Overview of Welfare Reform

In August 1996, President Clinton signed the Personal Responsibility Work Opportunity Reconciliation Act, creating a new era in social welfare policy. Principal among the reforms was elimination of the Aid to Families with Dependent Children (AFDC) program, replaced with Temporary Assistance to Needy Families (TANF). The act provides states with annual block grants and wide latitude in program development and implementation. While all the states have work requirements, programs vary on time limits, amount of cash assistance and the relationship of work requirements to other programs, such as Medicaid and Food Stamps.

Before and after the law's passage, many debated its potential effects and outcomes. Proponents claim that the changes instituted by the act will be sweeping and positive. They envision more welfare families taking charge of their futures by holding jobs and improving their lives, while states will see drastic reductions in the welfare rolls and, eventually, reduced public spending on welfare programs. Opponents and advocates claim the social safety net has been stripped away and the effects will be overwhelmingly negative-increased poverty, destabilization of families and homelessness. Both proponents and opponents acknowledge that the following issues must be resolved to achieve welfare reform goals:

• The potential job gap, or the difference between the number of entry-level jobs and the number of household heads seeking jobs;
• The potential spatial mismatch, or the difference between the homes of job seekers and the location of employers with entry-level jobs (coupled with high rates of transit-dependency among welfare-dependent families);
• The potential living-wage gap, or the difference between wages paid for entry-level jobs and the wages necessary to lift a family out of poverty and out of eligibility for means-tested assistance.

Regardless of potential barriers to success, the number of people on welfare nationwide has dropped by nearly one-third since the law was enacted in 1996, and by more than 40 percent since 1993. The reduction has been attributed both to continuing rapid economic expansion, reducing families' need for welfare, and the elimination of the entitlement component of AFDC, limiting the welfare incentive and providing a counter incentive to seek employment. Table 1 on the following page provides a summary of the changes in the number of welfare recipients between 1993 and 1998.

As the table illustrates, the number of welfare recipients has declined in all 50 states between 1993 and 1998. In two states, Wisconsin and Idaho, the reduction has been greater than 80 percent. Although the number of welfare cases is declining, increased subsidies for child care, transportation and job training will keep spending at current levels.

State	Welfare Recipients, end of 1993	Welfare Recipients, as of Sept. 1998	% Change in Recipients, 1993 to 1998	Rank by Total Recipients 1993	Rank by Total Recipients 1998	Rank by % Change, 1993 to 1998
Alaska	34,951	28,121	-20%	42	41	47
Alabama	141,746	52,076	-63	28	30	8
Arkansas	73,982	31,412	-58	35	40	13
Arizona	194,119	99,792	-49	22	22	28
California	2,415,121	1,908,534	-21	1	1	46
Colorado	123,308	46,312	-62	29	31	9
Connecticut	160,102	118,066	-26	25	18	43
Delaware	27,652	14,013	-49	47	47	29
Florida	701,842	246,191	-65	5	8	6
Georgia	402,228	172,065	-57	9	11	14
Hawaii	54,511	46,001	-16	39	32	49
Iowa	100,943	62,836	-38	32	25	37
Idaho	21,116	3,285	-84	48	50	3
Illinois	685,508	449,466	-34	7	3	40
Indiana	209,882	117,437	-44	20	19	33
Kansas	87,525	33,447	-62	34	39	10
Kentucky	227,879	112,676	-51	18	20	22
Louisiana	263,338	121,772	-54	15	17	20
Massachusetts	332,044	166,179	-50	11	12	26
Maryland	221,338	108,636	-51	19	21	23
Maine	67,836	37,673	-54	36	35	34
Michigan	686,356	308,817	-55	6	7	18
Minnesota	191,526	141,440	-26	23	15	44
Missouri	259,039	139,475	-46	16	16	32
Mississippi	174,093	45,009	-74	24	33	4
Montana	34,848	19,561	-44	44	44	35
North Carolina	331,633	162,282	-51	12	13	24
North Dakota	18,774	8,227	-56	50	49	15
Nebraska	48,055	36,187	-25	41	36	45
New Hampshire	28,972	14,429	-50	45	46	27
New Jersey	349,902	182,193	-48	10	10	30
New Mexico	94,836	78,176	-18	33	24	48
Nevada	34,943	23,353	-33	43	43	41
New York	1,179,522	862,162	-27	2	2	42
Ohio	720,476	319,912	-56	4	6	16
Oklahoma	146,454	58,044	-60	27	26	12
Oregon	117,656	44,235	-62	31	34	11
Pennsylvania	604,701	345,952	-43	8	5	36
Rhode Island	61,116	54,125	-11	38	27	50
South Carolina	151,026	52,280	-65	26	29	7
South Dakota	20,254	9,120	-55	49	48	19
Tennessee	320,709	148,532	-54	13	14	21
Texas	785,271	346,232	-56	3	4	17
Utah	53,172	27,992	-47	40	42	31
Virginia	194,212	94,431	-51	21	23	25
Vermont	28,961	18,804	-35	46	45	39
Washington	286,258	184,584	-36	14	9	38
Wisconsin	241,098	34,031	-86	17	38	2
West Virginia	119,916	34,995	-71	30	37	5
Wyoming	18,271	1,821	-90	51	51	1
Source: Pew Center on the States, http://www.stateline.org (web-site).