Policy Perspective on Welfare to Work
When Help Helps

By Dan A. Lewis

Summer 2003, Volume 25, Number 1

For decades, legislators and scholars were baffled by the paradox of helping the poor. If we give handouts, we reward need, which makes it more attractive to seek help. In the process, we undermine self-reliance. How do we lend a helping hand without creating dependency?

The answer, Illinois has discovered over the past five years, is that you tie the help to work. If we reward those who work with assistance, then we help those who are helping themselves. This makes the recipient and the giver—the taxpayer—happy. Latching on to this solution is no small matter, for it makes helping, which has been equated with big government and wasteful spending, politically viable.

Illinois’ current welfare system succeeds with the needy and the taxpayer alike, and should be preserved, if not expanded.

Financial support, child care benefits, health insurance, even tax relief, follows those who go to work. Incomes rise and, equally important, hardships fall. The gains we have witnessed in the lives of the poor over the past five years have been significant. And welfare rolls have dropped by more than 80 percent.

The latest findings of the Illinois Families Study, which followed more than 1,100 families to determine how they fared under welfare reform, reveal the material and psychological benefits of work for those families who were surveyed. Annual earnings had increased, on average, to $14,145 in 2001, up from $7,485 in 1998. Fifteen percent of working respondents had such work-related benefits as employer-provided health insurance in 1999. By 2002, that had risen to 27 percent. More than three-quarters of those who were in the group that was working reported stable levels of job satisfaction. Homelessness had dropped from 7 percent to 2 percent.

In addition to material benefits, these families feel better, mentally and physically. A little more than 80 percent of adults surveyed reported they were experiencing “good” to “excellent” levels of health, and this number rose to 96 percent for their children. Depression also seems to have declined. Those adults reporting depressive symptoms fell from 24 percent of the total in 1999 and 2000 to 18 percent by 2002.

Further, the latest findings reveal that despite the economic downturn, those who are on welfare and working, or have left the welfare rolls to work, are holding their own. Congress and the states gave most aid recipients a deadline to find jobs and get off welfare. Illinois enacted a 60-month lifetime limit on welfare assistance, with some exceptions and provisions to “stop the clock.” Since then, we have seen that greater numbers of the poor are going to work, that work does pay, and, most important, that those on welfare want to work.

In 2002, 95 percent of the survey’s respondents agreed to some extent that “it is a good idea to require people on welfare to work.” Welfare, however, only “works” if it supports those who are working. It sounds like a lot to say that average annual income for these families has doubled in three years, but $14,145 is still below the poverty line for a family of three, and 67 percent of families in the survey were still living below that line. Small gains have been made in health care benefits for children, while health care benefits for adults have remained steady.

Welfare support is one area that still needs a vast amount of improvement and investment. Illinois’ welfare program has experienced some success in helping these families, but most of the families still worry “a lot” about having enough money in the future. So where does that leave us in light of the state’s fiscal crisis?

Illinois faces a $5 billion deficit that requires massive cuts in the state budget. We see little chance of help from the federal government, and Gov. Rod Blagojevich has clearly said he will not support higher state income and sales taxes. The question is, Where will the cuts be made? Will they dig into child care subsidies and decimate Medicaid?

The success of Illinois’ welfare reform over the past five years cannot be ignored, and the governor has clearly grasped a key to its success: Work supports help those who are helping themselves through work. Despite the decrease in the assistance caseload, the governor is doing the right thing in recommending an increase of approximately $49 million in child care subsidies, bringing the total to $538 million for fiscal year 2004. More would be better, but we should be happy for what we can get. Increasing work supports will help those mothers and fathers who have left the dependency of welfare and who are working hard to raise their children and to put food on the table.

Having found a way to reward work, let’s not balance the budget on the backs of the poor. We must do all we can to help these mothers and fathers continue in their roles as good parents and productive citizens. We should not undermine that effort. Despite calls for a higher minimum wage in Illinois, we aren’t willing to challenge, in any substantial way, the low wages that those with few skills and little education earn, so we must continue to find ways to make work pay through government programs.

Illinois has developed such a system. A dollar spent by the taxpayer to reward work creates another dollar in earned income for the person we have helped. That is the kind of payoff we want to keep getting—especially when times get tough.

We can only hope that Congress and the president will understand that this payoff can work when it comes to reauthorizing welfare reform at the federal level.

Dan A. Lewis is an IPR faculty fellow, professor of education and social policy at Northwestern, and the director of the University Consortium on Welfare Reform.

This article originally appeared in the June 2003 issue of Illinois Issues.