Sunday, October 14, 2001
HAWAII'S recovering economy last summer had given new hope to Jaime's family but their struggle to leave the welfare rolls took a plunge with the Sept. 11 terrorist assault on the East Coast.
In six short weeks, 818 Hawaii families will lose their welfare benefits. They are only the first island families who, in the coming months, will reach the end of their eligibility for benefits under the 1996 federal welfare-reform law. Many of them will join the throngs of unemployed or underemployed who have been struggling since the Sept. 11 terrorist attack struck at the heart of Hawaii's tourist economy.
By Lee Catterall
lcatterall@starbulletin.com"It was hard enough to get jobs before the terrorist attack, and now it's even worse, so many people got laid off," says Jaime, who works as an administrative assistant at a nonprofit organization in Kaneohe but whose husband is unemployed.
Jaime's family is among Hawaii's more fortunate welfare recipients. On Dec. 1, the safety net will disappear for 818 families who will have exhausted their lifetime limit of five years of welfare payments, a key ingredient of the 1996 federal welfare-reform law. Hundreds more face similar cutoff dates in the following months and their grim prospects have been made worse by the sharp decline in Hawaii's economy.
Jaime remembers the five-month period last year when both she and her 35-year-old husband were out of work and she gave birth to their daughter. They survived on $565 in monthly welfare payments and $300 in food stamps.
SHE FINALLY got a $5.50-an-hour job late last year at a convenience store and in June was hired by the nonprofit organization at $8 an hour. Under a welfare program, the nonprofit is compensated by monthly payments of $650 for employing Jaime.
Jaime's family also receives $250 in food stamps and $250 in child-care payments to Jaime's mother-in-law, who cares for their daughter.
Her husband recently completed training to receive his trucking license but remains idle. "He's been trying for two months," Jaime says. "He's had a couple of interviews, but nothing else." Their second child is due in January, and Jaime now expects the family to be forced to leave the state where both she and her husband were born.
"If he doesn't get a job after our baby is 3 months old, we're planning to move to Arizona," she says. Her parents moved to Arizona several years ago, and they have urged Jaime and her husband to make a similar move.
That might be risky. Arizona's economy has taken a downturn over the past year and its welfare rolls have increased by 20 percent. Across the country, an economic slowdown was causing concern about welfare time-limits even before terrorists struck their blow.
"I don't know what's going to happen," says Kristine M. Foster, administrator of the state Department of Human Service's financial assistance program. "I really can't tell. It's hard to anticipate, but it makes me nervous."
BEFORE ENACTMENT of the welfare-reform law, poor, single mothers had an open-ended eligibility for cash benefits. Under the new law, no one in most states, including Hawaii, can receive a monthly welfare check for more than five years in a lifetime except in hardship cases. Some states, most notably Wisconsin under the governorship of current U.S. Health and Human Services Secretary Tommy Thompson, imposed even shorter limits.
In those states with earlier cutoff dates, about 40 percent of the former recipients who were forced off the welfare rolls are not working, leaving welfare officials wondering how they are surviving.
President Clinton had campaigned in 1992 on the promise to "end welfare as we know it." The legislation enacted four years later was based more on a Republican plan, without Clinton's proposal to include an entitlement to a public job after the time limits on benefits were met.
Since then, the number of welfare recipients has declined nationally by more than half, and conservatives have celebrated for having broken what they regarded as a culture of dependence on welfare. However, while the welfare rolls plummeted in the first few years of the new law, Hawaii's rolls ballooned.
"WE DID NOT SEE a decline in welfare cases with the initiation of welfare reform, and it was a result of the economy," says Foster. "We have measured this for years, and the only thing that affects the size of our case load is the unemployment rate. There is a direct correlation."
A 1 percent rise in unemployment translates into a 5 percent increase in welfare rolls for single mothers and a 10 to 15 percent rise for married couples, says economist Rebecca Blank, dean of the Gerald R. Ford School of Public Policy at the University of Michigan.
Nationally, critics of the five-year limit point out, welfare case loads had begun falling in 1994, two years before welfare reform was adopted, because the mainland economy was flourishing. The nation's unemployment rate fell from 6.9 percent in 1993 to 4 percent in 2000.
In Hawaii, locked in an economic slump in the mid-1990s, the case load was rising, reaching a peak of 23,528 families in July 1998. By this past July, the case load had dropped to 18,148 families. During that three-year period, the state's unemployment rate gradually fell from 5.9 percent to 4.2 percent.
Trends usually are revealed in the welfare rolls before becoming evident in the unemployment rate.
"What we know historically is that our people go into entry-level positions, and when companies downsize, they're the first ones to go," Foster explains.
They have not worked at the job long enough to qualify for unemployment compensation so return to the welfare dole.
However, since Sept. 11, Foster has seen from her office window long lines of people extending outside the Department of Labor, applying for unemployment compensation, while welfare rolls have remained steady.
"WE'VE NEVER HAD this kind of crisis, where enormous numbers of people are laid off at one time, and there was no prediction," she says. "These are people who always worked, who had salaries. They need this support, and that's what the governor is looking at, expanding that." Gov. Ben Cayetano has proposed a 13-week extension of jobless benefits, now limited to 26 weeks.
Foster says her hope is that before those being laid off now have used up their unemployment benefits, the economy will be back on its feet and they will have rejoined the work force. If that happens, the size of the welfare rolls may not be greatly affected.
In the meantime, however, those forced off the welfare rolls may find it difficult if not impossible to find jobs, and their safety net will disappear.
The 818 families in Hawaii who will have reached their five-year limit on Dec. 1 will be followed by 415 families on Jan. 1 and 395 on Feb. 1. After that, Foster says, an average of 250 families a month will be made ineligible by the five-year law. Those families will continue to qualify for food stamps, medical care and child-care payments but will no longer be entitled to cash payments or employment supplements.
The large number of families who will lose eligibility next month and many facing similar deadlines in subsequent months are "not a representative group," Foster says. Most welfare recipients are on the rolls for a relatively short time, take advantage of job-training and other services made available to them and then find employment. The December group is comprised entirely of families who have remained on the welfare rolls every month for the past five years.
NEARLY 500 of those facing the December deadline have some income, supplemented by welfare payments.
"Our biggest concern is that the 300 left have no other income," Foster says. "We have contacted each one of them individually. We've written to them, we've called them, we've invited them into other programs. The majority have no response."
Her concern is heightened by the knowledge that welfare families average two children per family.
"That's 600 children out there without any (family) income, and I don't know what to do with them," Foster says. "I don't know how you absorb that kind of population."
Some families may be in a denial stage.
"Everybody's known about it," Foster says. "We've really made an effort to go out and publicize it. But I think it was one of these it'll-never-happen or it's-so-far-away-I-don't-have-to-worry-about-it, and now all of a sudden it's a real concern."
Foster says she was excited about the welfare-reform legislation, which resulted in massive increases in aid to the working poor. Various programs encouraged people to seek jobs or further their education so they would become more employable. Under the old welfare system, many people found that remaining on welfare was more economical than accepting low-paying jobs.
"That part of it was really exciting, really, really amazing to watch," Foster says, and welfare reform was much more successful than she had expected. The only part of welfare reform that she dislikes is the five-year lifetime limit.
"I hate the idea of there not being a safety net," she says. "That really frightens me."
