American Dream

by Jason DeParle

  Nonetheless, despite its holes, the rise of a “work-based safety net” did ease the transition off welfare. A study by David Ellwood makes the point: in the mid-1980s, a typical mother of two leaving welfare for a minimum-wage job would have come out just $2,000 ahead, even with only modest work expenses, and the whole family would have lost health insurance. By the late 1990s, that same woman would have gained $7,000 and her kids could get Medicaid. As welfare (greatly) increased its hassles, work (modestly) increased its rewards.

  What happened next astonished everyone. The welfare rolls collapsed. They collapsed in Boston and they collapsed in Phoenix. They collapsed in New York City. They fell fastest in states like Wisconsin and Florida, which made aggressive moves. But they also gave way in Texas and Illinois, which showed little bureaucratic zeal. They plunged where the economy boomed, and they plunged in stretches of the poverty belt, from New Mexico to West Virginia. Historically, the rolls had never fallen more than 8 percent in a year. By the time they leveled off in 2001, they had fallen for seven straight years by a total of 63 percent. Seven states cut the rolls by more than three-quarters. In Wisconsin, a half-dozen counties at some point in the year had a W-2 caseload of zero. Three million families—more than 9 million people—left the rolls nationwide.

  Explaining what caused the rolls to vanish is harder than it seems. Certainly, the economy helped. Nationally, the unemployment rate fell to 4.0 percent, its lowest level in thirty years. Shorthanded employers who would have once shunned recipients all but begged them to apply. But previous booms hadn’t cut the rolls. And the correlation between caseloads and state unemployment is faint at best. One study found that states with more unemployment had greater caseload declines, perhaps because they passed tougher laws. The tax-credit expansion also helped reduce welfare: the more work pays, the more people work. But the District of Columbia, with one of the largest local credits, had some of the smallest caseload declines. The auspicious economics surround the story like good weather—necessary, perhaps, for cutting the rolls but not sufficient.

  Two prominent economists with contrasting politics—Rebecca M. Blank and June E. O’Neill—separately estimated that policy changes did three times as much to cut the rolls as the economy did. But which policy changes? In general, the places with the toughest sanctions had the steepest declines. But sanctions were tough in Tennessee, moderate in Oregon, and weak in Arkansas, and each cut its rolls similarly. Time limits may have encouraged families to leave welfare and bank their remaining time. But the rolls fell more in Michigan, with no time limits, than in Texas, Virginia, and Connecticut, with short ones. In general, the rolls fell faster under Republicans than Democrats. But they fell nearly as much in two of the most liberal states (California and Vermont) as they did in two conservative ones (Arizona and Tennessee).

  Clearly something happened that neither economics nor policy fully explains. Rebecca Blank found that half of the caseload declines came from something her model couldn’t detect. Part of what the era brought was a sudden cultural change, what social scientists sometimes call “message effects.” From the TV news to waiting-room posters came the same strident message: “Get off the rolls!” In Creek County, Oklahoma, the rolls fell 30 percent even as the legislature was still debating the law, a decline officials largely attributed to the mere rumors of what was coming. In its mysteriously powerful convergence of events, the late 1990s can be thought of as a bookend to the 1960s. One era, branding welfare a right, sent the rolls to sudden highs; the other, deeming welfare wrong, shrank them equally fast.

  The unexpected declines brought unintended effects. White families left welfare faster than blacks, and blacks left faster than Hispanics, who consequently composed a growing share of the rolls. The notion that most recipients are white, long misleading, grew plainly untrue. By the end of the decade, blacks and Hispanics outnumbered whites by a ratio of two to one. (The rolls were 39 percent black, 25 percent Hispanic, and 31 percent white.) As race changed, so did place: the caseload grew even more concentrated in big cities. In Wisconsin, where the trend was extreme, 85 percent of recipients lived in Milwaukee. Welfare, that is, increasingly became what most voters already assumed—a program for urban minorities.

  At the same time, falling caseloads brought one problem that states welcomed: it left them rolling in dough. States literally had more money than they knew how to spend. The irony here should not be missed. The authors of the law set out to slash welfare budgets. Instead, by freezing federal payments at historic highs while caseloads fell, ardent conservatives achieved something that even liberals hadn’t dared to propose: a huge rise in per capita welfare spending. Over six years, states collected $59 billion more than they could have under the previous system, when falling caseloads brought reduced federal dollars. By 1998, Wisconsin collected $22,000 for every family left on the rolls. Having promised to do more with less, the governors wound up with more—much more—than anyone had imagined.

  Antipoverty windfalls are unheard of. Since the money came with few constraints, states had nearly unlimited reach to improve poor - people’s lives—not just those on the rolls but the broader working poor. They could have subsidized rents for needy workers or supplemented their wages. They could have helped entry-level workers like Angie and Jewell train for better jobs. The great expansion of child care largely stemmed from the welfare windfall. But in a perfectly legal maneuver, states also used billions just to sustain programs they had previously financed themselves. That freed funds for other uses but did nothing for the poor. Roads got paved, bridges painted, and taxes cut—all on the federal welfare nickel. In the first few years alone, New York diverted $1 billion into budget swaps. Wisconsin channeled $100 million into a property-tax cut. Most states tried to mask such schemes, but Minnesota spelled it out in the budget: “Replace state spending with federal dollars.” In some states, huge sums simply gathered dust as officials bickered or dithered. Two years into the new welfare age, Wyoming had failed to spend 91 percent of its federal money. In New Mexico, the nation’s poorest state, a third of the federal money went unspent as a defiant Republican governor, Gary E. Johnson, refused to implement a plan passed by Democratic legislators. He relented only after the state supreme court found him in contempt. But by then, he had already cut the rolls in half, mostly through eligibility cuts. With nearly $70 million of its welfare money unspent, New Mexico still had no job-placement agencies in counties where unemployment ran as high as 33 percent.

  “What about Mississippi?” the skeptics had asked, when Congress insisted it could trust the states. Early in the new welfare age, I made a trip to the Delta, where Mack Caples, on the far side of eighty, still puttered in the Eastland fields. Nearby, things were proceeding about as feared: unemployment rates hit double digits for two hundred miles around, but the state was still purging the rolls. In Washington County, where caseloads had fallen more than 30 percent, twice as many families had been sanctioned off the rolls as placed in jobs. Most of the jobs that did exist were distant or unappealing. The de facto capital of the Delta is Greenville, where twenty-seven recipients had moved from welfare to work in the month before I arrived. Of them, ten were packed off to a catfish plant an hour away. They left town at dawn on a company bus and spent their days severing fish heads in a jungle of conveyor belts and saws. The job paid the minimum wage, and annual turnover ran 300 percent. “You work in the cold, you work in the wet—and of course you’re around guts,” the manager, Donald Taylor, observed pleasantly. He praised the state for barring aid to anyone who quit. “If they can go back to Uncle Sam, you can’t keep them in the plant.”

  A few years later, a study in the American Journal of Political Science tried to quantify the factors that shape state policy. The most important was race: the more blacks on the rolls, the tougher a state chose to be. That would come as no surprise in Mississippi, where Governor Fordice wore a tie with a Confederate flag to a meeting on minority set-asides. The racial rub was obvious in t
he Delta, where with few exceptions employers were white and welfare families black. Lured by a state subsidy, Kevin Cunningham, a gregarious Greenville insurance agent, hired a receptionist off the rolls. She was a well-spoken woman who played piano at her church, but he worried her friends might decide, “She knows where the cash drawer is.” He warned her, as she started work, that “business language isn’t Ebonics.”

  Hard luck stories were everywhere. Patricia Watson quit the catfish plant after coming home from work to find her six-year-old daughter missing and her teenage babysitter not even aware that the child was gone; for quitting, Watson was barred from all state aid. Curley Barron had rescued her nephews from foster care and was raising them with the help of a welfare check. But she gave them back when the state ordered her to stop caring for her disabled mother and join a work program. “It doesn’t make any sense,” she said. “The kids were a ward of the state—they weren’t mine.” Even by Delta standards, things were rough in Glendora, which made a cameo appearance in civil rights history as the place where Emmett Till was beaten before being dumped in the Tallahatchie River. All but three of its eighty-eight households had once gotten public aid. After being dropped from the rolls, a mother of four named Carrie Ann Bridges took a night job at a poultry plant seventy miles away. Coming home after midnight, she fell asleep and drove into a ditch, killing herself and her aunt.

  The Delta would challenge any welfare plan. Two time zones away, Oregon presented a contrasting view of state autonomy. Of all the states, it probably worked hardest to help women like Opal, the so-called hard to serve. In Oregon City, a blue-collar suburb of Portland, caseworkers gave them a different name—“drawer people”—since under the old system, that’s where their files had resided. With the rolls already cut in half, about three-quarters of those left on welfare had mental health problems. Half acknowledged drug or alcohol abuse, and 30 percent had criminal histories. Of the sixteen recipients I met in Oregon, eleven described incidents of childhood sexual abuse, a problem that gets no attention in the welfare literature but correlates with any number of problems that make it hard to keep a job. Women who were molested as children are more likely to abuse alcohol or drugs, suffer from depression, or become victims of domestic violence. In my conversations with welfare recipients over the years, talk of childhood molestation has arisen with eerie regularity. “I don’t call it anything special,” one Oregon woman told me, “because it seems like it happens to everybody.”

  While Oregon, like most places, pushed recipients to take entry-level jobs, it also offered a long list of services for those who didn’t soon get one. With the caseload 80 percent white, it was the rare state where welfare hadn’t figured in politics, and state spending was unusually high. Caseworkers could send addicts to treatment or depressed women to mental health clinics. They had job-placement counselors fluent in Russian and Vietnamese. Oregon made a special commitment to drug treatment, financing a residential program with a tax on beer and wine. Oregon had its problems, too. A system that emphasizes caseworkers’ discretion rises and falls on their talents, which even in Oregon were often mediocre. Some applicants were just too troubled to find their way on the rolls, especially since they had to do a month of job search first. I met an indigent mother who was turned away even though her boyfriend had just beaten her, her landlord was evicting her, and she was scheduled for major surgery. She was told she couldn’t get a check until she spent a month looking for a job.

  Nevertheless, up and down the I-5 corridor, it was possible to glimpse what conscientious casework could achieve. There were few better examples than that of Rita Davis, who launched an earnest, vexed search for work after her husband left her. Sexually abused by her father in her teens, she had spent her adult life struggling with anxiety. She read at the seventh-grade level. And she weighed 325 pounds, one reason she was sent away jobless by a dozen temp agencies. Unremittingly earnest, she struggled to tell her story through deep, steadying breaths. “I’d call up on the phone and they’d say, ‘Oh, you sound like the perfect person,’” she said. “Then they take one look at me and they blow it off.” After months of rejection, she met a caseworker who spotted her hidden talent for numbers and persuaded an accounting agency to give her a job, with the state temporarily subsidizing her wage. That’s when a new problem arose. Body odor. “I don’t know what it is,” Davis said. “I take a shower every day.” Her doctor didn’t know either. Her boss called the welfare office and complained that it was driving clients away. The caseworker rushed over with two sacks of deodorant and shampoo, and Davis experimented until something worked. Soon she won a promotion, from receptionist to bookkeeper. Poor, obese, abandoned, and abused, she had been relegated to a kind of nonexistence until—of all things—a welfare program came to her rescue. “I love this job,” she said. “Somebody is able to look past my size and see me.”

  What happened with Rita Davis wasn’t unique; every program, even Mississippi’s, produced some inspired casework. In the new welfare age, someone really looking for help was much more likely to find it. Yet for all the talk about work requirements, the system harbored a strange little secret: many of the people left on the rolls weren’t doing very much. The thought is sufficiently counterintuitive that it bears some explanation. After all, the new system was constantly called tough, and compared to the old one it was. But it was toughest in the application stage and during the first few months, when recipients risked losing their checks if they skipped the ubiquitous job-search class. After that, they could still be kicked off for failing to complete an assignment. But many people didn’t have assignments, at least not consistent ones. When job-search class didn’t lead to a job, it often led nowhere at all.

  Seemingly the law prohibited this, by requiring states to place half their recipients in work activities. But the “caseload-reduction credit”—those frequent flier points for bureaucrats—cut the rate, point for point, for virtually every downtick in the rolls. By 2002, the rolls had fallen so far (60 percent) that twenty states could meet the work rate without putting a single recipient to work. Only ten states had to meet a work goal of 10 percent or more. In other words, to comply with the law, most states had to do . . . nothing.

  Just how much they actually did became a topic of sharp dispute. Federal reports showed that in 2002 states enrolled a third of their caseload in eligible work activities. But the majority were recipients with regular jobs who collected some transitional welfare under the loosened earnings rules. Of the remaining caseload—in a sense, the core caseload—only 15 percent were participating in eligible welfare-to-work activities. Yet because of the caseload-reduction credit, every state met its participation requirement every year. The states argue that the federal numbers are misleading because they omit activities—like drug treatment or part-time work—that don’t count toward the official rates. The states did their own survey and reported that 61 percent of recipients had some sort of assignment. But if there was underreporting in the federal numbers, there was overreporting, too; not everyone on the roster of a job-search class was actually looking for a job. In an odd inversion of welfare politics, the conservatives who had pushed the states-rights revolution began accusing the states of laxness, while liberals, fearful of onerous new rules, defended the states’ judgment and skill. The truth is that no one really knows how much the average recipient was doing. But if my own travels were any indication, the answer was often “not much.”

  Why? Certainly the states had the funds. But keeping recipients productively engaged is hard work—much harder than it sounds. It’s not as if women like Opal were lining up for help. You had to motivate people who didn’t want to be motivated. You had to tailor programs to daunting needs. You had to penalize those who failed to comply, promptly and fairly. And you had to do it with a staff that was typically low-paid and poorly trained. Every state did some of this hard, creative work, more than in the past. But few sustained it on a wide scale. Nor did they have to. The mixture of
hassle and help they offered was enough to cut the rolls. And cutting the rolls brought the sheen of success. It’s easy to make a churlish complaint about people getting something for nothing. But the real concern is for the recipients themselves: hundreds of thousands of the most troubled families were left to idle on the rolls. That’s especially worrisome in an age of time limits, when after five years, or in some places less, they could just be given the boot. With a booming economy, piles of cash, and vanishing caseloads, states had an unprecedented chance to help those left behind. What they managed to construct was at best half a safety net.

  THIRTEEN

  W-2 Buys the Crack: Milwaukee, 1998

  Opal blew it. And in her case so did W-2. Having starred on the cover of The New York Times Magazine, she was fired by the time the issue hit the stands. It’s not clear whether a binge caused the firing, but the firing, in the summer of 1997, gave way to more binges. “I wanted to go get high—I did,” she said. “I was so scared to come home and face Kenny that I stayed gone for a day and a half.” When she got back, Kenny said the police had taken the kids—though really he had left them with Jewell—and as Opal tried to leave for the police station, they started to fight. Kenny had his own demons raging. He demanded that Opal take him to confront the drug dealer, a stunt that - could get someone shot. A few weeks later, she binged again. This time Kenny just acted hurt. “If you love me and the kids, why would you do that?” he asked. It was a question with no rational answer, only a chemical one.

  Opal had lost lots of jobs, but none as promising as the one cleaning the hospital lab, with its path to a double-digit wage. In a three-page letter to her boss’s boss, she pleaded for another chance. “I really, truly love my jobs,” she wrote. “The choices I make now will be positive and aim at proving to myself and others that I am a strong bla”—she crossed out “black”—“woman who’ve had ups and downs in my life and is willing to live my Life to the fullest.” The hospital manager didn’t bother to read it. The timing seemed ominous. She was fired a month before the launch of W-2; in theory, cash welfare was finished. The only way anyone could get a check now was by working a community-service job, an option that Opal had ruled out. (“I don’t work for free!”) Opal had outlasted Angie and Jewell, but even she felt certain that her luck had come to an end. “I know I won’t get no more cash from them.”