When Congress passed welfare reform legislation that President Clinton finally signed in 1996, it abolished the federal welfare entitlement to cash benefits for dependent families. Recognizing the incredibly destructive consequences that this entitlement program had wrought, Congress directed each of the 50 states to design its own program to replace welfare with workfare.
Perhaps no two states resemble each other more closely than Minnesota and Wisconsin. Among other things, each has a population of roughly 5 million, each is dominated by a single metropolitan area, and each has a long-standing progressive political tradition. But in charting welfare reform, no two states have taken paths that diverged more markedly.
Minnesota and Wisconsin had similar welfare systems until the late 1980s. In 1986, however, Wisconsin's welfare caseload peaked at more than 100,000 families and became a significant political problem. Tommy Thompson was elected governor that same year on a platform that focused on welfare reform. In the following years, under Governor Thompson's leadership, Wisconsin pushed reforms that imposed responsibilities as a condition of receiving benefits. These reforms culminated in the requirement that able-bodied welfare recipients work for their benefits.
In the early 1990s, Wisconsin secured waivers from the federal welfare program that allowed the state to impose work requirements in selected counties as a condition of receiving benefits. By 1996, these reforms were applied to all counties under the "Work First" and "Pay for Performance" programs. Later that year the Wisconsin legislature adopted "Wisconsin Works" or "W-2." The premise of W-2, according to John Weicher of the Hudson Institute, is that "no one receives cash assistance without working for it." (Disabled adults are covered under a separate program exempt from this requirement.)
The key to Wisconsin's system is that it does not merely pay lip service to the desirability of working one's way off welfare. Wisconsin actually enforces its work requirements by denying benefits to able-bodied adults who refuse to work; cutting benefits to the extent that recipients fail to show up for their jobs; and providing community service jobs as a last resort.
Governor Thompson's reforms have virtually eliminated Wisconsin's welfare caseload. The number of families receiving welfare has dropped from its high of more than 100,000 to only 10,185 as of the end of 1998, a 90 percent decline.
Minnesota's version of welfare reform, the "Minnesota Family Investment Program," was implemented on January 1, 1998 and offers a clear contrast, beginning with its premises. MFIP "encourages" work, but does not require it. Many recipients, including those with children under one year old and those who are "experiencing a crisis," are exempt from any expectation of work. Others are required merely to prepare a work search or work readiness plan.
Remarkably, the most severe sanction that may be imposed if a recipient refuses to work or fails to comply with program requirements is a 30 percent reduction in benefits. Since Minnesota's cash welfare benefits exceed comparable benefits in Illinois and Indiana by 41 percent and 85 percent respectively, a 30 percent reduction is not exactly draconian.
According to the Minnesota Department of Human Services, only 38 percent of the state's welfare recipients are working. This figure is astonishingly low at a time when there is essentially no involuntary unemployment in Minnesota and many jobs go begging at every level of skill and experience.
Not surprisingly, Minnesota's approach has produced results very different from Wisconsin's. Minnesota's caseload peaked in 1992 at 66,212. By the end of 1998 it had fallen 30 percent, to 46,322, just one third the decline experienced by Wisconsin. In part, this difference in results reflects the fact that no one now moves to Wisconsin in order to collect welfare benefits. In Minneapolis, on the other hand, the home of Minnesota's largest welfare population, roughly a third of the caseload every year is new arrivals from other, mostly nearby states with lower benefits or more demanding programs, such as Wisconsin, Illinois and Indiana.
By supporting able-bodied recipients who do not work, Minnesota's welfare system needlessly perpetuates dependence. It also raises a fundamental question of fairness. Abraham Lincoln frequently argued that the basic precept of kingship and tyranny is, "You work and I eat." Lincoln condemned slavery as a manifestation of this precept.
Minnesota remains committed to a system consistent with this precept. By contrast, Wisconsin has experienced a new birth of freedom.