Who Should Still Be On Welfare?

By ADAM COHEN

Cherlyndra Wells, 21, was just the kind of welfare recipient who sets critics of welfare programs off on a rant. A single mother of four from Dallas, she left school in the ninth grade and started having children. Rather than work or marry a man who did, she relied on welfare, food stamps and Medicaid. The tough 1996 welfare-reform law spelled out in clear terms what it wanted Wells and others like her to do in the future: get a job.

Under the new rules, Wells' life changed drastically--but not the way reformers intended. She did give up welfare last year, but not to work. Instead she lives with her mother. She takes the occasional odd job and gets help from her children's father, who kicks in support "whenever he can." Health care is tough--"I have a pile of bills this high," she says--but she found a hospital emergency room that treats her kids even when she can't pay. Wells succeeded in bucking a major national trend. She didn't join the millions of Americans who have left the welfare rolls in recent years for gainful employment.

These are euphoric times for welfare reform. The rolls have plunged nationwide--down 48% in the past six years, to a 30-year low. And two-thirds of those exiting the system have taken jobs, according to state studies. Last week's Welfare to Work conference in Chicago, which President Clinton addressed, was a three-day lovefest between advocates for welfare recipients and labor-strapped companies seeking to hire them. Among the most surreal moments: a session on "Finding Welfare Recipients for Your Training Programs," at which social workers bellyached that in these boom times there just aren't enough welfare moms to go around.

But the more welfare reform succeeds, the clearer it is that there is an entrenched group of welfare recipients who show no sign of heading anywhere near the workforce. This is true, for example, in Dallas, where despite a frothy economy and a countywide unemployment rate of just 3.6%, 17,500 of Wells' neighbors are collecting welfare benefits as if nothing had changed.

Welfare professionals have a term for these persistent welfare cases: the hard to serve. Many have backgrounds that employers shun: weak education, illiteracy, drug and alcohol abuse, mental-health problems and criminal records. Often they also have logistical obstacles, like transportation and child-care difficulties. And, some argue, many of them have the toughest barrier of all: they don't want to do work.

Today the hard to serve are the hottest topic in welfare reform--and the subject of a hard-fought ideological battle. To liberals--and the Clinton Administration--the answer is greater investment in job training, substance-abuse counseling and other programs to help them overcome their various obstacles and get to work. At the same time, liberals have begun calling on the Federal Government to reconsider a central tenet of the 1996 reforms: that virtually every welfare recipient can and should be in the workforce. "It flies in the face of common sense," says University of Michigan public policy professor Sheldon Danziger. "There's no evidence from any welfare program that everyone can work steadily."

But conservatives insist that three years of welfare reform have proved what they believed all along: that the best way to get welfare recipients into private-sector jobs is to subject them to strict work requirements. Also, conservatives doubt that billions of dollars in government programs are needed to prepare the hard to serve for work. "There's a great irony to that argument," says Douglas Besharov, a scholar at the American Enterprise Institute. "Welfare reform has already accomplished a 40%-to-50% decline in the rolls without spending money on job training."

The battle over the hard to serve is being waged now in Congress in a multibillion-dollar fight over welfare funding. The 1996 act guaranteed the states $16.4 billion in block grants annually. But with welfare rolls plunging around the country, much of that money has gone unspent--and congressional Republicans are talking about taking back at least $4 billion. That would be a "big mistake," Clinton declared last week in Chicago. He'd like to see the money spent on the millions of people "who could move from welfare to work if they had more training, if they had transportation, if they had child care."

And the number of people needing this kind of help may be about to shoot up, goes this argument. That's because the time limit set by the 1996 act will soon kick in. It requires that those who have received benefits for five years be cut off from welfare for the rest of their lives. The act allows states to exempt as many as 20% of cases from the five-year limit--but that may not be enough to cover a state's entire hardest-to-place population.

At the heart of the fight over hard-to-serve people is a dispute over their character. Are they, as liberals say, workers held back by lack of skills, child-care problems and other facts of life beyond their control? Or are they, as conservatives insist, underachievers at best and shirkers at worst?

The debate starts at the most basic level--there is no agreement on just how many people fall into each category. "When I started out, we talked about one-thirds," says Eli Segal, president of the Welfare to Work Partnership. "One-third would be easy to move off the rolls, one-third would be harder and one-third would be impossible." But that conventional wisdom has been abandoned now that states have begun cutting well into the bottom third of their rolls. Caseloads have dropped 69% in Mississippi in the past three years, 81% in Wisconsin and 84% in Wyoming.

One reason the boundaries are hard to define is that this roiling economy has thrown out the old rules about who can get hired. With the national unemployment rate at 4.3%--and at less than 3% in some states--businesses are dipping deeper into the labor pool than ever before. The Welfare to Work Partnership has been placing recovering drug addicts and alcohol abusers in private-sector jobs. Even job applicants with criminal records are getting hired. UPS, for one, has "relaxed" its practice of not hiring ex-cons, says Rodney Carroll, a UPS executive who serves as chief operating officer of the Welfare to Work Partnership.

These facts bolster the conservative argument that there are few real "barriers" to employment. "There's going to be a small group who are, strictly speaking, disabled," says Lawrence Mead, professor of politics at New York University. "But they shouldn't be on welfare at all--they should be on disability." For the rest, conservatives say, the only bar is motivation. They point to a decade-long study by Wisconsin's Project New Hope. The group made an unusual deal with 677 poor Milwaukeeans: if they worked 30 hours a week, they were guaranteed enough pay to rise above the poverty line (and affordable health-care and child-care subsidies). The results were disappointing. Only 27% stayed long enough to bring their families out of poverty, and their yearly income was no more than that of a similar group of poor people who didn't participate.

Proof that poor people lack the will to work their way out of poverty? Not necessarily, say liberals. In the real world, the hard to serve lead complicated lives. "These folks are severely limited in their ability to function day to day, much less hold full employment," says Brian Burton, executive director of the Wilkinson Project, a Dallas social-service agency. "They're severely addicted or have intergenerational pregnancies when they are 14 or 15. They may or may not have more than an eighth- or ninth-grade education."

Alicia Ortiz, 25, a Dallas mother of four, is leading one of those complicated lives. She used to work, but after her children's father left, she couldn't afford child care and had to quit and go on welfare. After another relationship turned abusive, she moved to a domestic-abuse shelter program. On top of it all, Ortiz says, she has "problems in my head." She has been attending some life-skills classes but has no immediate prospects of getting a job. "Some of us do have problems," she says. "We're looking for a little help."

Liberals point out that the system is not creating the right incentives. Most jobs taken by former welfare recipients, according to the National Governors' Association, pay less than $7 an hour, not enough to bring a three-person family above poverty. Often welfare recipients who get jobs make less in salary and benefits than they received on welfare. Staying on welfare in that case is not poor motivation--it's common sense. Wendell Primus, director of income security at the Center on Budget and Policy Priorities, says the answer is to use tax credits for low-paid workers to tilt the balance in favor of work.

So who's right? If welfare reform has proved anything, it is that many more recipients can be made to work than anyone had thought possible. And there is evidence that some still will not accept the fact that they will eventually need to work, though that requirement has been law for more than three years. Geraldine Willoughby, a community activist in Dallas, says many of her neighbors "feel like something is going to happen," she says. "They say the government won't cut us off."

But arguing that most people can move off the rolls is not the same as saying everyone can. Fred Grandy, former Republican Congressman from Iowa, now heads Goodwill Industries, which finds jobs for those difficult to employ. Grandy believes that almost everyone can work. Goodwill helps the mentally retarded do just that. But he also believes that as reform proceeds, some welfare recipients will not be able to pull their lives together and will need to be protected by a safety net. "Tough love" has its place in welfare reform, he says, but it has its limits. "The work of reform is going to get a lot tougher," he says, "and the love is going to have to get a bit gentler."

--With reporting by Hilary Hylton/Dallas

With reporting by Hilary Hylton/Dallas