Cuts Will Strike Close to Home

Federal reform of the welfare system has implications for the entire nation, but the changes most significantly will affect California. And within the state, Los Angeles County will bare the brunt of cutbacks, given that the county’s welfare population numbers more than 1 million recipients--larger than in all but a few states.

In the next six years, California is expected to lose as much as $10 billion in federal welfare aid, nearly half from L.A. County. Focusing the lens even more tightly, only South-Central Los Angeles will suffer more than the San Fernando Valley.

This is true for several reasons. First, as of 1995, the welfare caseload in the Valley was the same size as in South-Central; both handled about 70,000 cases. Growth rates have been steep in the Valley, especially for the Aid to Families with Dependent Children and food stamps programs, despite falling rates in most of the rest of the state, according to the Los Angeles County Department of Public Social Services. (Despite the similar caseload, Valley residents overall are in better shape than those in South-Central, because a smaller percentage of the Valley population is on welfare.)

Second, most welfare recipients are not well-trained to enter the work force, so moving recipients into work presents challenges. A recent evaluation of California’s current welfare-to-work program, GAIN, found that nearly a third of the county’s long-term recipients had limited English proficiency. Four of five hadn’t finished high school or passed the equivalency exam. The average adult was nearly 40 but had not been employed in the past several years, according to the evaluation by Manpower Development Training Partnership, a national research group.

In the Valley, county census statistics show the current percentage of workers in blue-collar jobs--23.5%--equals the percentage with less than a high school education. Further, it’s unlikely that the local economy can absorb an additional 100,000 people moving from welfare to work. This figure is based on Social Services’ projection of noncitizens who will be cut from welfare in the huge 5th Supervisorial District of Mike Antonovich. Within the district, the highest concentration of welfare cases is in the Valley. Workers lacking education or language proficiency are not competitive in a labor market with a scarce low-skill jobs. Even before current welfare recipients head for unemployment lines, the county jobless rate is 7.6%. The county poverty rate is twice that--more than 14%--Census Department figures show. The two rates are slightly lower in the Valley than in the rest of the county, but a higher proportion of Valley recipients are expected to lose benefits under reform, because of the greater proportion of noncitizens. Welfare rolls in Antonovich’s district, for example, will be cut by 19% as a result of benefits cuts to noncitizens.

At the state level, three key facts about California should guide welfare reform. The first is the state’s high concentration of legal immigrants. California houses half of all legal immigrants in the United States, and 20% of this population receives welfare. Although immigrants compose a small portion of all aid recipients, savings from cutting these recipients is key to funding the entire reform effort.

The second and third facts are defined by the low skills of welfare recipients and the related capacity of the regional economy to absorb many poorly educated workers.

The shortage of jobs for low-skill workers is a substantial obstacle to reform. President Clinton has said he will increase incentives to private-sector employers who hire welfare recipients. This approach, however, addresses only the demand for the labor of welfare recipients, not the shortage of jobs.

In California, state Sen. Diane Watson (D-Los Angeles) has proposed creating a Works Progress Administration-style public program that would help create jobs for welfare recipients so they could move off the rolls and into low-wage work. California--and Los Angeles in particular--would do well to invest in such programs.

Ironically, California will receive a short-term windfall from the federal government as it moves from the pre-reform system of federal dollars portioned out based on the total number of aid recipients, to the new one of federal block grants that do not change for five years. Since 1994, the state’s improved economy, among other things, has led to a nearly 20% statewide reduction in the welfare caseload. (The reverse is true in the Valley, where the number of cases continues to increase.) But because block-grant funding is based on the ’94 statewide caseload, California will receive more money than before reform, at least for this fiscal year, which began Oct. 1. However, as caseload attrition stabilizes and cuts are gradually implemented, federal money will become scarce unless welfare recipients can be employed.

Now is the time for the state to take advantage of this last surge in federal support and use the resources for job creation. In the aftermath of the election, the state has a Democrat-controlled Assembly and a Latino speaker. The new political landscape is an opportunity to articulate the needs of the state’s poor.

Unless California can move beyond anti-immigrant, anti-welfare rhetoric, we will live in a county in which former welfare recipients work for less than the minimum wage and former low-wage workers receive welfare. Just as farmers used bracero labor in the 1950s and ‘60s to undercut wages of resident agricultural workers, unskilled welfare recipients, driven into a tight labor market to work for meager benefits, will force down barely sufficient wages.

Effective welfare reform requires investment, knowledge and commitment. The federal government’s effort earlier this year was about politics. Perhaps now, with a president unfettered by reelection concerns and a newly constituted state Assembly, it is time for a more sincere effort.