The State of NY's Social Safety Net for Today's Hard Times

Over a Decade Since Welfare Restructuring: A closer Look at the Changes, Opportunities, Limitations and Current Day Needs

Key Points of the Report:

In economic hard times, more people will need to access the weakened social safety net. Now is the time to reduce barriers to access and strengthen that system so that people facing overwhelming financial hardships can access benefits and get back on their feet.

1. New York’s welfare safety net needs to be mended to meet the current economic crisis.

• Welfare restructuring over the past decade has made it difficult to access public assistance.
• Despite a 35% increase in the number of applications comparing the years 1999 and 2007, the number of people receiving welfare decreased by 45% during that time period.
• New York City applications increased from 221,895 applications in 1999 to 341,635 in 2007, a 54% increase. The Rest of State saw a 13% increase.

2. Two factors contributing to the decline in caseloads since welfare reform are the increased rates of application denials and withdrawals in both New York City and statewide, despite an increase in overall welfare applications.

• The public assistance denial rate jumped from 26% in 1999 to 42% in 2007.
  
  • The Rest of the State had consistently higher denial rates than NYC, increasing from a denial rate of 34% in 1999 to 55% in 2007.
  • The vast majority of the denials were based upon non-compliance issues and for reasons other than financial or residence issues.
  • In 2007, 70% of New York State's and 50% of New York City's denials were based upon compliance issues.
• The public assistance case withdrawal rate in NYC increased 17% between 1999 and 2003.
  • Between 2004 and 2007, an average of 23% of applicants for public assistance stopped pursuing their application process.
• There have also been other government agency barriers to accessing benefits: long wait lines, agency mishandling the processing of client cases, and the sanctioning of clients.
• The various factors cited above have likely contributed to the welfare caseload remaining relatively flat in these recessionary times.
• Despite dramatic job losses, the public assistance case load in New York State has barely moved, going from 266,474 Temporary Assistance cases in December 2007 to 269,258 cases as of December 2008.
• This was similar to NYC where the caseload went from 182,537 to 182,823 cases between December 2007 and December 2008, but HRA reports that approximately 30% of the increase was due to special one-time payments that were issued in connection with the settlement of a lawsuit. Even with this increase, the cash assistance caseload declined by 6,600 individuals in 2008, representing nearly a 2% decline.

We are calling on the Governor and the Mayor to move the welfare agencies from divertive and punitive policies to one of access and fair treatment of clients. These leaders should also move quickly to create jobs for the unemployed in growing fields such as green jobs.

Though welfare reform’s goal was self-sufficiency, its implementation in New York has largely led to financial hardship, low-wage employment, and a return to welfare.

1. The new sanctioning system under welfare reform impacted many families and led to increased hunger and homelessness as people's benefits were cut and cases were closed.

• New York City currently has a quarter of its engageable caseload sanctioned or going through the sanctioning process.

3. Adult literacy programs saw a drop from 14,369 students receiving welfare in 1995 to 3,331 students in 2000

4. Even those who were successfully placed into jobs were earning very low wages. In New York City, the average wage of welfare recipients was $8.30/hour in 2007. The statewide average wage was $8.50/hour.

5. Many have had to return to welfare. Between 2003 and 2008, between 21% and 30% of New York’s closed public assistance cases were individuals who had left public assistance for greater than one month, and then returned to full public assistance status.

6. Despite the low wages and small percentage of job placements, and despite the Return on Investment of vocational training and education, New York has struggled to improve its outcomes.

• Though the federal law allows up to 30% of the participating wel­fare caseload to be in vocational education, NYS has only 9% of the TANF population in this activity, and only 14% of the population is engaged in any type of education and training activity.
• Despite OTDA (the state welfare agency) requiring all local social services districts to increase the numbers of welfare recipients engaged in education and training by 20% by January 2009, there was a 563 person drop in the number of NYC welfare recipients in vocational education/job skills training (a 162 person drop statewide) between September 2007 and November 2008.
• Limiting access to education and train­ing is bad public policy because, simply put, it pays to get an education. The average wage for someone without a high school/GED degree is $22,256, whereas with a high school/GED degree it is $31,408, with an associate’s degree it is $38,480, and with a B.A./B.S. it is $51,324.
• Access to education and training increases earnings and tax revenues, while decreasing the costs associated with public benefits a great return on investment. For example, by supporting a welfare recipient's participation in an associates degree program, the cumulative 10-year value of this investment for a single parent with two children would be approximately: 1) earnings for the individual of $307,000, and 2) tax revenues to the state of $9,800. Moreover, the state would save $460,000 in reduced expenditures on public benefits, including public assistance, food stamps, child care, and Medicaid.

In these times of high joblessness, the state should focus on providing vocational training and job re-training for the unemployed, including welfare recipients.

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