Sagging Economy Hurting Jobs-Based Welfare Reform : Poverty: Recipients feel squeezed by the lack of good-paying positions. Often, they earn less working.

The Paradise Ranch Resort, designed as a golfing and fishing spa for affluent tourists in Oregon’s unspoiled Rogue River country, doesn’t seem at first glance to be a good place to investigate the connection between welfare and jobs. But it is.

Here, after a round of golf, guests can enjoy an aged steak in a candle-lit dining room and retire to a well-appointed private lodge complete with wood-burning fireplace. No need to notice that the beds were made, the grass cut and the food served by people whose families subsist for a week on what the resort may charge for a night’s dinner and lodging.

Guests who checked in for the busy summer season would never have known from bantering with Dorine Epple, the bright, blonde and personable 27-year-old desk clerk, that she has spent much of her adult life on welfare. That was before she became one of the working poor, expected to live on a salary of $5.50 an hour. She can’t.

If she hadn’t recently married a man who works in an auto body shop, she and her 4-year-old daughter would be back on welfare.

But, working and married, Epple and her child are still poorer than they were when they received welfare. They no longer have their federal rent subsidy, and child care has become a costly problem. The family goes without medical coverage because neither employer provides it.

What would they do about a major illness? “I don’t know,” she says with a nervous laugh. “Just trust in the Lord and hope that he will see us through.”

Both Democratic and Republican Party campaign platforms demand that mothers like Epple do just what she has done--get a job. Both parties are committed to reforming a welfare system which, because of previous cutbacks, now consists mostly of the Aid to Families with Dependent Children (AFDC) program. Some 68% of AFDC recipients are children; most of the rest are single mothers, which complicates their search for jobs.

And what about the dignity and self-esteem that the presidential candidates assert Epple should feel now that she has a job and has earned her high school degree in a federal training program. Isn’t it a relief to be freed from the stigma of welfare dependency?

Not so simple. “I didn’t feel like a low-life,” Epple says of her years on welfare, “I feel more like a low-life when I can’t make my bills on my own.”

Debate on Initiative

When presidential candidates George Bush and Bill Clinton talk about welfare recipients getting a job, they make ending what they both term “welfare dependency” seem an obvious and likely alternative, implying that welfare recipients’ lack of initiative is the cause of their poverty. (Ross Perot says he would try to encourage initiative by not punishing recipients who take jobs or try to save.) But initiative appears not to be at the core of the issue in Oregon, and in much of the country, where welfare rolls have soared as the number of manufacturing and other good-paying jobs has declined in the worst economic downturn since the Great Depression.

Across the nation, 1.2 million manufacturing jobs have been lost in the last three years, the U.S. Department of Labor reports.

In southern Oregon, as elsewhere in the nation, job training and placement programs created by Congress in the 1988 Family Support Act have been woefully underfinanced. Worse, perhaps, most such programs fail to equip recipients with the skills that would win them better paying work. And even with such training, good jobs are harder and harder to come by.

Epple, for example, is qualified to work as a furniture assembler in a local plant, which pays $7.10 an hour to start and offers medical coverage. However, she says, when she applied there were more than 300 people ahead of her on the list, and new hirings are rare.

The jobs that are available pay less, and usually do not offer medical benefits, which she would be entitled to when on welfare. The end result is that, while Epple and her family would be living below the federally defined poverty level whether she works or is on welfare, it is welfare that would leave her better off.

The situation in Oregon hardly is unique. A study commissioned by the state of Michigan estimates that when a welfare recipient there takes a minimum wage job, the family’s income (including food stamps and medical care) declines from $14,000 on welfare to $10,000 working. And, for a family of three, that drops it below the federally defined poverty level--$10,860.

To complicate the problem, few women on welfare in any state have the cooperation of a natural father or stepfather. When such a single mother is required to join the work force, she confronts the question of how to fulfill her most basic obligation--caring for her child.

Take the case of Michelle Moore, an eagle-eyed mother watching her three young children playing in the alley of the Los Angeles public housing project she moved into last year. She takes part in California’s job training program known as Greater Avenues to Independence, or GAIN. Through it, she has learned the skills required of a receptionist or clerical worker.

But both training and work take her away from her children, and it is clear when one speaks to her that watching the kids is a major job.

Her children, who are 6, 7 and 8, must survive in an environment that destroys young African-American life at a ferocious rate.

Their “safe play” area is in the alley immediately in back of her unit. Although an occasional low-rider blasts by, pointedly ignoring the 5 m.p.h. speed limit and scattering the kids, at least mom has them in sight. But there are other dangers to look for.

Of Wendell, her 7-year-old, she says: “Soon they’ll be pushing him to get in a gang or run drugs, and that’s the end of everything.” She does not allow her kids to go to the small store across the street because it is a gathering point for hard-eyed young men who appear to be dealing drugs--when they are sober enough to focus on economic transactions.

These conditions make leaving the safety net of the welfare rolls more difficult. There has been some progress, but it is spotty.

In some California counties, the GAIN program in which Moore is enrolled has “produced an increase in earnings and a reduction in welfare payments. . . “ according to a state-financed study. However, in Los Angeles County, which has the highest percentage of less-educated long-term recipients and fully one-third of the state’s welfare caseload, the survey found no progress.

Those who participated in the GAIN program in the six counties studied did earn, on average, 17% more from their primarily part-time jobs than non-participants. But that translated into only $271 more for the entire year in increased earnings. The savings to the government in welfare payments as a result of the program averaged $281 per family for the year.

The result was that the welfare recipient ended up with $10 less in total yearly income after a great deal of expensive job training. The state’s savings of $281 in welfare costs was more than offset by the costs to the state of supplying child care, counseling, transportation and other support needed to secure the job.

The picture painted by such statistics seems particularly dismal, when measured against the hopes generated in 1988 when Congress passed the Family Support Act. One of its provisions--the Job Opportunities and Basic Skills (JOBS) training program--required all welfare mothers with children older than 3 to participate in educational and job training, like GAIN.

But many states, deep in their own financial difficulties, have not been able to accept their share of the program’s costs. Last year, states used only about 60% of the available $1 billion in federal matching funds. California alone forfeited $60 million by failing to match federal job training funds. Nationally, only one out of nine of those legally required to attend JOBS programs have been able to find places.

Sen. Daniel Patrick Moynihan (D-N.Y.), the law’s sponsor, argues that such training efforts take time to develop, and that we will not know “until the year 2000” whether the program is a success. In the meantime, he has introduced legislation authorizing a $4.5-billion increase in the program.

Prospects for Reform

But in a period of declining opportunities for unskilled workers, what are the real prospects for welfare reform through job training--and at what cost?

That would seem to depend on whether the objective is to end welfare or end poverty.

That these can be competing goals is recognized in the alternative approaches to the problem taken by the governors of New Jersey and California.

In California, Gov. Pete Wilson hopes to achieve short-run budget savings with a “Taxpayer Protection Act” initiative on Tuesday’s ballot that cuts welfare payments up to 25% after six months. By making welfare less attractive, he hopes that even low-paying jobs will become more desirable. Wilson’s proposal, Proposition 165, allocates no additional funds for the GAIN job-training program, and makes no provision for child care or transportation for job seekers.

By contrast, in New Jersey, an ambitious bipartisan effort aims at reducing the welfare rolls with a program that teaches skills required to get better paying jobs. It also provides increases in child care, transportation and other support during the transition period. It is a relatively costly program, so expensive that it currently exists only as a pilot project in three counties.

New Jersey’s Gov. James J. Florio, a Democrat, and Camden Assemblyman Wayne R. Bryant, also a Democrat, have managed to push through the state’s Republican-controlled Legislature bills adding $13 million to the state budget for this welfare reform.

“Our program is designed to provide cost savings in the long run through the enhancement of the productivity of the population,” Florio said in an interview. He puts great emphasis on high-tech training and terms it “stupid to train people for jobs that are no longer there. . . . High school drop-outs used to get jobs and still make a decent living--no more.”

But even Florio’s approach begs the question of whether those new better-paying jobs exist.

The most depressed area in New Jersey is Camden, which Florio once represented in Congress and which Bryant now represents in the state Legislature. Sixty percent of the population of that once thriving city is on welfare.

Camden’s plants are boarded up. Once-proud manufacturing behemoths have shriveled into white-collar administrative centers or have disappeared entirely.

But in California, Wilson insists that it is not the recession and loss of jobs, but the welfare system itself that has caused the rolls to swell.

Limiting Earnings

Recognizing that simply forcing people off welfare is not the answer, Wilson’s initiative would allow welfare mothers to work, though critics of the proposal point out the women’s income could not exceed the amount cut from their government payments.

Those critics, who include the state’s Catholic bishops, municipal social service agencies and advocates for the poor, argue that the burden of the welfare cut on poor children would be devastating.

“Currently in San Francisco,” according to an analysis by that city’s Department of Social Services, “the average AFDC family of three pays 46% of their grant on rent. If the proposed cuts go into effect, the same family would be paying 60% of their grant for rent, greatly increasing the likelihood that they will become homeless.”

Still, Wilson insists that an overly generous California welfare system rather than the recession is responsible for the recent and sudden rise in welfare rolls.

“Nonsense,” says Casey S. McKeever, a Sacramento lawyer specializing in welfare legislation: “Welfare payments per family were cut significantly by the Legislature only last year and were cut by another 4.5% this year quite apart from the Wilson initiative.”

McKeever, who is directing attorney of the Northern California office of the Western Center on Law and Poverty, argues that nationally state welfare payments when adjusted for inflation have been reduced by 43% over the past two decades. And during those 20 years, the welfare rolls generally held steady as a percentage of the population in California as well as nationally. At least that was the case until the recession caused an explosion in the numbers. In Los Angeles County, for example, an estimated 200,000 jobs were lost last year alone.

And, as a study by the county’s welfare officials concluded, that number reflects a dangerous trend: “The percentage of the county’s population employed in the labor market has declined steadily since 1987. A drop of this duration, which has now lasted four years, has not occurred since 1970 and probably not since World War II.”

Clearly, neither the Florio nor the Wilson proposals can solve what is essentially a national jobs problem. So what is to be done in the interim about the 13.7 million mothers and their children who, for better or worse, are nurtured by an admittedly imperfect welfare system?

After all the experiments and talk of reform over the past two decades, the answer is: Not a whole lot and nothing very cheaply--particularly as opportunities for all unskilled workers continue to decline.

The experience of other industrialized countries suggests that welfare may be a permanent feature of the modern economy as manufacturing jobs move to the Third World. Western European nations, for example, would have as high a poverty rate as the United States if it were not for income transfers, such as income maintenance, child care allowances and rent subsidies.

“We lead other rich countries in childhood poverty because we trail them in public transfers,” reported a study by the Center on Social Welfare Policy and Law, a public interest research organization.

The United Kingdom, Sweden and Germany all show higher percentages of children who would be living under poverty than the United States before income transfers are factored in. But those nations all end up with less then half the American poverty rate.

The study argues that the number of children living in poverty in the United States has increased dramatically in the past two decades, not because of dependency on a generous welfare system, but rather because welfare payments in real dollars have sharply fallen. On the other hand, poverty among elderly U.S. citizens greatly declined during that same period because Social Security payments, being indexed to inflation, rose.

Still, the idea of fighting poverty among America’s children by increasing welfare payments has relatively little support in this year of politics and recession.

The current consensus clearly favors cutting welfare, not poverty.

Times researcher Nina Green contributed to this series.