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Staying the Course on Welfare Time Limits

Appeared in the Vancouver Sun, November, 15, 2003
Authors:
Release Date: November 24, 2003
In a watershed development in Canadian social policy, British Columbia became the first province to implement time limits on welfare benefits in April of last year. The US experience with lifetime benefit limits–which make BC policies look comparatively modest–have demonstrated that such policies promote employment, independence, and transforms welfare back into a transitional program of last resort rather than an entitlement. Of all the reforms BC has adopted, the policy of time limits is by far the most important and one the government should be resolved to defend.

The criticisms against time limits have grown louder as the day the limits take effect approaches. Among the most vocal opponents has been New Democrat MLA Jenny Kwan, who has recently charged that time limits will create a wave of homelessness next spring: “Already we see people who are homeless, people who are panhandling, people who are in need of support. The situation is going to get worse”. Robert Arnold, acting president of federated antipoverty groups across BC, has criticized that “[the adoption of time limits] is an unconscionable act by a government without a conscience”.

These are harsh criticisms—but we’ve heard these stories of doom before. In 1996, President Bill Clinton encountered similar inflammatory rhetoric prior to signing comprehensive welfare reform, which included a 5-year lifetime limit on benefits. Even members of his own party, most notably, Democratic Senator Patrick Moynihan, attacked the President and the merits of limiting welfare. Moynihan lamented that, “[upon the expiration of time limits] you’ll find appearing on your streets abandoned children – helpless, hostile, angry, awful–in numbers we have no idea”. He also condemned time limits as the “most brutal act of social policy we have known since the Reconstruction.” Marian Wright Edelman, President of the Children’s Defense Fund, added to the furor, stating that welfare reform “will leave a moral blot on [Clinton’s] presidency and on our nation that will never be forgotten”.

Despite these dour predictions, such a disaster never happened. In fact, the evidence indicates overwhelmingly that quite the opposite occurred. According to the United States Department of Health and Human Services, 7.5 million recipients have left welfare since 1996, a decline of nearly 60 percent. More importantly, between 63 and 87 percent of those leaving welfare found employment. In addition, the US poverty rate has been reduced to its lowest level since 1979 and the poverty rate for single mothers and black children is the lowest ever recorded. Remarkably, welfare caseload numbers and poverty rates have remained steady despite the recent economic slowdown.

Time limits work because they transform welfare from a system of entitlement, to one of insurance and temporary relief. In other words, confronted with time limits, welfare recipients change their behavior to minimize casual relief so that future eligibility can be preserved for times of emergency. For example, a new study published in the June issue of the Journal of Political Economy found that in the absence of other reforms that actually increased welfare use, Florida’s time limits would have reduced welfare by 16 percent.

Much of the criticism against time limits has focused on the seeming inability of the relatively weak BC economy to absorb thousands of welfare leavers, noting that US welfare reform succeeded under a strong economy. While welfare caseloads normally fluctuate with the business cycle, most major research refutes the assertion that the successes of US welfare reform had more to do with economic expansion rather than the reforms themselves. In 1999, President Clinton’s Council of Economic Advisers estimated that welfare reform was responsible for about 35 percent of the caseload reductions since 1996, while only 9 percent was attributable to a strong economy.

The most recent data from the BC government indicates there are about 33,000 cases involving individuals who are required to look for work. Only a minority of these cases, however, will be threatened by time limits in April 2004 since an overwhelming majority of welfare recipients do not remain on assistance for more than a brief period. As such, with more than 10,000 jobs waiting for welfare recipients through the Ministry of Human Resources, there seems to be more than enough employment opportunities for those who wish to pursue them.

Instituting benefit time limits has returned welfare in BC to a system of temporary assistance, as was originally intended. The US experience with time limits unambiguously dispels the myths promulgated by many social advocates. Thus far, unfortunately, the BC government has proven itself flaccid in its resolve on a number of fiscal initiatives. Hopefully the BC government will exhibit the fortitude to enforce time limits and thus potentially save a new generation of British Columbians from welfare dependency.


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