Saving Welfare Reform
The next mayor will face intense pressure to reverse two decades of progress.
SUSAN WATTS/NY DAILY NEWS ARCHIVE/GETTY IMAGES
In all the discussion leading up to New York Citys upcoming mayoral election, what was once a hot-button issue—welfare—has been conspicuous only by its absence. Thats not so surprising: the citys welfare system has operated efficiently and effectively in recent years, while todays headline issues—from the economy to failing schools to controversial police tactics, not to mention the ethics of horse-drawn carriages—have kept candidates plenty busy.
But ignoring welfare is a serious mistake. The 1996 federal welfare-reform law, which time-limited aid and imposed a work requirement on many recipients, also gave the states wide latitude in designing welfare programs. New York State, in turn, has given its local governments significant room to administer those programs as they see fit—room that New York Citys last two mayors have used wisely. During their tenures, Rudolph Giuliani and Michael Bloomberg not only reduced the welfare rolls; they transformed the nations capital of welfare dependency into a center of welfare reform founded on an ethos of personal responsibility. Without a serious commitment to Giulianis and Bloombergs policies, the next mayor could put New York right back on the road to dependency.
To understand whats at stake, its important to remember the costly misery of the pre-reform era. During the 1960s, New Yorks long tradition of government-operated generosity—a tradition that included public hospitals, public housing, and even a city university—veered into irrational excess. The federal War on Poverty had flooded the city with social-services money to help the poor, and John Lindsay, who became mayor in 1966, enthusiastically spent it on welfare for new clients. Idealistic city officials didnt care that the city had to match the federal money. I have always viewed the cost of welfare to be whatever it is, shrugged Lindsays first commissioner of social services, Mitchell Ginsberg—Come-and-Get-It Ginsberg, as the Daily News dubbed him.
An aggressive new generation of welfare-rights advocates took him at his word. They scoured New York for potential recipients, held sit-ins, and issued ultimatums for even more government welfare money and fewer restrictions on getting it. They assiduously informed the few welfare applicants who were rejected that they had the right to be reconsidered at a fair hearing. Activist lawyers and liberal judges diluted—and, in some cases, overturned—rules that had kept the welfare rolls from dramatically expanding in the past. The Lindsay administration agreed (not that it needed much arm-twisting) to simplify the welfare application to a single page of self-declared need, no questions asked. The number of New Yorkers on welfare doubled during Lindsays mayoralty.
The welfare explosion reflected a striking shift in social attitudes. Until then, the poor had come to New York to improve their lot. Some might need public or private aid, but to receive it was evidence of failure, even a reason for shame. The Roosevelt administration had intended the main federal welfare program, Aid for Families with Dependent Children (AFDC), to be merely a temporary way for abandoned and widowed women with children to counter the severe hardship of the Great Depression. Even so, FDR worried that the program could become a narcotic, a subtle destroyer of the human spirit that sapped individual initiative. In Lindsays New York, that fear disappeared. Even as the labor market surged—183,000 jobs were created in the city during his first term—Lindsay swept aside the traditional American ethos of self-sufficiency.
Meantime, the citys poverty demographics were changing. As the 1960s marched on, poor, minority neighborhoods saw a growing number of never-married women having children. AFDC became their major source of income. Under the eras assumption that mothers should stay at home with their kids, the government found itself supporting unmarried mothers, just as husbands supported their wives. One of the few to grasp the danger of this trend was Daniel Patrick Moynihan, whose 1965 report The Negro Family: The Case for National Action pointed out that 24 percent of black children were being born to unmarried mothers. But woe to anyone who warned of the social and financial ills that so many single-mother families might cause, as Moynihan discovered when cries of racism and sexism greeted the reports release.
By the end of 1973, when Lindsay left office, about 1 million of New York Citys 7.9 million citizens were on welfare. Mayor Ed Koch had some minor success bringing those numbers down after the fiscal crisis of the 1970s, but the rolls never dropped below 800,000. And Kochs successor, David Dinkins, revived the citys welfare profligacy. The rolls swelled from 823,000 in December 1989, a month before Dinkins took office, to 1.1 million four years later—even though New Yorks population had fallen to 7.3 million since the Lindsay years, and even though the city gained jobs in 1993 and 1994. By the time Dinkins left office, the citys budget had a structural deficit of more than $2 billion. The Dinkins administration portrayed its work, in accordance with conventional liberal opinion, as evidence of compassion. This is an indication of the citys capacity to meet needs, Mary Nakashian, deputy commissioner of the Human Resources Administration (HRA), told the New York Times. Were trying to make sure that people who deserve and are entitled to get on these programs do so.
Had the citys generosity meant greater well-being for disadvantaged Gothamites, the spending might have been justified. But it didnt. By the early 1990s, Gothams poverty rate was almost as high as poor and miserly Mississippis, Fred Siegel observed in his history of the Giuliani mayoralty, The Prince of the City. Many of the systems demoralized caseworkers were recent immigrants who lived in the same neighborhoods as those they served; their own struggles to get by made them suspicious, if not disdainful, of their clients.
They often had cause. Liberals mocked conservatives for their denunciations of welfare queens—poor mothers who purportedly drove Cadillacs to the welfare office to pick up government checks. But in New York City, fraud was endemic and often egregious enough to be tabloid-worthy. Siegel describes a woman who cashed welfare checks under 15 different names and for 73 fictitious children, reportedly collecting $450,000 between 1987 and 1995. A random investigation of welfare recipients in Newark found 23 percent of them double-dipping into New York City funds. During a visit to a Union Square welfare office, the New York Timess Jason DeParle heard dozens of recipients classified as medically unemployable confess that they secretly commuted to work or to class. After obtaining a list of students enrolled at the City University of New York, the HRA was stunned to find that 12,000 of them were on welfare—including 5,000 claiming to be too sick to work.
Graph by Alberto Mena
This was the welfare reality that Rudolph Giuliani faced when he took office in January 1994. Giulianis thinking on urban poverty was radically different from that of the social-services industry. New York, he observed in his second State of the City speech, generates wealth, which attracts poor people seeking to ascend into the middle class. . . . Its our goal to increase that number. Giuliani dismissed the commonplace left-liberal view that low-wage jobs demeaned the workers who took them. Just the opposite: Dignity and hope . . . can be found in a job, the very best social program there is. Giulianis philosophy was grounded in a very American optimism about individual initiative and personal responsibility. Jason Turner, who ran the HRA for most of Giulianis second term, described the administrations belief that work and self-reliance are . . . something individuals must achieve with their own efforts with the help and support of government, contrasting that philosophy with the advocates contention that the circumstances of the poor were determined by vast forces beyond their control.
Giuliani made four major reforms to the citys welfare system. First, recognizing that fraud was extensive, he required recipients to identify themselves on fingerprint scanners, and he instituted home visits to verify the information on application forms. Giuliani also refused to believe, as the advocates did, that most welfare recipients needed training before they could find respectable jobs and that many were unable to work at all. Instead, he operated under the assumption that what prevented the urban poor from finding work was welfare itself, which isolated them from mainstream life. To break that isolation, he insisted on a new work-first ethos for the welfare system: except for those with extreme disabilities, everyone, including mothers of young children, would have to work in exchange for temporary government help. Giuliani proceeded to strengthen the loosely enforced Work Experience Program, or workfare, as everyone soon called it, which required recipients to work in city parks or offices in exchange for benefits. A third reform, led by the enterprising Turner, transformed the welfare bureaucracy so that it constantly emphasized work. Welfare offices became Job Centers, and caseworkers directed applicants to vendors specializing in finding employment for them. That led to Giulianis final reform: paying these vendors not for the number of people they served but for the number who found jobs and kept them for at least three months.
These changes had dramatic effects. By the end of Giulianis second term, the welfare rolls had shrunk by 650,000 people. Just between 1996 and 2000, the share of single mothers who were in the citys labor force grew from 16 percent to 42 percent. And the decline in overall poverty rates outpaced that of the rest of the country, giving the lie to those who had prophesied Dickensian horrors.
Mayor Michael Bloomberg had any number of plausible excuses to back off from his predecessors contentious reforms. Giuliani had benefited from the strong economy of the late 1990s. But by January 2002, when Bloomberg arrived in office, the city was reeling from the post9/11 downturn, with the unemployment rate rising to 7.5 percent, from 5.7 a year earlier. As welfare mothers hit the five-year time limit mandated by the 1996 federal law, warnings about the coming destitution echoed through editorial pages and reports from advocacy groups. Giulianis efforts had sifted out the more capable welfare applicants; the new administration had to deal with more clients with multiple barriers, such as poor work histories and emotional problems. And then there were the very different temperaments of the two mayors. Giuliani relished sparring with welfare reforms opponents: the legal bar, academics, foundations, womens groups, poverty activists, and the press. Bloomberg, a lifelong Democrat before jumping to the Republican ticket to run for mayor, probably didnt enjoy the inevitable charges of coldheartedness.
Yet Bloomberg vowed, We will not allow our city to recede to the culture of dependency, and he followed through on the promise. In 2003, the city council passed a bill that would have let GED and English-language classes count toward welfare recipients work requirements. Bloomberg vetoed it, reminding council members about research showing jobs to be far more effective than classes at reducing dependency. The council also pushed the mayor to apply for a federal waiver providing single, able-bodied adults with long-term access to food stamps—with no work requirement. Bloomberg refused.
The administration didnt just head off attempts to dilute earlier reforms; it pushed new ones. Recognizing the change in the nature of the welfare population, the administration introduced the WeCare initiative in 2005 to give more customized attention to the tough cases. The administration has squeezed another 20 percent decline from the rolls. Today, there are about 360,000 New Yorkers on cash assistance, down 69 percent from the high of the mid-nineties. Remarkably, the number held steady during the Great Recession and remains stable, even as the New York State unemployment rate has lingered above 8 percent. In 2012, the HRA helped place almost 87,000 recipients in jobs, a number comparable with its achievements in prerecession years—partly because the city continued to gain entry-level jobs in health, education, and hospitality but mostly because the HRA, now headed by Robert Doar, held fast to the principle of work first.
And that takes us back to the future. Its hard to imagine the next mayors standing by while the welfare rolls doubled, as Lindsay did. Political scientist Martin Shefter found that Gothams outsize welfare spending accounted for more than 27 percent of the total increase in city expenditures in the 15 years before the fiscal crisis of the 1970s, playing a significant role in that mess. No sane politician wants to risk a legacy of that kind.
But even an increase in the welfare rolls well short of Lindsays would damage the citys budget and morale profoundly, to say nothing of the human cost in lives lost to dependency. Merely loosening requirements for fingerprinting or home visits, say, or offering training and education instead of insisting on work first, could unravel much that Giuliani and Bloomberg accomplished.
In fact, theres still more that the next mayor can do to advance the principles of welfare reform. For instance, New York State offers Safety Net Assistance (SNA) to the childless, nondisabled poor and to single-mother families that have exceeded the time limit for federal welfare; its one of the few states to offer such support. By law, New York City must pay 71 percent of the tab for city residents. But SNAs work requirements are weakly enforced, if at all.
The citys next mayor can expect any continuation of reform policies to meet fierce resistance, since the compassion industry, as Giuliani sarcastically dubbed it, has been biding its time in anticipation of a friendlier administration. The reform naysayers will probably argue that work first hasnt provided a route out of poverty. Theyll have a point. Working poverty has indeed become a bigger problem since the mid-nineties and since 2002, when Bloomberg took office. A 2013 report from the Center for the Urban Future found that 35 percent of employed New Yorkers older than 18 earned less than $12.89 an hour (or $26,818 a year); thats up from 31.1 percent in 2007.
But the naysayers will doubtless fail to note one of the major reasons for povertys tenacious hold: the growth of single motherhood. The change in the demographics of poverty that Moynihan first warned about in 1965 has become an entrenched fact of life. The architects of the 1996 federal welfare-reform law had hoped that the discipline of the workplace would inspire poor women to make more mindful decisions about when and with whom they had children. It didnt work. Today, 45 percent of all births in the city are to unmarried women, most of whom will have little contact with the fathers of their kids; in poor areas of the Bronx and Brooklyn, the number runs as high as 80 percent. The Bureau of Labor Statistics, examining American families with children in which at least one family member works, says that 28 percent of those headed by a woman are poor, as are 18 percent of those headed by a man and 7 percent of those headed by a married couple.
The Bloomberg administration recently tried to address the issue by launching a blunt poster campaign to discourage teen births. It was a gutsy move that provoked the predictable protests, such as Bronx councilwoman Annabel Palmas objection that the campaigns dismissive tone perpetuates hurtful stereotypes about teen parents and their children. Lost in her clichés, Palma failed to notice the real problem: the campaign was outdated. These days, the large majority of low-income single mothers are in their twenties. That may or may not be better for their children, but in terms of the goal of self-sufficiency, its not progress. Whether shes 18 or 23, a low-income single mother is one illness or accident away from applying for welfare. Even if shes working, shell probably depend on some other component of the expensive infrastructure that the federal, state, and local governments have created to enable and sustain the fragile single-mother household: food stamps, health insurance, subsidized housing, child care, after-school programs, and, in too many cases, Supplemental Security Income and special education. Its not clear how to dismantle this infrastructure entirely, even if it were politically possible—or morally wise—to do so.
Still, low wages and poverty dont dilute the lessons of welfare reform: that welfare dependency has enormous costs for both individuals and government; that work is the antidote to dependency; that people will always try to game the system; and that organizations, even nonprofits, can sometimes be more devoted to keeping themselves in business than to delivering effective services. The mayor will need to be vigilant even against apparently minor rollbacks. Proposals that would weaken reform can seem benign or can be couched in bureaucratic obfuscation that only a policy expert could decipher.
Given the politics of some of the mayoral hopefuls, as well as an electorate that, polling suggests, is open to higher welfare spending, its possible that the next mayor wont follow this advice. But he—or she—has been warned.
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