State Welfare Reform for Employable General Assistance Recipients: The Facts behind the Assumptions

Abstract

More and more states are choosing to eliminate, reduce, or time limit their general assistance (GA) programs for their designated employable populations. Many governors and legislators believe that to motivate this population to find work, they must either eliminate or place time limits on general assistance. Additional assumptions are that a significant portion of this population is employable and that jobs exist if unemployed people only make the effort to search them out. In 1982 Pennsylvania was one of the first states to lower general assistance costs by limiting the benefit period for its employable population to 90 days in any 12-month period. In 1991 and 1992, 22 states reduced or eliminated their GA programs (Gold, Lav, Lazere, & Greenstein, 1992). These legislative changes included discontinuing cash assistance for employable people, limiting the benefit period, or reducing the level of benefits. These reforms were the impetus for numerous studies on the effects of the legislation on former GA recipients by government and academic institutions in Pennsylvania, Michigan, and Ohio. This article discusses the results of these studies in terms of the diversity of the GA population, availability of employment, barriers to employment, and effects of GA reductions on human services agencies. Diversity of the GA Population The public impression of GA recipients as men in their twenties who have trouble keeping a job ignores about 75 percent of the population (Kossoudji, Danzinger, & Lovell, 1993). This fact is verified by other studies (Coulton, Verma, Rowland, & Crowell, 1992; Stagner & Richman, 1988) that found that GA recipients came from a wide variety of backgrounds. In these studies, 30 percent had previously worked in a full-time job before applying for general assistance, and 16 percent had received either unemployment compensation, Aid to Families with Dependent Children, or disability benefits. Availability of Employment The belief that a significant number of individuals who lose general assistance benefits will find employment is not borne out by the facts. Studies conducted in Pennsylvania (Commonwealth of Pennsylvania, 1984), Michigan (Hansen, 1992), and Ohio (Coulton, Crowell, & Verma, 1992) indicated that over 80 percent of the GA population did not find work. Motivation In Michigan welfare dependency stemmed not from lack of motivation but from inability to find employment that would provide a decent living (Kossoudji et al., 1993). Another study (Coulton, Verma, et al., 1992) indicated that most GA recipients wanted to work. The studies demonstrated that lack of motivation and desire to work were not the problem (Howe & Waller, 1993). Rather, other factors influenced whether GA recipients were able to find jobs. Unemployment Rates Increases in the GA rolls correlated positively with increases in unemployment rates Richmond, Nazar, & Douglass, 1983). Some of those on general assistance had previously collected unemployment insurance. For some, GA became the unemployment insurance of last resort. One study of the GA population in Chicago (Stagner & Richman, 1986) indicated that 16 percent had collected unemployment insurance before applying for general assistance. The average time between conclusion of the last full-time job and the initial GA interview was 19 months. Most former recipients were less employable 15 months after termination of assistance than they were immediately after termination of employment (McDonald et al., 1993). Insufficient Earnings The earnings reported by those who found work were not enough to allow them to become self-sufficient. In Ohio average wages were between $5.00 (Coulton, Crowell, et al., 1992) and $5.50 per hour (Howe & Waller, 1993), and in Michigan the average hourly wage was $4.40 (McDonald et al., 1993). …