California’s Welfare Rolls Shrinking at Record Pace

Nudged into jobs by a vibrant economy and new work programs, California’s poor have been leaving public assistance in record numbers, plunging welfare rolls into the longest sustained decline in the state’s history.

In a 10-month period, the number of families on welfare has dropped by more than 100,000, or 12%, as counties report increasing success at moving recipients into the work force. Officials say the state savings amount to $54 million a month.

Every county, including those with double-digit unemployment, showed steady decreases in the welfare rolls, while ones with booming economies, such as Santa Clara and San Mateo, reported drops of nearly 25%.

Powered by the economic engine of this region, Orange County’s welfare rolls decreased by 17%--or 5,503 cases--putting the county well ahead of the state average.

“This continues and remains the only extended caseload reduction we have ever had,” said Bruce Smith, principal economist for the California Department of Finance. “The last time we had a reduction in cases was in 1979, and it lasted only a short time.”

Smith saw two dominant reasons for the prolonged plunge: a resurgent economy and a new work-first culture in welfare departments that has pushed recipients into the job market.

A third of the decline, he said, was attributed to Los Angeles County, which had a 10.9% drop and helped drive down the statewide numbers. More than a quarter of a million families are on the county’s rolls.

“Los Angeles County has a tonnage problem. It’s got more welfare recipients than most states,” he said. “In the last three years, the caseload [there] is down by 53,000. That’s a big number.”

Los Angeles County research director Paul Fast said recipients have been moving into jobs at a rate of about 4,000 a month.

“We’ve been working very hard to get people to work, and the economy is being very, very helpful,” he said. “The unemployment rate in Los Angeles is now back to the pre-recession level.” The rate in June was 6.3%.

In Orange County, the situation is even brighter. An unemployment rate of 3% rivals that of economic powerhouse Santa Clara County, home to Silicon Valley. A bustling economy created 43,100 jobs since June 1997. And the county’s current caseload of 26,572 in May puts it at its lowest level since December 1990.

“We’ve seen a more dramatic decrease [in the caseload] than the state as a whole because we’re an economic engine,” said Larry Leaman, director of the county’s social services agency.

What’s less clear is exactly where the 17% who have left the rolls are going.

About 10% of those who leave--such as Vietnamese refugee Lanh Van Le, 48--simply land good-paying jobs that make them ineligible for aid; they are the clear success stories.

A former soldier who spent six years in re-education camps in Vietnam, Le arrived in 1995 with his wife and three children. He spent eight months on welfare and then got a job at a garment factory. But he got laid off and ended back on government assistance.

Seven months ago, he found a job with Spectrum, a Laguna Hills company that manufactures medical and laboratory equipment. Now he, his wife and his oldest son have full-time jobs.

“We depended on welfare, but it helped us take the first step,” he said. “We are very thankful for that, but now we can make it on our own.”

Unfortunately, the other 90% of the caseload simply drop out without contacting the agency, said Angelo Doti, director of Family Self-Sufficiency, a new division of the county welfare office. “We don’t know why they’ve left.”

Welfare officials speculate a variety of factors are involved in the steep decline, including the possibility that some were already working side jobs while on welfare, that some simply left the rolls out of fear of being pushed out later, and that some have concluded that getting jobs on their own was easier than meeting local work requirements for eligibility.

For the time being, with a hot economy, “anyone who wants a job can find one,” said Pat Stuteville, welfare supervisor at the Anaheim office.

The more interesting question is what will happen when the economy goes “belly up,” said Bill Gayk, director of Cal State Fullerton’s Center for Demographic Research, who is tracking the relationship between reforms and the economy.

“You can look at the drop in the welfare rate and the initial reaction is, ‘Gosh, the program is working.’ But then you realize the economy is driving the bulk of it right now, so what happens when that changes?” he said.

California welfare rolls hit their peak in 1995, with nearly 1 million families on public assistance. In 1996, when the federal government mandated welfare reforms, the rolls slowly began to shrink. Then they took a sudden nose dive in the summer of 1997 as the Legislature adopted a state reform plan to be implemented by the counties.

Some economists initially theorized that the precipitous drop might only be a temporary blip caused by the publicity surrounding the reforms. But even after public discussion of welfare reform died down, the decline continued. The rolls dropped 12.2% from July 1997 through April 1998, the last month statewide figures are available from the Department of Social Services.

Even so, the pace of California’s welfare decline is slower than the rest of the nation, which Smith said is not surprising.

With a welfare caseload that is bigger than the population of some states, the sheer numbers of people who had to be moved into jobs made welfare reform more daunting for California, he said. And the state did not formally begin to implement its reform plan until January, which was at least a year later than most other states.

“What is encouraging, though,” he said, “is that very large numbers of people are continuing to leave welfare even in counties that are experiencing high ongoing unemployment.”

But many experts warn that plummeting rolls should not be the only measure of success for welfare reform. They point out that it is too soon to know what is really happening to families because a system for tracking them after welfare is still in the planning stages.

“Until we know what’s happening to these people and whether or not their ability to leave the rolls means they’ve become more self-sufficient and their children are better off, it’s hard to use caseload decline as the sole factor of success,” said Frank Mecca, executive director of the County Welfare Directors Assn. of California.

In Orange County, community-based and faith-based organizations report seeing more people in search of emergency aid, in the form of food or financial assistance.

“We are seeing an increasing amount of people seeking services, and we’re having to turn away more people,” said Ann Truxaw, Catholic Charities’ director of resource development. But she cautioned that it’s too early to gauge whether the numbers are directly related to welfare reform.

Gwendolyn Mink, professor of politics at UC Santa Cruz and author of the book “Welfare’s End,” echoed a widespread concern that welfare recipients who land in low-paying and relatively short-term jobs will be returning to the rolls in the months and years ahead.

“If the point of welfare reform was to diminish the rolls, then at least for today we can say welfare reform has worked,” she said. “But if the point of welfare reform was to improve the prospects of poor people, then I don’t see a reason to be particularly sanguine.”

County welfare officials, however, say it is clear that more recipients are moving into jobs than in the past, and their analysis is backed up by a recent study by the General Accounting Office, an arm of Congress. The GAO reported that California more than doubled the job placement rate for welfare recipients from 1996 to 1997.

Each county has handled welfare reform in a slightly different way, although each is required to impose standard time limits on welfare benefits and sanctions on recipients who fail to meet work requirements, and to move increasing numbers of recipients into jobs.

With its heavy emphasis on fraud detection, San Diego County has experienced steep declines in its rolls. But so has Santa Clara County, which has developed a long menu of services to help its recipients move off welfare.

Officials in both counties say they do have one important factor in common: They anticipated welfare reforms and began taking steps to comply long before either the state or federal governments made reforms mandatory.

“This county has always been pushing work and welfare reform, and I think we’re really seeing the results now,” said Joan Zinser, deputy director of San Diego’s welfare system. “Right after the welfare reform law passed . . . we started being much more aggressive about the work-first message.”

Alette Lundeberg, director of welfare-to-work programs in Santa Clara County, said that in her county, even recipients with limited English language skills are finding work.

But she said there is some evidence that the rapid welfare decline might not continue much longer, as the easiest to employ move off the rolls, leaving only the hard-core.

“In my opinion we’re about to reach the hard-to-serve,” she said. “These are people who have a rainbow of barriers: alcohol, drug and mental problems.”

If the rolls shrink further, Mecca said, it won’t be long before counties throughout the state will be left with recipients who have a long-term dependency on welfare and no job skills or work experience.

“That will be the real challenge of welfare reform,” he said.

Times staff writer Tini Tran contributed to this report.