NCPA - National Center for Policy Analysis

Recession-Proof Welfare Reform?

April 11, 2003

Advocates of the poor predicted disaster when Congress passed the 1996 welfare reform bill. And when welfare recipients flocked to jobs during the late 1990s economic boom, experts warned that these lately-hired workers would be first-fired when the economy turned sour.

However, to the surprise of reform supporters as well as opponents, onetime welfare recipients have held on to most of their job market gains -- even as jobless rates among the general population were rising.

  • Welfare rolls have remained level nationwide, and they continue to decline in big cities.
  • Some 47 percent of never-married mothers were employed in 1994, according to the Urban Institute.
  • By 2000, 69 percent of this group had jobs, a figure that dropped slightly to 68 percent in 2002.

"Why didn't the welfare rolls grow in a recession?" asks Wendell Primus, who quit his job as a Health and Human Services Department welfare policy specialist to protest the reform law.

One reason, say experts, is that people who were long-term welfare recipients in 1996 have become connected to the workforce. If they lose their first job, they find another one. Many start out with low-paying jobs that were not shed during the recession -- as home health care workers, day care providers and janitors. Job placement professionals say they are invariably better off with those jobs than on welfare.

Primus, who is now an economist for Congress' Joint Economic Committee, remains skeptical.

Source: Elizabeth Shogren (Los Angeles Times), "As Jobless Rate Rises, Welfare Program 'Recession-Proof,'" Dallas Morning News, April 4, 2003.


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