At what point can welfare agencies stop blaming a weak economy for citizens' ongoing reliance on public assistance and lack of widespread employment? That's the question that came to mind after reading a recent audit in Oregon that criticized the state's Department of Human Services (DHS) for failing to move enough people back into the workforce four years after the Great Recession officially ended.
The audits division for Oregon Secretary of State Kate Brown concluded that DHS had made "little to no progress" getting people off the federal Temporary Assistance For Needy Families (TANF) program, in part because it had failed to hold people accountable for work-related outcomes. While Oregon's unemployment rate has steadily improved over the past four years, its labor force participation rate in 2013 was at its lowest point since 1976. Part of the reason the unemployment rate has dropped is because people have stopped looking for work.
In a written response to the audit, DHS Director Erinn Kelley-Siel rejected the report's argument that DHS policies were to blame. She said poor employment outcomes for the agency reflected a still-weak economy with fewer middle-wage jobs and greater competition for low-wage jobs. After all, she reasoned, other temporary assistance programs, such as unemployment insurance, underwent multiple extensions by Congress, a sign that the reason people couldn't find jobs was that there weren't enough of them.
To some degree, the story of DHS in Oregon is representative of national trends, where the agencies designed to help people in economic distress were themselves weakened by reduced tax revenues and diminished resources. Yet in two ways, Oregon is unique: It saw the largest increase in TANF cases of any state in the country from 2007 to 2013 and its TANF recipients reported the lowest participation rate for work-related activities of any state in the country.
Last year one in 40 Oregonians were on TANF. The state has one of the highest TANF coverage rates in the country, the direct result of a policy decision to expand access by adding state funding while cutting related support services. The number of single-parent families covered by TANF almost doubled from 2007 to 2013, while the number of two-parent families increased fivefold. Although DHS expects the number of families on TANF to steadily decline in future years, its forecast for 2017 still estimates that more families will be on TANF than at the start of the recession in 2007.
The report's authors applaud the state for its creativity in making cash assistance available to more families even as tax revenues shrank. But the state auditors point out that this maneuver came with a cost: Overwhelmed case managers saw their caseloads swell to 200 families per employee in some branches. The auditors estimate that case managers had less than 40 minutes a month to work with each family and handle eligibility reviews. Now it's time the state revisit some of the more desperate budget decisions made during the recession, they argue.
With limited options, the state decided to save money by cutting back on support services. "During the recession, the legislature made the right decision to prioritize financial assistance to families living in poverty," said Brown in a written statement when the audit was released April 16. However, both Brown's office and DHS acknowledged that the cut services are essential for helping people find and retain a job. For example, the agency reduced subsidies to child care and transportation; it laid off three-quarters of its contractors, including those who coordinated treatment for mental health and drug and alcohol abuse; and it eliminated post-secondary education opportunities for new clients. Oregon is not alone in prioritizing cash assistance over work-related supports: A survey of 30 states by Mathematica Policy Research found that at least 17 states have reduced funds for support services since the recession.
The report details the fallout from these cuts in Oregon. For instance, in-depth assessments of TANF clients, such as addiction counselors screening for drug problems, became the responsibility of caseworkers who didn't possess the specialized expertise. The process became more reliant on clients disclosing sensitive information about drug addiction, domestic violence and mental health, which increased the likelihood that case managers weren't collecting information that would be critical for matching TANF recipients with appropriate jobs.
Most of the audit's final recommendations are straightforward. The auditors suggest that DHS pursue a variety of partnerships with nonprofits and other public agencies, and they recommend the agency update computer systems for improved data collection and sharing.
Although the audit highlights areas where DHS wasn't functioning as it was supposed to, it did applaud the recent decision by DHS to convert some eligibility worker positions to caseworkers. The report doesn't, however, sufficiently address DHS Director Kelley-Siel's defense that structural problems in the economy are the real culprit for increased numbers of TANF recipients in Oregon. Since welfare reform in the mid-1990s, government has measured the effectiveness of safety-net programs largely on their ability to shift people back into the workforce and out of poverty. But what happens when jobs don't exist, or the unemployed are no longer qualified for the jobs that do exist?
The auditors assume the reason the number of TANF recipients hasn't returned to pre-recession levels is largely due to policy decisions made by the agency during an economic crisis. But if Kelley-Siel is correct, then the real reason for families' continued dependence on cash assistance may be that for low-income households in Oregon, the crisis isn't over yet.