Welfare Reform Offers Paradox

It was touted nationwide as bold reform with bold results: Wisconsin insisted everyone on welfare must work, and cash aid to the needy plunged.

More than 25,000 adults were on welfare the month before reforms kicked in. Three and a half years later, fewer than 6,700 were on the rolls--all “earning” their aid by working community-service jobs or studying for high school diplomas or attending drug abuse counseling. The success won then-Gov. Tommy G. Thompson a top job in the Bush administration.

But as the acclaim built, critics warned that trouble loomed. Just wait, they said, until a recession hits--until the uneducated, unskilled workers pushed off welfare lose the part-time, minimum-wage jobs they have scrounged. Just wait until they look to the state for a safety net and find it’s no longer there.

Well, the recession has arrived, and Wisconsin’s vaunted welfare program is facing its toughest test.

The caseload has climbed for eight straight months. The number of people receiving cash aid is up 25% since February. Demand for food stamps has soared. And every month, scores of welfare recipients crash into Wisconsin’s deadlines: a two-year limit on state-subsidized community service jobs and a five-year limit on cash benefits.

In theory, most folks should be ready to fend for themselves long before they hit the deadlines. But advocates for the needy complain that welfare agencies do a poor job of helping people overcome the barriers, such as domestic violence and drug addiction, that keep them from steady work. A state audit last spring found that just 6% of welfare recipients received mental health counseling and fewer than 3% were treated for substance abuse. State officials say they’re working on screening tools to better identify those who need help.

Meanwhile, for thousands, the clock keeps ticking, pushing them closer to the moment when they will be cut loose from state aid.

And finding jobs in this economy can be tough, even for those with no significant barriers. One university study found seven job-seekers for every position open in Milwaukee’s urban core. Manufacturing jobs have been cut by the thousands in recent months. And more than 75% of the positions that are available are beyond the reach of most welfare recipients, requiring advanced education or specific experience.

So how has Wisconsin’s welfare system met the challenge?

Fairly well, or dismally--depending on whom you ask.

Mary Rowin, deputy administrator of the state Department of Workforce Development, has an optimistic take: “Right now, we think things are going fine.”

Amy Stear, a labor activist, is dour: “Right now, every [failing of the system] is exposed because of the economy.”

Both women are right. The Wisconsin welfare program is riding out the recession just as it rode through the good times: helping some families into proud self-sufficiency and casting others out with no way to pay the rent.

The worst off, ironically, may be those who succeeded in boosting themselves off welfare during the first years of reform.

The jobs they found--in hotels and restaurants, on assembly lines and in machine shops--were among the first to go as the economy contracted. Yet if they try to return to the welfare system, Wisconsin classifies them as “job ready.” That means they have the skills to hold down regular work, so the state won’t let them “earn” a welfare check with community service, training or education.

They are eligible for food stamps, free health insurance, generous child-care subsidies, even loans for car repairs. They can get help writing a resume and checking for job openings online. But they cannot get cash aid to pay the landlord and keep the heat on.

Counselors are supposed to reevaluate “job ready” cases in 60 days; if applicants are still unemployed, they may be moved into a community service post, such as cleaning city parks, to earn a welfare check. With the job market so tight, state officials recently ordered the evaluation to be held in 30 days. Yet there is no guarantee that a community-service job will be offered. And even if one is, it takes a month or more for the first full check to arrive.

“People need to understand it’s a real world out there. If you’re not working, you’re not getting any money,” said state Rep. John Gard, who helped craft the welfare rules.

Advocates for the poor, however, spin horror stories of clients evicted because they had the bad fortune to be deemed capable of working when there was no work to be had.

Tracy Jones, 34, was among the many classified as “job ready” and denied a welfare check, although she could not find work after losing her position in a furniture factory.

For three months, Jones had no income. She and her 14-year-old son ate canned goods from food pantries and washed their clothes by hand because they could not afford the Laundromat. She kept a roof over her head only by asking her relatives for handouts and her landlord for patience. Then her apartment building caught fire. That turned out to be a stroke of luck: She reapplied for welfare and the agency took her as an emergency case, giving her cash aid and training as a forklift operator.

Jones now works at the 9 to 5 Poverty Network Initiative, helping less fortunate women.

There are many.

Homeless shelters in Milwaukee are so crowded, they’re turning people away. By last week, even the “overflow shelter”--a last-resort backup when all other bunks are filled--was packed to capacity. An emergency task force convened two days after Christmas to try to find beds for the overflow’s overflow.

Food banks too report a surge in demand. “The ones who have been calling lately say, ‘Whatever you have in your pantry, we’ll take.’ ” said Lillie Crouthers of New Light Baptist Church in one of the city’s roughest neighborhoods. In nearly a decade of handing out food, Crouthers said, she’s never seen such desperation.

“It’s like everyone is turning their back on [the poor] and saying: ‘Tough luck,’ ” agreed Jean Verber, who lobbies for policy changes on behalf of impoverished women.

But Wisconsin’s welfare system is not all hard edges.

“It’s simultaneously the most severe and the most generous program in the nation,” said Lawrence Mead, a public policy professor at New York University who is writing a book on the Wisconsin reforms. He sees the system’s balance as assurance the state will not abandon the needy: “They are prepared . . . to deal with the recession.”

And there are success stories.

Take the case of Tina Orth, a 25-year-old single mother. When she was fired from a clerical job for poor attendance last summer, the system came through for her.

Orth was homeless and broke when she applied for aid. The state gave her $1,000 to cover the security deposit and first month’s rent on an apartment. Her case manager enrolled Orth in a two-week motivational class to prepare her to hold down a steady job. Then she received eight weeks of training in her chosen field, human resources, plus help writing a resume.

Participating in these courses earned her a welfare check of $673 a month. It also helped land her a full-time job. Just before Christmas, Orth started as assistant manager of a store in a mall, earning $7.75 an hour. And while she said she has problems, such as depression, that the welfare agency has not helped her resolve, she’s proud to have made it this far. “It feels fulfilling to have a job.”

Time limits are supposed to be a hallmark of welfare reform nationwide; the five-year limit on cash benefits is federal law. Yet in the face of the recession, state after state has relaxed its deadlines. Washington Gov. Gary Locke recently extended benefits for 96% of the families coming up on their last check. New York has set up a safety net to catch those who can’t find work by the deadline. Virginia will automatically extend benefits for anyone in a county where the jobless rate tops 10%.

The numbers seem to indicate that Wisconsin has been generous too: Through mid-November, all 431 people who had requested more time in training or community service had received extensions. And 14 of the first 20 to request an extension of the five-year time limit got it.

But there’s a catch. Most people who hit time limits in Wisconsin don’t get to appeal to the state for an extension. Instead, they are told by their case managers that they are not eligible even to ask.

In one area of Milwaukee, 188 people reached a time limit this fall. More than half were told they could not get an extension because “the labor market has jobs.” Others were turned away because case managers judged them uncooperative or said they had “no significant barriers” to working. Only 27 were allowed to ask for extra time.

Advocacy groups say the numbers are similar across the city. And they are outraged.

The unemployment rate in Milwaukee jumped to 7.6% in October, up from 5.8% a year ago. “It’s very scarce out there,” laid-off welder Walter Goins said after months of searching. A peek at the state job bank shows how slim the pickings are. Under the food-service category one recent week, there were just seven openings in the whole city, all paying below minimum wage, with tips supposed to make up the difference. In such a pinched economy, advocates ask, how can the state cut people loose?

“You can’t just say, ‘There’s nothing for you, there’s no money, figure it out yourself,’ ” Stear said.

Yet Gard insisted that Wisconsin has the responsibility to do exactly that. Those pushed out of the system still get food stamps, health insurance and child care. Giving them cash too, he argued, would just make them lazy.

Roderick Ritcherson, an executive at one of the private agencies that runs the welfare system in Milwaukee, agreed.

“If someone is honestly trying, the last thing we want to do is cut them off,” he said. But Wisconsin’s program makes the assumption that those who honestly try will make it. “If someone is not trying,” Ritcherson said, “in all fairness to the taxpayers, the state should not be subsidizing that person.”