Jared Bernstein: If we were really debating Welfare-to-Work, we’d be talking about jobs

Updated
Jared Bernstein
by Jared Bernstein

COMMENTARY

Mitt Romney’s welfare reform attack ad has by now been thoroughly rebutted. The President has a consistent record of being pro-work on welfare—I don’t believe anyone’s ever heard him say anything to the contrary. So hopefully, this little bit of gotcha will soon fade.

But I’m here to make a different point about this latest kerfuffle, one that’s been overlooked but shines some relevant light on candidates’ policy positions on the issue of welfare reform.

Welfare-to-work doesn’t work without jobs. So if you want to evaluate the candidates or the parties based on how committed they are to work-based welfare, check out their commitment to helping low-income parents find jobs.

It sounds terribly obvious, I know, but if you pay any attention to this debate, you know that this simple reality is constantly overlooked.

 

It is widely agreed upon that work requirements should be part of programs that provide cash assistance to poor, typically single-parent families. And when this became law in the mid-1990s, the employment rates of poor single mothers grew to record high levels, leading many to proclaim the reform a great success (see figure here).

But it’s now clear that work-based welfare only works when the push of work requirements is met with the pull of a full-employment job market. Such conditions prevailed in the 1990s but they haven’t since. In their absence, the welfare program actually performed quite poorly in the Great Recession, failing to respond as vulnerable families lost what work they had.

In other words, policy has taken a countercyclical program and made it procyclical. Work-based welfare only works when there are lots of jobs for low-wage workers.

Of course, you won’t have gotten any of this from the debate over the Romney ad. Embedded in both the ad and the ensuing debate is the supply-side assumption that all you have to do is insist that people work as a condition of getting benefits and they will. Under that assumption, even providing states more flexibility to streamline their welfare-to-work programs becomes a violation of the principles of reform.

The larger issue here is one that I’ve seen time and again when it comes to economic policy. Conservative like Romney and Paul Ryan see a job market with one side—the supply side. So their policies reflect their conviction that all it takes to get a job is to want a job—with the obvious implication, apparent in that ad, that those who lack jobs are just plain lazy.

But to understand the potential and pitfalls of work-based welfare policy, you must understand the demand side of the market as well. Here, the reality is quite stark. For years now—since the early 2000s, in fact—the economy simply hasn’t produced enough low-wage jobs to generate the work and wage opportunities that low-income families with kids need to get ahead.

As a result, we’ve seen the high employment rates noted above fall from their late-1990s peaks and come down further in the recession (again, see the post-2000 trend in the figure here).  In this weak demand climate, the only reliable way to help welfare recipients get back to work is to actually help them do so. 

For example, read about the TANF-subsidized jobs program that was part of the Recovery Act, a successful welfare-to-work initiative even in the midst of the Great Recession, with excellent bang-for-buck in terms of job creation. Also, as I explain here, work supports like help with child care and transportation are essential for helping low-income, single parents get and keep jobs.

Now, ask yourself, if we were actually debating welfare-to-work as opposed to playing phony gotchas, wouldn’t these initiatives be planks of the Republican platform?

 

Jared Bernstein served from 2009 to 2011 as chief economist to Vice President Joe Biden, and as a member of President Obama’s economic team. He is currently a Senior Fellow at the Center on Budget and Policy Priorities, and an msnbc contributor

Welfare, Mitt Romney and Barack Obama

Jared Bernstein: If we were really debating Welfare-to-Work, we'd be talking about jobs

Updated