Economy aids welfare reform

Shrinking welfare rolls, rising wages for low-skilled workers and growing production rates - a visiting member of the President's Council of Economic Advisers did her share of grinning when she presented the Clinton administration's interpretation of the state of welfare reform Thursday, March 18, as part of the Wharton School's Gruss Public Policy Lecture Series.

Rebecca Blank, who has spent her career as an economist researching and writing about the interaction between government and low-income families, is one of three members of the Council, charged with recommending national economic policy.

"I haven't gone to someone's talk on this issue [welfare reform] and not seen a packed audience," Blank told people seated in chairs and on the floor, and standing along the back wall of a lecture room in Steinberg-Dietrich Hall.

"Job availability has not been a core problem for the unskilled," Blank said, presenting a rosy picture of the economy. "Of course there are questions about what happens when the economy turns down."

But even that prospect seemed to have little effect on Blank's optimism. "The longer the expansions last, the more permanent the gains."

Blank expressed surprise, if not awe, at the numbers she was reading from the states. At the same time, she was careful not to attribute smaller welfare rolls solely to current economic conditions. "The economy explains only about 20 percent of the decline," she said. "There are some real victories to be claimed but it is too early to judge completely."

The numbers were not the only surprise. "We half-expected states to starve public assistance. I expected the states to do things as usual - choose a sexy new name and then continue. I was wrong. States have made fundamental changes in how they distribute funds and promote new jobs."

Two ways to promote new jobs are with government support of child care and health care, Blank said. "Our child-support system is a horrendous mess," she added.

The one success of welfare reform that Blank praised unequivocally was the Earned Income Tax Credit, which can increase a poor family's annual income by close to 40 percent. "The EITC ... just made it more attractive to go to work."

Front page for this issue | Pennsylvania Current home page

Originally published on April 1, 1999