counties to experiment with different types of workfare programs. This led to a somewhat successful pilot project in San Diego in which welfare recipients were placed in assignments intended to provide on-the-job training.

In 1985, the Legislature and Gov. George Deukmejian created California’s new workfare program, known formally as Greater Avenues for Independence (GAIN). Modeled in part on the San Diego experience, state officials believed the comprehensive program would put welfare recipients into jobs and save the state money.

The most complex of its sort anywhere in the nation, it requires able-bodied welfare recipients to participate in job search, education, training or community service work.

Politically, it was a compromise between Republicans, who wanted to make welfare recipients work in exchange for their checks, and Democrats, who pushed for education and job training that would help people on aid find jobs that paid enough to keep them off the rolls.

The GAIN program served as a model for the federal government in 1987 when Congress and President Reagan approved the JOBS program, a similar combination of training and mandatory work for welfare recipients.

But in California, GAIN has never been fully implemented.

One of the biggest setbacks was the discovery that more than 60% of the people on welfare could not read, write or do arithmetic well enough to hold a job.

As a result, far more of GAIN’s resources have gone into remedial education, a time-consuming program that has driven up the cost of workfare and reduced the number of people it can serve.

By 1991, GAIN was supposed to include all able-bodied welfare recipients who were not exempt from the program. But faced with a lack of money, state officials acknowledge that the program will never reach its goal.

Deukmejian, who grew increasingly disenchanted with GAIN, cut the workfare budget last year, requiring some counties to reduce the number of people they could serve. Wilson’s budget calls for a further cut of more than 10%, reducing state and federal support from $362.3 million to $325.2 million for the next fiscal year.

The San Diego County GAIN program, one of the largest and most successful in the state, was caught off guard and forced to trim back in midyear. As a result, 208 welfare recipients who had volunteered--including Lisa Van Dyken--were ejected in the middle of their schooling. Del Norte County was caught in a similar squeeze and pushed 154 people off workfare.

“There just aren’t funds to serve everybody,” said Ray Koenig, coordinator of the San Diego County GAIN program, who reluctantly removed Van Dyken and the others from the program. “Some of them may have to take out loans for child care or turn to neighbors. Some may have to drop out (of their classes).”

Many of the welfare recipients who have participated in GAIN have praised the program, saying it has helped them learn skills and find employment. Some concede that they would never have joined if GAIN was not mandatory. But others complain that it has been a waste of time and has done little to prepare them for the working world.

For welfare officials, the success and cost-effectiveness of the program have been difficult to measure.

Of 311,000 people who have participated so far, 104,000 have started working, according to the state Department of Social Services. However, only 28,134 ended up in jobs that have allowed them to get off welfare entirely.

While state officials are pleased with the number who have found employment, they cannot be sure that GAIN itself was responsible. Without workfare, the same welfare recipients might very well have found jobs on their own, noted Dennis Boyle, a deputy director of the Department of Social Services who oversees the GAIN program.

The state has hired the Manpower Demonstration Research Corp. to track the progress of 30,000 welfare recipients, including workfare participants and non-participants, to see how many find jobs and get off welfare. The first conclusive results are not expected until next year, however, in part because of the length of time needed to train welfare recipients and make sure they have landed permanent employment.

Nevertheless, Judith Gueron, vice president of the New York-based research firm, said the early signs are positive. “What’s happened in the implementation of GAIN is very impressive,” she said. “It’s got the combination of toughness and services that (welfare recipients) view very positively.”

But the program has drawn fire from conservatives who want to see a greater emphasis on mandatory work and a smaller role for education. Particularly galling to them was the discovery that in at least three cases, welfare recipients who already had college degrees were subsidized through GAIN while they studied for master’s degrees.

Such a course of study is no longer allowed and education programs are geared more toward vocational training. But these cases have helped fuel the criticism that GAIN offers too much to welfare recipients.

Wilson said he will wait to see the results of the Manpower Demonstration Research Corp. study before proposing an overhaul of workfare. But he said he believes it should be restructured to put more emphasis on work training, especially for those who are taking remedial classes.

“The program has been disappointing,” Wilson said, “in the sense that people have remained on it for a very long time and it has not produced the employment that had been hoped for.”