Economy Credited For Welfare Success

By PAUL SINGER, Associated Press Writer

CLEVELAND (AP) - A drop in welfare caseloads may have had more to do with the strong economy than with new state programs, according to a study based on a review of Cuyahoga County's welfare-to-work program.

Manpower Demonstration Research Corporation looked at case records, surveyed 1,000 welfare recipients in 1998 and 2001 and tracked 40 recipients for several years in the first of four urban counties to be studied. The other studies -- in Los Angeles, Miami and Philadelphia -- are to be completed over the next year.

The report acknowledged that the number of people on welfare in Cuyahoga County has dropped dramatically, and the economic conditions of people who moved from welfare to work have generally improved.

But it also concluded that those trends began in 1992, five years before Ohio overhauled its welfare program. The drop continued at the same rate after the law was implemented, the study found.

Tom Brock, a lead author, said the study shows that people can be moved off welfare without the dire consequences predicted by some opponents of the 1996 federal reform law that set a five-year limit for welfare benefits. But, he added, "The strong economy appeared to be the wind behind the sails of welfare reform."

In 1992, Cuyahoga County had just under 47,000 welfare recipients. That number had dropped to 34,700 by 1997 and to 15,346 as of July. Of those remaining cases, 8,200 are subject to Ohio's three-year time limit on receiving cash benefits.

The study also did an analysis of neighborhoods to determine how welfare changes were affecting the social conditions of welfare recipients.

The New York-based Manpower is a national nonprofit research group focusing on social policies as they affect the poor.

Bette Meyer, deputy director of Cuyahoga's Department of Health and Human Services, said a good economy helped welfare recipients, but she still gives credit to welfare reform.

Meyer pointed out that since MDRC concluded its data collection in 2001, the county's caseload has continued to shrink, even though the local economy is flagging -- an indication that the welfare system works even in a poor economy. But she acknowledges that the rate of decline has slowed.

While the county moved people off cash assistance, 85 percent of those people continued to receive some kind of help from the county and state, such as medical care or food stamps, she said.

Cuyahoga County represents "the best case example of what you wanted to happen in welfare reform," Brock said.

A strong economy produced a lot of job openings for people moving off welfare, and the county created programs to help them make the transition. In the other three cities, while the studies are not yet complete, "We generally saw much less innovation, less seriousness, less steady progress," Brock said.

Nevertheless, welfare caseloads also have continued to drop in those cities, "which lends some support to the notion that the overall economy is more responsible than the individual city programs," he said.

Brandi Johnson, 27, who left welfare for a secretarial job, said Cuyahoga's child care assistance is critical to her success.

Her 3-year-old son and 6-month-old daughter are in full-day care that would ordinarily cost about $500 per month per child. She pays just over $100 a month for both children.

"I don't think I would make it without it," she said.

The county also pays for health care for her children, though Johnson is covered through the law firm where she works.

Demetra Smith Nightingale, who directs welfare research for the Urban Institute, a Washington-based think tank studying urban issues, said economic growth has made it difficult to assess the impact of new welfare policies around the country.

"We know that at least 50 percent of the caseload trend is based on the economy, and it could be more than that," Nightingale said. The exact impact "doesn't play out the same in every locality because the local economies are different."

The general trend, Nightingale said, shows welfare caseloads dropping nationwide in the late 1990s. But "in at least half the states, we are starting to see caseload increases" as the national economy has weakened.

Andrew London, a Syracuse University professor who worked on the MDRC study while he was on the faculty at Kent State University, said the study cannot answer the critical question of how an economic downturn will affect people who have recently left welfare.

Most have taken low-paying jobs with few benefits, London said, and half got jobs that pay less than the national poverty level.

These people may be relying on friends and charities for help, and that help may dry up as the economy sours, London said.

The weak state economy has also forced Ohio to cut funding this year for the county programs that have been helping welfare recipients find work.

(Copyright 2002 by The Associated Press. All Rights Reserved.)