Without a Safety Net

Welfare reform was supposed to free poor mothers from dependency and get them into the job market. But what happens when the jobs are gone?

Just four years ago, Kimberly Hill was a poster child for welfare reform.

A tall, strikingly attractive mother of two, she had been on welfare off and on for several years until, in 1995, a caseworker urged her to get computer training. Her first job -- for which she rated a mention in a 1998 San Francisco Chronicle story titled "Firms Find Talent Among Disabled, Welfare Recipients" -- was no prize. "People knew I was off welfare," she told us, "and they treated me like I had the plague." Hired as an administrative assistant, she found herself being asked to clean the rest room. She got luckier with her next job, at a staffing agency, where, after a series of promotions, she was earning $65,000 a year. Then, on December 20, 2001, just as the recession became official, she was laid off.

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Hill meets us at Starbucks because she doesn't think the neighborhood where she lives is a good place for us to be wandering around. She is confident and direct, but admits to feeling the stress of being out of work. She has found one part-time office job and is about to add another, but neither offers health insurance. We ask if she would go back on welfare if things got bad enough. "No," she says, thrusting her chin out for emphasis. "It's too horrible, a horrible experience -- demeaning."

Beverly Ransom was another welfare-to-work success story. We met her in Miami's Liberty City -- site of the 1980 riot -- at the storefront office of Low Income Families Fighting Together, a community organization that works for welfare rights and affordable housing. A bright-eyed, straight-backed woman of 50, with gray hair pulled back into a small ponytail, she speaks with pride about the catering job she found after years on welfare. But lately the work has fallen off; the catering companies that used to give her more work than she could handle just haven't been calling anymore. "Catering is based on tourism," she says. "Last year at this time I had so much work I had to beg for days off. Now I need food stamps." She gets $118 a week from unemployment insurance, but rent for herself and her children, who are 12 and 14, is $500 a month. Her biggest fear is that she'll end up in a shelter: "What do I do? My kids are at an age where they would be traumatized."

In 1996, when welfare reform was enacted, a recession seemed about as likely as the destruction of the World Trade Center by a handful of men armed with box cutters. The assumptions behind welfare reform were, one, that a job could lift a family out of poverty and, two, that there would always be enough jobs for anyone plucky enough to go out and land one. The first assumption was shaky from the start; women leaving welfare ended up earning an average of less than $8 an hour, hardly enough to support a family. Now the second assumption has crumbled as well: More than 2 million people lost their jobs last year, and single mothers have been especially hard hit. According to the Federal Bureau of Labor Statistics, the employment rate of women who head families fell far more sharply last fall than overall employment, by three percentage points in just three months.

There is, of course, a venerable New Deal program to protect laid-off workers -- unemployment insurance -- but it is, perversely enough, designed to offer the least help to those who need it the most. People in temporary, part-time, or very low-wage jobs -- the kind most often available to someone leaving welfare -- often don't qualify for benefits. According to the Economic Policy Institute, about 70 percent of former welfare recipients who have lost their jobs during the current recession are not eligible for unemployment.

In the past, poor single mothers had their own form of unemployment insurance -- welfare. Contrary to the stereotype, most welfare recipients worked, at least intermittently, falling back on public assistance when a child got sick or a car broke down. But in their zeal to save the poor from their supposed sins of laziness, irresponsibility, and promiscuity, the reformers entirely overlooked the role of welfare as a safety net for working mothers. Temporary Aid to Needy Families (TANF), which is what the new version of welfare is called, has just one aim: to push the poor into the job market to become "self-sufficient." Whatever sense this made in the boom years when welfare reform was devised, it makes none now. As a poster at an East Harlem community organization put it, the acronym has come to stand for "Torture and Abuse of Needy Families."

Of course, pre-reform welfare was never adequate: Grants were low (an average of $550 a month nationwide), and recipients were routinely hassled and humiliated by the bureaucracy. Still, under the old system, if you were demonstrably poor and had children to support, you were entitled to cash assistance. The new system, legislated in 1996 with the passage of the Personal Responsibility and Work Opportunity Reconciliation Act, ended that entitlement. The law set strict time limits on assistance (no more than five years in a lifetime for most people), encouraged private companies to bid on contracts to administer welfare, and gave states wide discretion to cut people from the rolls.

Under the current system, someone who applies for welfare is lucky to get any benefits. More likely, the family will be "diverted" -- sent to a food bank, told to apply for child support from an absentee parent, or assigned to a training program designed to keep them searching for a job. Those who make it through this process may see their benefits cut for any of a multitude of infractions (including, in some cases, having a child who regularly skips school).

These practices, often characterized as part of an effort to endow the poor with "self-esteem," have been extremely effective -- at least at cutting the welfare rolls. A report by the National Campaign for Jobs and Income Support shows that welfare caseloads rose as unemployment went up in the recession of 1990-1991, but that this time, caseloads actually fell in 14 of the 47 states where unemployment rose between March and December 2001. In Wisconsin, the state that pioneered a particularly draconian version of welfare reform under the leadership of former governor and current Health and Human Services Secretary Tommy Thompson, unemployment rose by 0.6 percentage points during the same period, but the welfare rolls just kept on dropping -- by 29 percentage points. And changes now being debated could make the program even less accessible to poor families: With TANF up for reauthorization in Congress by September 30, the Bush administration is pushing measures that would make benefits more difficult to get, and even harder to keep.

So what do you do when there are few jobs available and the safety net lies in tatters? We talked to former welfare recipients who recently lost their jobs in five states -- New York, Oregon, California, Florida, and Illinois. Some had already exhausted their five-year lifetime benefit limit; others remained potentially eligible for welfare. None of them were having much luck. While the media tends to focus on displaced dot-commers and laid-off Enron executives, these women represent the hidden underside of the recession. In the scary new world of post-welfare America, their experience has been like that of someone who looks out an airplane window on a bright, clear day and sees nothing at all below.

Janet Cook is one of the many who have gone from welfare to work to nothing in a few short years. We talked to her by phone at a residential motel in Portland, Oregon, where she was paying more than $300 a week for the single room she shared with her husband and their four children. Cook, who is in her late 30s, held a job with a truck manufacturer for six years until she was laid off last April. Her husband is a construction worker, and they used to live in the houses that his company was working on, moving on as each was completed. Then, last fall, the company relocated to another city, and the couple decided to stay rather than yank their kids out of school. With no jobs in sight and their savings soon eaten up by the motel bills, there was nothing to do but apply for welfare.

It's "murder to get through the process," Cook says. "You have to be flat broke so you can't function. They want you to land a job, so they make you wait. They don't give you cash for the first two weeks. The first week they make you attend a job workshop. The second week is job search. If you miss one hour, you start over for the whole two weeks." On the day we spoke to her, the family was leaving the motel and moving to a shelter. (Cook ultimately did get benefits, but not until a Legal Aid attorney intervened on her behalf.)

All of the former welfare recipients we interviewed described the maze of obstacles that now lies between a needy family and even a paltry amount of cash assistance -- a set of hurdles far more daunting than the pre-reform bureaucracy. There are long lines in welfare centers with waits, one New York woman told us, of up to nine hours. In a Latino neighborhood, there may be no Spanish-speaking caseworker on duty. In the 1960s, a federal regulation required that welfare offices accept oral applications. Now, you may have to fill out the same form three times, just to save the agency photocopying expenses.

"They close your case for any small thing now," reports Dulce Severino, a mother of two who lives in Brooklyn. "You can't speak to a social worker -- you have to wait a whole day to see them. And they speak badly to people when they finally see them. There are ugly words, almost fights with the social workers." Another Brooklyn woman reports that "some days there are almost riots" -- and there really would be, she believes, if it weren't for the heavy police presence inside the welfare centers.

Applicants who aren't turned away at the welfare office often face another obstacle -- the private companies that increasingly contract with states and municipalities to administer welfare programs. The 1996 law allows governments to contract with churches and community groups, but most contracts have gone to such distinctly non-faith-based entities as Maximus, Unisys, and Lockheed Martin. Some companies specialize in "job readiness" services; others do everything from conducting interviews to determining recipients' eligibility, often under contracts that reward them for any funds they do not spend.

Sharon Bush, a mother of four who lives in the East New York section of Brooklyn, applied for welfare in November after medical problems forced her to quit her job. After she filled out the paperwork, two caseworkers paid her a visit to investigate her claim; next, she was sent to Curtis and Associates, a private, for-profit job placement firm. There she was given a lengthy test, shown to a desk with a phone, and told to start cold-calling companies in search of a job. "They don't help, they don't provide contacts," she says. "Meanwhile there are all these people sitting there, waiting, who need back rent." She would have to report to Curtis, she was told, from 9:30 to 4:30 daily for four weeks. In the meantime she'd receive some emergency assistance -- a total of $156.60.

The sheer hassle of "reformed" welfare is enough to discourage many people from even applying. But the best-known and most clear-cut way that TANF keeps the rolls down is through the five-year lifetime limit on benefits. The clock started ticking with the passage of the welfare reform law in 1996, with the consequence that 120,000 families exhausted their benefits just as the recession hit in 2001. Dulce Severino's family is one of them, although she has worked most of the time since 1992, packing clothes in the sweatshop factories that have sprung up in her Brooklyn neighborhood of Bushwick. Because her earnings were so low -- her best wage was $5.15 an hour -- Severino received a welfare wage supplement, so the clock on her lifetime limit was running even as she worked. If she had been paid better, she would still be eligible for welfare today.

For women without work or welfare, "luxuries" like nonemergency medical care are the first things to go. Nicey Jenkins of Liberty City took computer training to get off welfare, but ended up working at McDonald's instead. She has given up on paying her credit card bills: "I can't give them anything. I can't make the minimum payment." Another woman we met in Liberty City has declared bankruptcy. Each woman we talked to mentioned family as a major source of support -- the grown son who picks up the phone bill, the sisters who offer to babysit, the boyfriend who pitches in for the rent. Without her family, Jenkins says, "I would have killed myself."

Mostly, though, people talked about the daily challenge of putting food on the table. Beverly Ransom reports that "sometimes we have breakfast for dinner. A lot of the times I skip the meal because I can go without. My first priority is my kids. I say, 'I'm not hungry right now.'" Nicey Jenkins buys boiling meats -- like neck bones -- and serves them over rice. Sometimes, to please her kids, she makes fake fast food: "We have 'KFC night,' 'Taco Bell night.' It works when they're young."

All across the country, the dangerous combination of recession and a damaged safety net is driving families to soup kitchens, food pantries, and shelters. A U.S. Conference of Mayors survey on hunger and homelessness in major cities showed that last year requests for emergency food assistance rose by an average of 23 percent, while requests for shelter increased by 13 percent. Another national survey of food-pantry and soup-kitchen users found that almost 40 percent had been cut off from welfare benefits within the past two years. Data gathered by Food for Survival, one of New York City's largest food-pantry groups, indicate that 1 in 5 New Yorkers -- a total of 1.5 million people -- use emergency food assistance at least once a year; a majority of those receiving such help for the first time are single mothers who say that what they most need is a job.

Even before the recession struck, welfare reform was hardly the "resounding success" President Bush called it this spring. To be sure, it was easy, at least in the boom years, to earn more in a job than the meager cash allowances welfare offered. But as critics of reform have repeatedly pointed out, the $7 and $8 an hour averaged by former welfare recipients was about $6 short of what the Economic Policy Institute calculates a family of three needs for a minimally adequate, bare-bones budget. It was in the boom year of 2000 that the nation's largest network of food banks, America's Second Harvest, reported "a torrent of need that we cannot meet," with many local charities blaming the rising demand for their services on welfare reform and insufficient wages. Milwaukee, a city whose widely publicized "W-2" program makes it the veritable capital of welfare reform, saw dramatic increases in the use of food pantries and emergency shelters through the late '90s.

No small part of the pre-recession misery of the poor was due to the states' Scrooge-like administration of TANF. In a number of states recipients are not told that they might be eligible for food stamps and Medicaid -- a key benefit, since many low-wage jobs don't offer health insurance -- even after they leave welfare. Nor have the states reliably provided the promised support, especially child care subsidies, for women making the transition from welfare to work. You might start leaving your children with a child care provider only to find out that your subsidy had never made its way through the bureaucratic maze. One woman, whose story we learned from Eastern Michigan University researcher Valerie Polakow, took her four-year-old to work with her because the promised child care subsidy had not materialized. Her employer fired her for showing up with the child; then, in a neat Catch-22, TANF threatened her with reduced benefits for losing her job.

And there seems to be little inclination among politicians to fix such problems in this year's overhaul of TANF. State and local governments, knowing that they'll be left with providing emergency services as women who can't find a job are cut from the rolls, want more flexibility in extending benefits. Some Democrats in Congress are arguing for more spending on child care. But no one expects fundamental changes to the 1996 reform and its premise -- that the job market holds all the answers, in good times and bad.

With six years' hindsight, it's hard to fathom why no one, back in 1996, seems to have thought ahead to a time when jobs would be in short supply and millions of Americans might sorely need cash assistance. We talked to Mary Jo Bane, a Harvard professor who left her post as the Clinton administration's assistant secretary for children and families in 1996 to protest the direction of reform. "People mumbled about it," she says, "but the economy was so good then ." David Ellwood, who along with Bane co-chaired Clinton's welfare reform task force and who also teaches at Harvard, told us, "Many people thought about the possibility of a downturn. The real question is why the people who drafted the bill, and signed it, willfully didn't."

Part of the answer may lie in the peculiar economic euphoria of the mid- and late '90s, when bearishness began to seem unpatriotic and prosperity looked like a permanent entitlement. The emphasis, even among liberals, was on "making work pay" and expanding benefits such as child care and the Earned Income Tax Credit, which provides low-income working families with up to $4,000 a year in cash. Hardly anyone, welfare recipients included, wanted to see welfare-as-we-knew-it restored.

But the main problem, says Ellwood, was sheer irresponsibility -- the very flaw the reformers aimed to eliminate among welfare recipients. "There was just enormous pressure to reduce welfare, and the attitude toward a possible economic downturn was basically, 'We'll cross that bridge when we come to it.'" According to Ellwood, Clinton believed the money that states saved as a result of welfare reform could be used to help people in case of a recession; he did not foresee that a downturn would find states strapped for funds and eagerly slashing programs like Medicaid and child care.

The result has been that America entered its most recent recession as defenseless as if we had to face a terrorist attack without firefighters or emergency rescue workers. The safety net that sustained millions of the poor through previous downturns, however inadequately, has been torn to shreds.

We could see the current crisis, whose effects on unemployment will persist long after the recession technically ends, as an opportunity for genuine reform -- including meaningful assistance for those who cannot find work, and reliable help, such as child care, for those who can. But instead, the Bush administration and Congress, like the welfare reformers who preceded them, seem poised to look the other way.