View Point

Friday, February 19, 1999

Welfare reform
should help, not be
a handout

Other states have successfully
reduced welfare dependency;
Hawaii can do it, too

By David A. Pendleton


Welfare reform is more compassionate than the status quo and is working in other states. Fewer people are dependent on the government and more are independent. To maintain the status quo in Hawaii is to deny that we can do better with helping the less fortunate.

Lack of work and the ensuing poverty that separates individuals from mainstream society in Hawaii has been dealt with, to date, by the Legislature simply increasing temporary handouts. Families have become trapped in a welfare system that prevents productive labor and discourages economic self-sufficiency.

We must devise a welfare strategy that is both compassionate and wise, one which will be a hand up -- not simply a handout.

Research suggests that access to a welfare check can strongly influence a woman's decision to have more children, regardless of her marital and/or financial situation.

As of 1996, the national average for combined benefits of unmarried mothers with two children was between $8,500-15,000, available as long as the mother remains unmarried. This is an inherent, albeit unintended, incentive of welfare programs to discourage marriage.

A second way welfare seduces low-income, disadvantaged individuals and/or families is the amount of benefits awarded each year.

In a 1995 study by the Cato Institute, Hawaii gave the highest total level of welfare benefits of any state: equivalent to $36,400 before taxes or over $18 an hour. That is more than three times the minimum wage and higher than any entry-level position. When benefits are so great from the state, why leave welfare?

Hawaii needs an innovative plan, though not necessarily an original one. We can learn from the successes of other states at reforming welfare.

Wisconsin was the first to institute comprehensive welfare reform in 1996, by implementing programs that "reinforce behavior leading to independence and self-sufficiency."

Its goal was unsubsidized employment, allowing applicants to qualify for governmental aid through three categories of work: subsidized trial jobs, community service and a transition category reserved for those absolutely unable to work.

Food stamps, medical assistance, child care and job access loans were contingent upon work or participation in job-training programs.

Under Wisconsin's "Pay for Performance" policy, when a welfare recipient performs the prescribed number of hours of work or attends the required training, then a proportionate share of welfare benefits is provided. With less than perfect attendance, a proportionate share of benefits is withheld. The goal is to teach job skills and the lesson that "only work should pay."

When these standards were implemented in Wisconsin, members of the poverty lobby decried the measures as "hateful" and "Draconian." Today, the results provide a compelling and eloquent rebuttal.

By requiring work or other constructive activities of recipients, Wisconsin's Temporary Assistance to Needy Families (formerly the AFDC) caseload has dropped by 81 percent. The nation as a whole has seen a mere 6 percent reduction.

Tennessee's "Families First" program has succeeded in getting 5,800 recipients off welfare, and Mississippi has had a 30 percent reduction in applications by requiring recipients to demonstrate that they are actively seeking work.

According to the U.S. Department of Health, Hawaii was the only state in the entire nation to add to its welfare rolls, growing at a double-digit rate in recent years.

Critics of welfare reform have dismissed Wisconsin's innovations, attributing the reduction to a booming mainland economy. However, the strongest national economy has never had a fraction of Wisconsin's impact on welfare dependence.

Another fear was that Wisconsin reforms would raise overall welfare costs over the long term, but spending on AFDC/TANF benefits, administration, day care and training has dropped some 15 percent while nearly doubling in the rest of the nation. Adjusted for inflation, Wisconsin's total welfare costs are, in fact, down by 30 percent.

The responsibility for working people off welfare rests as much on the government's shoulders as on that of individuals.

Welfare was supposed to be a safety net, not a way of life. Unfortunately we have inadvertently trapped our most needy into cycles of hopelessness and despair from which they cannot on their own escape.

It is time we acknowledge the inappropriate incentives and disincentives in our present system, and craft a welfare system that will empower those whom we have for too long relegated to a "permanent" welfare class.

Genuinely compassionate welfare reform will require a commitment from not just government, but businesses, churches and community groups to be involved with welfare recipients as business partners, loan guarantors or providers, mentors, job trainers and child-care volunteers.

Much has been said about the need for jobs and capital in Hawaii's faltering economy. Stimulating our economy and creating jobs are certainly the best welfare program government can support. But until that happens, everything must be done to create a welfare system that truly helps those in need.

Rep. David A. Pendleton, R-50th District, serves
on the Human Services and Housing Committee
and as minority floor leader.

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