From 2000 to 2010, the work participation rate for work-eligible households receiving aid from the Temporary Assistance for Needy Families (TANF) program declined by 5 percentage points.
Figures for 2008-2010 include TANF and Separate State Program-Maintenance of Effort (SSP-MOE) work participation.
Source: U.S. Department of Health and human Services, Administration for Children and Families.
The nation’s work participation rate for cash welfare recipients is not only on the wrong track, it appears to be off the track. Or maybe it would be better to say the nation has lost the track. Any way you look at it, it is not good.
But first a little background: The Temporary Assistance for Needy Families (TANF) work participation rate is the percentage of adult “work-eligible” recipients of federally funded cash welfare who are working or engaged in some work-like activity for at least 30 hours a week.
Work-like activities can include searching for a job or participating in a workfare program or even volunteering at a community-based nonprofit. When the historic welfare reform act passed in 1996, the participation rate had a very important purpose: holding states accountable for enforcing the legislation’s work requirement. Failing to meet a fairly high standard for work participation would lead to significant fiscal penalties—and trust me, as someone who ran a state welfare agency, states pay close attention to fiscal penalties.
Because of this threat, welfare reform was not, by any measure, a free block grant to states. The federal grant of funds mandated that states require recipients to work or engage in work-like activities. Cash welfare was no longer an entitlement, but assistance with responsibilities for the client.
But, as with all things government, there existed then—and even more so today—a host of caveats, exceptions, special breaks, and avoidance techniques for states to get away with underperforming. The legislation set, for each state, the explicit goal of a 50 percent work-participation rate; falling below that bar meant the state would incur a financial penalty. But because of these caveats and other exceptions, only a few states achieve the goal—and many fall well short. Yet, according to the most recent report to Congress from the Department of Health and Human Services, no state has failed compliance since 2004.
There is some good news: The total number of TANF recipients has fallen significantly from the peak years of the early 1990s—the numbers are down from more than 14 million to about 4 million. This decrease is partly the result of work requirements prompting potential recipients to not even bother with welfare—they decide to just get a job. It is true, however, that many former cash welfare recipients receive benefits from other government programs—Medicaid or food stamps, for instance—that do not contain a strong work requirement.
Despite the drop in overall cash welfare recipients, the nationwide work participation rate for the remaining recipients has failed to rise above 30 percent since 2006. And the federal oversight agency tasked with enforcing this core component of welfare reform has shown little interest in pursuing this objective. Consequently, regarding the TANF work rate, we are not only on the wrong track, but off the track. An important federal policy has lost its way. Restoring the original purpose of welfare reform requires reinvigorating the work-participation rate.
Read Robert Doar's article at The Heritage Foundation here
Robert Doar is the Morgridge Fellow in Poverty Studies at the American Enterprise Institute and former commissioner of New York City’s Human Resources Administration.