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Curbing Dependency in the Big Apple
Will Bill de Blasio learn the right lessons on welfare?

(Image: Dreamstime)

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In the last two decades, New York City has made tremendous strides in helping people move off welfare dependency, according to a new study by E. J. McMahon for the Manhattan Institute, “Trends in Assistance and Dependency: Tracking Programs for New York City’s Poor, 1956–2014.” In the last 19 years, there has been a 71 percent drop in New Yorkers on welfare. McMahon, a senior fellow at the Manhattan Institute’s Center for State and Local Leadership and president of the Empire Center for Public Policy, Inc., talks with National Review Online’s Kathryn Jean Lopez about the history and future of welfare policy in the Big Apple and elsewhere.
 

KATHRYN JEAN LOPEZ: What is the most significant take-away from a study of welfare in New York City over the past 19 years?

E. J. McMAHON: The decrease in welfare dependency has been as striking and dramatic as the decrease in crime in New York City, which started just a few years earlier. During Mayor John Lindsay’s heyday in the 1960s, New York City became known as the nation’s welfare capital. Not by coincidence, it also was the epicenter of what became a national “welfare rights” movement. The welfare rolls increased from about 400,000 to over a million people in the early 1970s, which so alarmed Governor Rockefeller and the legislature that they started pulling in the reins from Albany, with little effect. Even at the peak of the city’s economic recovery in the late 1980s, the caseload never dipped below 810,000. By 1995, Rudy Giuliani’s second year as mayor, the number of New Yorkers essentially on the dole was back to 1.16 million. By the time he left office, it was at 462,000, and it’s now about 339,000. This is essentially the baseline for assessing Bill de Blasio’s welfare policies over the next four years.
 

LOPEZ: What explains the city’s drop in welfare dependency?

McMAHON: The 1996 federal welfare reform — Bill Clinton’s bargain with a Republican Congress to truly “end welfare as we know it” — was the big trigger, of course. But that was not the whole answer. Rudy Giuliani and Jason Turner, who became the city’s commissioner for welfare and Medicaid eligibility in 1998, were deeply committed to the principle that getting poor people into a job, any job, is better than simply writing them a check. And in pursuing that goal, they adopted the same sort of performance-driven, stat-focused approach the city had applied to policing. Mayor Bloomberg basically stuck with that all the way. In fact, the welfare commissioner for most of Bloomberg’s tenure, Robert Doar, previously had been Governor Pataki’s state welfare commissioner, and had done a lot to promote key reforms at the state level.
 

LOPEZ: Is this all good news? Do we know how people are doing once off welfare?

McMAHON: What we know for sure is that poor people are much better off working, even in an entry-level job, than on welfare. As the report points out, a nonworking single mother with two children can collect cash benefits or cash substitute worth $16,032, well below the federal poverty level, but she can more than double that, earning about $34,000, by working. One big part of the difference consists of $8,787 in federal, state, and city earned-income tax credits, which is a very important means of support for low-income workers.

The city’s official poverty rate went down every year for five years after welfare reform, and stayed essentially flat for the next eight years. Although the poverty rate has risen since 2008, it still hasn’t returned to the levels of the mid 1990s. Child poverty, in particular, is appreciably lower than it used to be, which reflects the city’s emphasis on providing support for working parents with dependents. And New York has a lower poverty rate than Los Angeles, Chicago, Houston, Philadelphia, or San Antonio. The city’s alternative measure of poverty, which starts at a higher income threshold and counts cash income supports from public sources, is actually slightly lower than the official measure, which is based on census data.
 

LOPEZ: The number of people on food stamps and Medicaid is at an all-time high in New York City. What do these numbers say to you?

McMAHON: There have been several things going on. Eligibility for the federal food-stamps program was expanded in a big way starting around 2002, and New York State began expanding its Medicaid program to families well above the poverty level around the same time, years before Obamacare arrived and started doing the same thing. But there also was a deliberate effort under Mayor Bloomberg to sign more people up for food stamps and Medicaid. He viewed these as “work supports” rather than welfare. The idea was that it was better for a poor person to be working, with the help of food stamps and Medicaid, than to be unemployed and cashing checks. Of course, the ideal would be complete self-sufficiency, and too much of the population is still far from that.



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