The Truth About Wisconsin’s Welfare Reform

Wisconsin’s dramatic reduction in welfare rolls is starring in today’s congressional hearing on poverty. But what happened to all of the families that left? Follow-up studies show that they remained trapped in low wage jobs that don’t pay enough to lift them out of poverty. From Disciplining the Poor:

The best case scenario for poor families should have emerged where a celebrated TANF program operated in a thriving economy. The W-2 program in Wisconsin, for example, has been hailed as the most successful TANF program in the country (Mead 2004a), and in the late 1990s it pushed clients toward jobs in an unusually strong economy. How did these exiting clients fare? A study by the state’s Legislative Audit Bureau found that program leavers in 1999 earned an average of just $8,306 during their first year out (with 81 percent below the poverty line) and an average of only $11,577 on their fourth year out (with 73 percent below the poverty line); their most common job placement was with a temporary help service (Schultze 2005). A more in-depth study has recently described the resulting hardships for women and children in rich detail, concluding that the W-2 program is little more than a “downward mobility machine churning workers to the bottom of the labor market” (Collins and Mayer 2010:123). But with caseloads disappearing and work rates up, the W-2 program has repeatedly won federal accolades and high-performance bonuses, and its officials have been consulted by reformers around the globe who hope to recreate the “Wisconsin Miracle” (Mead 2004a)

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