Breaking the Cycle: Welfare Reform in Minnesota
[Sorry, the video for this story has expired, but you can still read the transcript below. ]
KATHERINE LEE: May I help you? Did you guys see where you’re going? Did they switch your gate over?
CONSUMER: It’s gate two?
KATHERINE LEE: Okay.
FRED DE SAM LAZARO: In the often frenzied, unfriendly space at the Minneapolis/St. Paul Airport, Katherine Lee manages to bring rides and smiles.
KATHERINE LEE: I like to meet people, I’m a people person, and I have a great attitude with people.
FRED DE SAM LAZARO: However, it wasn’t until 1998 that the 41-year-old mother of three brought her people skills to the job market. And it took some coaxing from the welfare system. Welfare reforms in the ’90s forced millions to find work, as state after state trimmed welfare rolls and budgets, and restricted lifetime benefits, usually to no more than five years. (gavel bangs )
SPOKEMAN: The House will come to order.
FRED DE SAM LAZARO: Minnesota lawmakers took a less punitive approach. With bipartisan support and a booming economy, it actually increased spending for a program called Minnesota Family Investment, or MFIP. This year, an exhaustive study shows the move paid off. Not only have MFIP clients gotten jobs, they’ve proven far more likely than people from the old welfare system to hang on and even thrive in them and even try.
KATHERINE LEE: I started off as a wheelchair aide, and I got a certificate for being the best wheelchair aide. I boosted my way up to being a supervisor. And now I’m a service manager and I run the gold concourse.
KATHERINE LEE: You going to luggage? Straight on down, straight on down.
FRED DE SAM LAZARO: The key to happily- ever-after stories like Katherine Lee’s appears to be the way Minnesota has dealt with the welfare-to-work transition. As in other states, it’s mandatory to find a job, but in Minnesota recipients can hang on to their welfare benefits until their overall pay reaches 140% of the poverty line. Job counselor Tom Bates says it’s a generous departure from the old system in which going to work meant losing welfare benefits.
TOM BATES: You could go out and get a job at $6 an hour, $6.50 or whatever, and stay in the same dumpy apartment with the same jalopy of a car, if you had a car at all. And your life really didn’t improve. It was just a big hassle. “Why should I do this? I can sit home and go broke; I don’t have to go to work to go broke.” I think we’ve changed that in the state of Minnesota. It pays to go to work.
FRED DE SAM LAZARO: To help families transition out of welfare, Minnesota’s program goes farther than most states in providing job placement assistance. It includes health care and child care. Help is available with bus passes, car loans, and farther down the line, even home mortgage programs. But Bates says the extra income right off the bat is the biggest incentive
TOM BATES: And we’re not talking a lot of money here. We’re talking about if a person can go out, take their family to a movie and get a pizza on Friday night, that’s a huge improvement over some of the things that’s going on in their lives now — they have no place to go, they have no money to do anything with, and it’s a struggle.
FRED DE SAM LAZARO: Katherine Lee says that struggle is behind her, and proclaims her independence from welfare.
KATHERINE LEE: I don’t need anything. I started here back in ’98, I met my husband on the pier. That was the best thing that happened with me — got married.
FRED DE SAM LAZARO: It may be the best thing that happened in welfare reform. The study found MFIP clients were 40% more likely to marry or remarry than people in the old welfare system, which Minnesota Human Services Commissioner Michael O’Keefe says tended to break up families because single mothers received higher benefits.
MICHAEL O’KEEFE: It’s almost the Holy Grail of welfare reform to have discovered a program or design that corrected one of the huge shortcomings of the old welfare system. It comes down to common sense. Yes, if you ensure that they have a stable source of income, can feed their kids and can have stability in that family, that the family stays together, it’s more stable, the kids do better in school.
FRED DE SAM LAZARO: And O’Keefe said that stability is the best hope for breaking the multi- generation cycle of chronic welfare in families, like the one in which Katik Splitstoesser grew up.
KATIK SPLITSTOESSER: My mom was left with three children to raise and she just couldn’t handle it. It wasn’t her thing; it wasn’t her cup of tea. She left me with her aunt, my great aunt. And my great aunt handled it the best way she could. She had to go onto county assistance. When I was 18, I gave birth to my first son. I went on welfare at that point in time. There was no other way I could do it.
FRED DE SAM LAZARO: Four more children followed, making her even more dependent and depressed
KATIK SPLITSTOESSER: Five years ago? Let’s see. Wake up in the morning, kind of mope around the house, feed the kids, whatever, watch TV, make a few phone calls, you know — pretend like you’re job searching. I’m the master at that one, you know.
FRED DE SAM LAZARO: The threat of losing welfare forced her to actually find a job. Today, at 27, Splitstoesser works in a doctor’s office. She’s now worked steadily for two years, a personal record. She no longer receives any public assistance, and that fact, she says, is not lost on her children.
KATIK SPLITSTOESSER: I’m providing, doing things that I thought I’d never do — self-esteem and high self-esteem for me, my boys see it. They take it on too. I’m more able to deal with… be a parent, be a great parent.
FRED DE SAM LAZARO: Clients in the Minnesota program typically earn $17,000 to $20,000 a year in their first jobs. Besides the wage, Splitstoesser credits guidance she received to develop discipline
KATIK SPLITSTOESSER: I could pick up the phone and say, “look, I need help talking to my employer because I’m going to be late. I know it’s the second time I’m going to be late. Could you help me out? Give me some pointers here.”
SPOKESPERSON: You’ll be attending these workshops.
FRED DE SAM LAZARO: Job Counselor Bates says many clients need pointers on basic issues like punctuality and attendance. The effects of life-long poverty, including poor health and poor education, can take a long time to repair.
SPOKESMAN: Could you start part-time do you think?
FRED DE SAM LAZARO: Bernie Dillard, a mother of three who did not go to high school, has had problems finding more than temporary jobs. She’s also been plagued by health problems.
FRED DE SAM LAZARO: When did you join this program?
BERNIE DILLARD: About four years ago.
FRED DE SAM LAZARO: And you’ve had, what, four jobs then?
BERNIE DILLARD: Uh-huh.
FRED DE SAM LAZARO: Welfare officials say cases like Dillard’s show how precarious the welfare-to-work journey is for many people. Fortunately, Minnesota’s economy remains strong, and that brings recruiters like Terry McMahon to welfare placement agencies.
SPOKESMAN: And we’re looking for good applicants for light industrial positions.
TOM BATES: Employers are more open to talking to just about anybody today because of the labor market, but a lot of them have really bought into welfare reform.
FRED DE SAM LAZARO: The big incentive for employers is an effective wage subsidy, since the state continues to pay partial welfare benefits until new employees reach self-sufficiency. For the state, its costs up to $4,000 more dollars per family in the MFIP program than the old welfare system. Commissioner O’Keefe says it’s a solid investment.
MICHAEL O’KEEFE: That is a relatively modest amount compared to the costs, for example, of compensatory education for kids who are falling seriously behind their classmates. That’s dramatically small compared to the costs of the prison system for an individual who finds himself or herself in trouble with the law.
FRED DE SAM LAZARO: Despite the successes, O’Keefe and others agree some welfare recipients remain unable to turn around their lives. For them, there’s a warning. Minnesota, like other states has added a stick to the MFIP carrot. The state now has a five-year maximum for anyone to receive welfare in the state.