As Congress debates reauthorization of the 1996 federal welfare reform law, the temporary cash welfare system is not responding to the current recession as effectively as it did in the last recession ten years ago, according to a report released today by the Oregon Center for Public Policy. Compared to the need, the report finds, the welfare safety net in Oregon has shrunk.
“During a recession, Oregonians with children who have lost their jobs and lack unemployment insurance look to the Temporary Assistance for Needy Families program as a safety net to stabilize their families until better times arrive,” said Mike Leachman, a policy analyst and the study’s co-author. “Compared to the last recession, state welfare policy and practices are forcing many more poor and unemployed Oregonians to get by without temporary assistance.”
The report finds that, compared to the number of Oregonians who are out of work, the number of temporary welfare cases is substantially smaller than during the previous recession of the early 1990s. The total number of welfare cases during the previous recession hovered between one-third to one-half the number of unemployed. Today, by contrast, the temporary assistance caseload equals just 11 percent of the unemployed.
The report by the Silverton-based, non-partisan policy research institute also finds that the caseload declines associated with welfare reform generated no discernible impact on the percentage of workers in Oregon who are receiving unemployment insurance to help them through the recession. “Unemployed workers are no more likely to be receiving unemployment insurance in this recession than during the last one, in the early 1990s,” said Chuck Sheketoff, OCPP’s executive director and the study’s other author.
“On average over the course of 1991, 54 percent of the unemployed received unemployment insurance payments. By comparison, on average during 2001, 53 percent received unemployment insurance,” Sheketoff said. “This is an indicator that the welfare system has failed to put unemployed parents into stable jobs that earn enough to qualify for unemployment insurance.”
The report also found that in 1999-2000 just 10 percent of poor Oregonians received welfare assistance. By contrast, prior to welfare reform in 1989, the figure was 25 percent. In 1979, prior to program restrictions installed during the Reagan Administration, the figure was 39 percent.
“When families leave welfare for work, they ought to be able to escape poverty. Congress should improve the temporary assistance program so that it helps recipients find jobs that pay enough to cover basic expenses,” said Leachman. “The current program does not allow unemployed workers to get training or education leading to stable jobs that pay a decent wage.”
Leachman noted that, as the recession began, about 14 percent of working families with children, or one out of seven, were still poor despite their work effort, up from about 7 percent in the late 1970s.
“Oregonians have to be poorer today to receive cash assistance than in the recession of the early 1990s,” said Sheketoff. ” Welfare reform took away states’ entitlement to extra support from the federal government during recessions, and Oregon’s new system imposed new roadblocks to receiving cash assistance. ”
“The temporary assistance program no longer focuses on placing people into good jobs. The ‘take any job’ strategy has cut the welfare caseload while the need for help has not been reduced,” said Sheketoff.
“Thanks to Oregon’s welfare reform strategy, today’s safety net does less to help impoverished families than in previous recessions,” said Sheketoff. “The temporary assistance program added about 2,600 recipients over the first 14 months of the current recession. At the same point in the last recession, nearly 4,000 recipients had been added, even though that economic downturn was weaker than the current one.”
In eight Oregon counties, the report finds, the number of welfare recipients continued to decline over the first 14 months of the economic downturn, even as the number of unemployed in each county climbed. Those eight counties – Baker, Columbia, Coos, Grant, Jefferson, Umatilla, Wallowa, and Yamhill – saw a combined decrease in welfare recipients of 16 percent, while their combined unemployment grew 92 percent.