Guest Column: Welfare Reform from the States

As the state governments begin to replace the old federally funded welfare program with their own plans, there is one federal welfare program that actually works and could be a model for the states. Contrary to popular opinion, the number of refugees on welfare has been quite high, running well over 50 percent in those states with the highest level of welfare benefits. Ten years ago Congress created a program designed to get refugees into jobs quickly by taking control away from the state governments and giving it to the private sector.

Every year the State Department designates around one hundred thousand or more people as refugees. Until the reforms, state agencies served as the primary funnel for the $400 million in federal welfare, job training, and medical care for the refugees. Now some of this money goes to private, nonprofit organizations that not only distribute the welfare checks, but also handle job training, counseling, and a variety of other services for refugees.

These organizations are primarily religious institutions such as U.S. Catholic Charities, Lutheran Immigration Services, Council of Jewish Federations, and others. The results have been impressive. In San Diego, a pilot project was established in 1990 by the local affiliate of Catholic Charities, composed of a group of more than thirteen hundred refugees who were getting federal aid. Since 1990, 64 percent of the refugees have gained employment and are off welfare. Of those refugees resettled by the county government, fewer than 25 percent have become self-sufficient.

A Chicago project for Southeast Asians and East Europeans has been even more successful. Why do private agencies prove better at moving refugees into self-sufficiency? One reason is that they expect more from their clients. Bob Mosier, executive director of the Catholic Charities San Diego office, says “Once people are socialized to a welfare state of mind, getting them off is very difficult. Some people make a lot of excuses for why they can’t take a job. But we challenge the excuses and have found that 100 percent of our clientele accept our decision when they know that we won’t play games.”

The private institutions and their staff share a belief in the need for refugees to find employment at the earliest possible time. They know that the longer someone stays dependent, the more difficult it is to find work. In my three years as head of the federal Office of Refugee Resettlement, which oversees these welfare programs, I found that many state government bureaucrats do not share this view. Instead, many think refugees should be allowed to remain on welfare until they attain the kind of credentials that would allow them to compete for middle-class jobs—a process that can take years. Government research has demonstrated that 95 percent of those refugees who do not find jobs within one year after arrival remain on welfare indefinitely.

But not all of the fault lies with the local government. The federal government expects more from the private sector and pushes it to perform. Private agencies are required to get a minimum number of clients off welfare within a set time period. If they fail, the government can take a variety of measures, from reducing the size and funding for the private agency, to ending its funding of the program altogether.

Private agencies also have much smaller bureaucracies handling their caseload, with lower overhead and a better social worker/client ratio. More importantly, delivery of all services is centralized in one agency. The same caseworker who hands the client the welfare check also works on job placement and training. This gives the caseworker much more authority to get the job done.

As they begin to shape their new welfare programs, states should take a close look at the experience with refugees. Each state should allow private organizations like U.S. Catholic Charities to compete with city- and county-run agencies. The private groups have more than ten years’ experience providing welfare and services to refugees. They are well-equipped to take on additional responsibility for American welfare clients. They need state governments to turn over federal welfare dollars as well as job training money so they can provide a variety of services, just as they do in the refugee program. If, after a few years of testing, the private agencies do a better job than city and state governments, then perhaps the entire welfare caseload should be turned over to them.

It is my bet that the states that move quickly to take advantage of the experience and commitment of the private religious organizations will have the most successful new welfare programs.


  • Chris Gersten

    Chris Gersten was Director of the Office of Refugee Resettlement in the Department of Health and Human Services from 1989 until 1993.

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