Oregon in the Spotlight as Welfare Reform Laboratory

Here is a scene from one of America’s welfare laboratories.

It is a borrowed college classroom where dozens of those who care for Oregon’s poor--but have probably never met--are gathered for a kind of bureaucratic group therapy.

Because of welfare reform, these social workers, state administrators, academics, community advocates and business philanthropists are undergoing an institutional identity crisis.

As an icebreaker at their meeting, they scribble anonymous critiques of their efforts and post the comments on a wall.

“Too much change,” one participant writes.

“Too resistant to change,” is another opinion.

So goes the nation’s charge toward a new kind of compassion--one bold step forward, then a worried pause.

Few states have spent more time initiating welfare reform than Oregon. It didn’t wait for Washington to clear the way. As it has with other public challenges--such as health care--Oregon’s socially experimental lawmakers set off on a path of their own about eight years ago.

Today, Oregon’s welfare rolls have dropped more than 37% in the last four years, the third-best record in the nation. That has prompted 19 state delegations considering their own welfare changes to visit recently and see how it was done.

California officials, who are preparing for a major overhaul of the state’s welfare system expected next spring, said they have examined the experience in Oregon.

It is a story that has had plenty of bold steps and pauses.

New experiments required more funding, forcing a trio of Democratic Oregon governors and two Republican legislatures to make a commitment to untested ideas. Initially, they passed the nation’s highest per-capita welfare budget.

“We managed to get through it because we were dedicated,” Republican state Sen. Jeanette Hamby boasts today.

Seemingly good-intentioned ideas, such as college education for welfare recipients, were abandoned. And initially hostile plans, such as a conservative businessman’s ballot initiative to end welfare, were hammered into national models.

In August, when President Clinton signed the nation’s welfare reform bill, he pointed to Oregon’s Jobs Plus--the descendant program of that 1990 ballot measure--as an example of what every state should do with its new authority.

“If we expect all these folks who are able-bodied to work . . . the most obvious thing [states] should all do is . . . what Oregon has started to do,” Clinton said. “Now that’s the sort of thing I’m talking about.”

The Jobs Plus program provides any employer who hires from the welfare rolls that person’s assistance and food stamp checks for six months.

Dan Martin, owner of Martin’s Appliance store in Salem, used the program to increase his repair staff from 13 to 15. “It has helped me take totally untrained people and have some help in the cost of training them,” he said.

Oregon’s Jobs Plus program is actually a tiny part of its welfare overhaul. It was only recently expanded statewide after operating as a six-county pilot project since 1994.

As of last June, 199 welfare recipients were working in the Jobs Plus program for 176 employers. In comparison, Oregon’s revamped welfare offices placed 22,490 recipients in non-subsidized jobs during the year that ended this June.

The caseload for Oregon’s equivalent of the federal Aid to Families With Dependent Children program is 31,851.

That would place it about eighth among California counties and their welfare populations. Unlike California, Oregon also has fewer multi-generation welfare cases and a much smaller immigrant population.

But California ranks 49th on the federal list of caseload reductions in the last four years. And as a laboratory control group, national experts say Oregon has proved that some welfare reform theories can work.

Oregon, for example, has not seen a conflict between labor unions and welfare job seekers--one concern that has been raised in California hearings.

Oregon officials said they sought to avoid such problems by asking labor representatives to help design their programs. Labor won a modification in the Jobs Plus program that limited the welfare workers to new assignments, not existing positions.

Also in Oregon, a recent study found that 86% of the state’s job placements had not returned to the welfare rolls after 18 months. It also reported an average salary of $6.22 per hour--enough for a single parent and two children to live at 127% of the federal poverty level.

“Oregon is one of the first states to understand that if welfare reform is going to work, it is going to be with the active support and complicity of the business community,” said Will Marshall, an analyst at the Democratic Leadership Council’s Progressive Policy Institute in Washington. “I just think they have a brilliant approach. . . . We have always pointed to the Oregon example as typifying this work-first philosophy.”

That was not the first vision when Oregon officials--and most other states--faced skyrocketing welfare caseloads in the late 1980s.

Oregon officials initially focused on preparing welfare recipients for the work force with two years of college education. They hoped that schooling would mean more lucrative employment and a better chance of not returning to welfare.

But to the surprise of the state’s top welfare directors, the plan failed. A study found that the jobs obtained after extensive education were not much better than other welfare job placements. The education route was also three times as expensive and there was a high dropout rate.

“I came out of Legal Aid . . . with a bias that this was the way to go,” said Sandie Hoback, director of Oregon’s Human Resources Department. “We had to . . . adjust our own thinking around what really works for women and children in poverty versus what might work for more of a middle-class mentality.”

The experience provided two important lessons. First, Oregon officials say the longer people spend on welfare--even for training--the harder it is to get them off. Second, the best training for a job is a job.

Those lessons were the basis for a major overhaul and retraining of every employee in the state’s welfare system.

Before the change, a welfare caseworker was largely assigned to determine eligibility. New welfare applicants were asked for a series of documents--rent receipts, bank statements, identification and other papers. When appropriate, they were issued a check.

Now, caseworkers say they recite three questions over and over: Where are you now? Where do you want to be? What will it take to get you there?

One of the major costs to get Oregon’s welfare reform operating was a significant increase in support services such as child care, medical coverage, drug or alcohol treatment and transportation.

Today, the average cost for child care in Oregon is $626 a month. Based on a sliding scale, a welfare recipient earning $5.50 per hour must contribute $71 of that amount and the state pays $555.

In 1991, Oregon budgeted $10 million for subsidized day care. Next year, the governor’s budget proposes more than $100 million for the same account.

That’s a sign of success, Oregon officials say. Now, because of the reduction in welfare cases, the increased cost for services like child care is more than offset by savings.

“Literally, we are now thriving on less money,” said Jim Neely, deputy director of Oregon’s Human Resources Department. “We are heading into . . . the governor’s proposed budget having substantially reduced our total fund commitment to all our welfare programs--even with child care growing substantially, food stamps going up and medical still going up--because of our success.”

Oregon officials are convinced that their efforts would have failed without the initial investment to expand welfare support services such as child care and medical coverage.

If the most common excuses for avoiding work were addressed, they reasoned they could be tougher on work requirements.

Today, a new welfare mother in Oregon must begin a four-week work training program within three months of giving birth. Also, recipients who do not cooperate with the job search requirements can lose their welfare payments in four months. The payments are reinstated if cooperation resumes.

Oregon officials hope that the work requirements will shake off those who are not truly needy and are able to find resources elsewhere. They are critical of penalties in other states that--they believe--might hurt well-intentioned recipients.

They complain about a plan adopted in California and elsewhere that would prohibit additional welfare money going to a recipient who gives birth while receiving assistance.

Oregon officials also decided that in some cases they will continue assistance beyond the two- and five-year time limits outlined in the new federal law. The officials said they consider participation in their job search program as satisfying federal work requirements.

Finally, they have given substantial discretion to their caseworkers. In situations where a child might be harmed by placing a parent on sanctions, the social worker has the authority to exempt the case from normal rules.

“This is not a punitive, throw-people-off-welfare policy,” said Democratic Gov. John Kitzhaber, the ex-physician who previously drew national attention for a plan to expand health care coverage by rationing treatment. “This is about helping people escape from poverty.”