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The Great American Welfare Lab

Wisconsin has cut its rolls by half. Many former recipients are working, but where have the rest of them gone?

By Adam Cohen/Milwaukee

TIME magazine

(TIME, April 21) -- Something startling has been happening every day at the Department of Human Services building at 12th and Vliet in downtown Milwaukee. Large numbers of poor people who qualify for welfare grants are deciding they don't want them. Under Wisconsin's welfare reforms, new applicants are told they will need to put in 60 hours looking for a job before they can receive their first check and that to stay on the rolls they will need to perform 30 to 35 hours of work assignments a week. "We probably get an average of one or two people a day who stand up and walk out at that point, saying, 'Forget it, you can keep it,'" says David Liners, until recently the office's supervisor. By the time all the new conditions are explained to them, almost one-third leave without signing up for welfare at all. "Many people decide when they hear about all the strings attached that they want to give work another shot," he says.

Welfare experts call it "diversion"--turning people off welfare before they get on--and it has been one of the centerpieces of Wisconsin's ambitious welfare reforms. The new rules, which include perhaps the toughest work requirements of any state, have produced dramatic results. Welfare cases have fallen more than 55% in the past decade, the steepest drop in the nation, and almost a third of the state's counties have cut their rolls 80% or more. But if Wisconsin is leading the nation in welfare reform, it has also become ground zero in a fiercely partisan debate over who is helped and who is hurt by the changes. The right-leaning Heritage Foundation recently issued a report titled "Wisconsin's Welfare Miracle," whose author, Robert Rector, argues that the reforms have been so effective that they have rewritten the rules of welfare policy permanently. Wisconsin's advocates for the poor, for their part, contend the reforms have pushed many indigent people, particularly children, deeper into poverty.

At the heart of the debate is a central question: Where have they gone, the 55% of families that have left Wisconsin's welfare rolls? Welfare officials say the vast majority are gainfully employed in the private sector. Critics contend that many of the missing families do not have jobs and that a good number are ending up in homeless shelters. The debate thrives because the reforms are still in their early stages, and because neither side has conducted a rigorous study to find out what happens to families after they leave the rolls. The incomplete evidence at hand suggests that the new rules are, for the most part, a success, accomplishing their overall goal of moving poor people into the private work force. But the sweeping changes are also having a variety of unintended consequences, both good and bad.

The driving force behind the reforms, which are in a transitional phase, is a nearly universal requirement that recipients work for their benefits. Under the new rules, welfare offices first attempt to divert applicants by requiring them to make a private-sector job search, and barring benefits to anyone who turns down a job. If applicants are approved for welfare, they are required to earn their benefits through a work assignment, or a "transitional" placement for those unable to perform regular work. Welfare checks are reduced for every hour missed. Mothers must go back to work when their youngest child is 12 weeks old. The effect of the reforms is to turn welfare, once a relatively no-strings source of income, into a low-paying job. "They have put a cost onto receiving welfare," says the Heritage Foundation's senior welfare analyst Rector. "That makes welfare less desirable, and fewer people are taking it." A further inducement to work: the new rules include a five-year lifetime limit on benefits. Many applicants redouble their efforts to find work when they learn of the limit, Liners says, because they want to save their five years of eligibility until they really need it.

Missing Faces In The Private Sector?

The state estimates that fully three-quarters of the missing caseload is now employed in private jobs. While that is a soft number that may err on the high side, there is anecdotal evidence that a significant portion of Wisconsin's welfare families have indeed found work. Welfare recipients who successfully make the transition to private-sector jobs are the missing faces of welfare reform; few want to dwell publicly on their former status. But the roster at the New Hope Project, a Milwaukee jobs program working with poor residents of two inner-city zip codes, is full of lives turned around. New Hope, which works with poor people on and off welfare and adds some incentives the state does not, has seen almost 60% of its participants move into full-time jobs. Among its proudest successes are former welfare recipients like Beronica Garcia, who spent two years on the rolls before leaving for a receptionist job with the Wisconsin Correctional Service. "It makes me a better role model for my five-year-old son," she says. "And I enjoy coming to work." Individual welfare workers, like the staff in rural Marquette County, also talk of personally directing applicants to available jobs rather than signing them up for welfare--a process made easier by the fact that Wisconsin has an unemployment rate of only 3.5%.

However, many of the families gone from the rolls fit into different profiles. Perhaps as much as 15% of Wisconsin's pre-reform welfare population were working in jobs they kept secret from welfare bureaucrats, says John Pawasarat, a welfare researcher at the University of Wisconsin at Milwaukee. When work requirements began, many probably had to leave the rolls because they couldn't show up for their new welfare work assignments while continuing at their unreported jobs. This is a group that does not fit neatly into any side's account of welfare reform. These people are committing fraud, even if the end result for some is still a barely livable income, so welfare advocates do not like to talk about them. But they also cannot be counted as newly entering the private work force. If these nonreporting workers were in fact 15% of the pre-reform rolls, they could account for a substantial part of the missing welfare caseload.

Other welfare recipients gone from the rolls have decided to "double up," moving in with family or friends, rather than work for their benefits. "Many families rely on a quiltwork of sources of income," says Pawasarat. "Uncle Joe might get disability, mother might get Social Security, someone else in the family might get public housing, child support or foster care, or have earned income." Should society be encouraging doubling up? That's a point of debate: critics see it as forcing already poor families to scrape by with even less money, while others say it is a rational choice by people who would rather turn to their personal network for support than earn a living. But it is undoubtedly another fraction of the 55% who have left Wisconsin welfare but not turned up in the workplace.

Welfare or Work: Messing Up Has Consequences

Another significant part of the reduction in welfare payments and caseload is the result of "sanctions," or penalties, for not meeting work requirements. A University of Wisconsin study found that in a five-month period, on average, more than 10% of the state welfare caseload was being sanctioned at any given time. Some families that are sanctioned lose their benefits entirely. Welfare officials say this is how the system should work: messing up on welfare has consequences, just as it does on the job. "We are trying to introduce the real world into the welfare system, and part of the real world is rewards and punishments," says welfare program spokesman David Blaska. Supporters of the reforms say that without punishment in the form of reduced benefits, welfare recipients will never learn the self-determination they need to make the most of themselves.

But lawyers for the poor say sanctions, which can be imposed for minor violations like missing appointments or failing to respond to notices, often result from the welfare system's own mistakes and computer errors. Alesha Nicholson, a former welfare recipient who now works for an advocacy group called Welfare Warriors, says her welfare and food stamps were cut off in December and January when her welfare office could not locate her "monthly reports," the paperwork she submitted certifying she had not earned any income that month. Nicholson, who was reduced to getting groceries from food pantries and feared being evicted, had to send her three-year-old daughter to stay with an aunt in Arkansas. Erroneous sanctions are so common that Legal Action of Wisconsin is winning 90% of its appeals, says staff attorney Pat DeLessio.

Even sanctions imposed according to the rules present the troubling prospect of an entire family's livelihood being withheld because of a parent's failure to perform--necessary if the work rules are to have real teeth, perhaps, but undeniably harsh. Stacey Green, a Milwaukee mother, concedes that she "missed appointments" with welfare officials. And she admits that when she was assigned to a skills-training program that consisted of stacking game pieces into neat piles, which were then emptied into a bin to be stacked all over again, she left early because it "was a waste of my time." The sanctions imposed for her lapses caused her to fall $300 behind in rent, and a disagreement with her landlord over back rent put her and her three children in a downtown Milwaukee shelter for the homeless earlier this year. Supporters of the reforms might argue that Green's difficulties taught her a much-needed lesson in personal responsibility. But even if they did, this was a lesson that came at a cost: along the way, Green and her children became homeless. The Green family's experience with sanctions is a reminder that even when welfare reform works well, it does not work painlessly.

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