reprinted from Michigan Today, Winter 2003

An interview with Professor Sheldon H. Danziger
Co-Director, National Poverty Center
Henry J. Meyer Distinguished University Professor of Public Policy,
University of Michigan

A substantial percentage of single mothers are working today as a result of the 1996 welfare reform. Prior to 1996, single mothers were entitled to receive cash assistance; now they are expected to move quickly from welfare into the labor market. However, the current system has little flexibility to deal with people who want to work, are out looking for work, but who can't find work.

If the new work-oriented welfare system is going to be effective, there must be a way for single mothers to support their families. This is most evident when the economy is in a recession. Because it is more difficult to find work and because the welfare system still expects people to work as much as they did during the boom, more attention needs to be paid to the following kinds of policies:

• providing access to work-for-welfare jobs of last resort, or
• changing the unemployment insurance system to make it easier for people with part-time and sporadic work histories to qualify for unemployment insurance, or
• granting exceptions to welfare's five-year limit on benefits during recessions.

If government is no longer going to provide welfare recipients with a monthly check, then a system needs to be in place whereby people who cannot find an employer to hire them can work for their welfare. The work-oriented welfare reform of 1996 has increased the personal responsibility of recipients to search for work but reduced government's responsibility to help even those who are willing to work but are unable to find jobs.

I'm addressing these issues with Prof. Sandra Danziger in a book tentatively titled After Welfare Reform: Toward a Work-based Safety Net.

After the 1996 welfare reform and up to the 2001 recessions, incomes rose for single-mother families with children, and poverty fell. However, most working former welfare recipients earned less than $15,000 a year. It is not the case that people are going from being very poor welfare recipients to being comfortable middle-class workers. They're going from being very poor welfare recipients to being poor and near-poor workers. The poverty rate remains very high even among women who have successfully left welfare to work and get subsidized childcare and the earned income tax credit.

In a study being conducted by the Michigan Program on Poverty and Social Welfare Policy, women who were still on welfare had a poverty rate of about 80 percent in 1998, whereas women who had successfully left welfare for work had a poverty rate of 50 percent. While it does pay now to move from welfare to work, 50 percent is a very high poverty rate.

The provision of public jobs of last resort is just one policy that is needed if we are to have an effective work-based safety net. Another important policy change would be to devote more attention to identifying some of the problems that keep people from working steadily. For example, many recipients have underlying health and mental health problems that make it difficult to get and keep jobs. Often the welfare office is not aware of the extent of these and other problems, such as learning disabilities and low reading scores. The welfare-to-work programs that operate in most states do not devote enough time to assessing and screening clients and offering services that might address such problems and increase their employment prospects.

At any one time in the first five years after welfare reform, about two-thirds to three-fourths of the women who left welfare were working. The good news is that more single mothers were working than most policy analysts thought was possible. The bad news is that in any month about a quarter to a third of the women who left welfare were not working. In other words, welfare receipt has declined even more than work has increased. That means some people aren't getting either welfare or work and have great difficulty making ends meet.

Clearly, some people are worse off under the new welfare system than they were under the old system, especially if they have health and mental health problems that the current system doesn't treat effectively. Yet, there are some women who have moved into good jobs and are better off. Politicians and the media have tended to focus more on the success stories than on those who are falling between the cracks in the new system.