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Roundtable
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Welfare: Where Do We Go From Here?

Round Two -- Concluding Remarks
Posted March 25, 1997

JASON TURNER

Elara, the online reader who was employed as an income-assistance worker, made interesting comments to this forum. She said that she has had experience with large numbers of recipients whom she does not believe were taking any constructive steps to help themselves. In Wisconsin we frequently hear similar caseworker comments and accordingly have designed our new system (Wisconsin Works) around requirements that participants receive income only through work.

These caseworker experiences also suggest a general truth about debates among welfare professionals. It is almost impossible to work close to the front lines in this business and sustain the illusion that welfare dependency and associated social problems are primarily the result of economic limitations related to available work and income opportunities, as Peter Edelman and Sheldon Danziger seem to believe.

David Whitman offers penetrating and challenging questions to all the panelists. He asks me whether I expect the new welfare law to increase or decrease child poverty and out-of-wedlock childbearing. Taking poverty first, the new law will result in significantly more welfare parents accepting available employment, because of the time limits and work requirements. As evidence, take Wisconsin's "two years and off" experiment, which we ran in two counties until recently. The caseload declined forty percent within the first nine months after time limits were announced and recipients were called in to meet with their caseworkers.

Moving to how this increase in work is likely to affect poverty levels, consider the following: All families relying on welfare are by definition in poverty, whereas virtually all families with a full-time breadwinner earning only minimum wage are out of poverty, if one counts just wages, food stamps, and the earned-income tax credit (this, despite Edelman's protest that "we need to keep working a lot harder on the idea that if you work at a full-time job you shouldn't end up being poor"). Therefore the new law must (and will) reduce the numbers of those living below the poverty line.

As for the new law's likely effect on illegitimacy, this can only be inferred. For us to know whether illegitimacy drops as a result of the new law we must 1) have evidence that incentives in the current welfare system contribute to illegitimacy, 2) show that the new law reduces or eliminates these incentives, and 3) anticipate whether welfare recipients will act on the revised incentives.

Of these three necessary parts I believe we can address the first with a high degree of certitude. Spending time with caseworkers, as I do, leaves no doubt that recipients regulate their childbearing in explicit response to the welfare system's incentives. For example, in Wisconsin we have imposed high job-participation requirements as a condition of receiving AFDC benefits. Some individuals have been exempt from participating for various reasons, including having an infant. We recently sent out notices to more than 300 parents of infants in Milwaukee, telling them that they are no longer exempt and must come in for an interview with a caseworker. At least two of these parents told their caseworkers that they had then proceeded to get pregnant in the (mistaken) belief that doing so would enable them to retain their exemption from work.

The second necessary question is, Will the new law change the incentives in a significant way? I think so -- the family cap (giving states the ability to pay no additional benefits for additional children) is an important change, and the new requirement that so many parents must participate in work activities will reduce the leisure benefits that currently come from having additional children.

Will parents act in large numbers on the new incentives, reducing out-of-wedlock births? I don't know for sure. But I would predict that the new system will have a significant effect on reducing the number of children born to unwed women in the system, while having only a small effect on the underlying marriage rate of these same women.

Whitman asks whether I would be troubled by an increase in child-poverty, if that were the effect of the new law. Since all non-working welfare families are now in poverty, to accept the notion that poverty might go up one would have to believe that the new law will result in fewer working AFDC families than at present -- an outcome, given the provisions of the new law, that is unlikely in the extreme.

But leaving that aside, if the new law were to decrease family income while increasing the proportion of income earned by family heads, this would be a tradeoff I would accept, within certain limits. I believe that in a rich country like ours, where we have the basic necessities of life taken care of, children's health and well-being are best when families are headed by a working parent.

Finally, Whitman points out that the new law does not set aside money for work slots, and asks whether I think a set-aside is necessary. I do not think this is necessary, as it is important for all parents both inside and outside the system to perceive that the only way for them to obtain income is through work, in a government-created job if necessary. This affects their behaviors in ongoing and constructive ways. The new law, while not setting aside specific amounts, provides money for states to set up work slots as they see fit in response to the aggressive participation standards contained in the law.

This law is a good one, and it will work. You will see!



Roundtable Overview



Introduction and opening questions by Jack Beatty

Round One -- Posted March 12, 1997

Round Two -- Posted March 25, 1997

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