How Welfare Reform Helps Ada Cardoza

As a single parent and former welfare recipient, Ada Cardoza openly says that "life hasn't been easy."

But now things are looking up. She works each afternoon sorting small packages into bags by zip code at a United Parcel Service facility in Chelmsford, Mass. She gets paid $8 an hour.

Nearly a year after President Clinton signed the welfare-overhaul bill, reform is going far better than critics predicted last summer.

Mr. Clinton boasted recently that the welfare rolls have shrunk by 1.2 million people since August. Economists say former welfare recipients have helped fill some labor shortages in the robust economy.

"Welfare reform couldn't have come at a better time," says Isabell Sawhill, an economist at the Urban Institute in Washington. "Because the economy is expanding so nicely, there are lots of jobs out there."

The strong economy has made reform relatively easy so far. But some major hurdles loom. For instance, the most-qualified welfare recipients find it easier to move into jobs, but those with fewer skills may not make the leap so quickly.

"Almost regardless of the state of the economy, some welfare recipients are likely to encounter real difficulties in securing steady employment," notes Sawhill, co-author of a study on job prospects for welfare recipients.

Also, even many of those who have found jobs are still living just above the poverty level.

And if the economy does sputter, former welfare recipients could face much tougher times.

In Chelmsford, however, UPS worker shortage has been partly met by the 25 people in the program for welfare recipients. It has "fit our needs," says Christopher McNeil, work-force planning manager. "And it fits their needs."

So far, more than 200 companies have joined Clinton's Welfare to Work Partnership. The goal is to have 1,000 companies signed on within the next six months.

Headed for self-sufficiency

For Ms. Cardoza there's little doubt her life has improved. "I'm better off," she says. Working 20 hours a week, with overtime at Christmas, she makes at least $640 a month. She used to get just $300 a month from welfare and $76 in food stamps.

And in the morning, she goes to a UPS-sponsored school in her hometown, Lawrence, Mass. Having dropped out of school in ninth grade, she's working on a high school equivalency diploma.

Under the new law, Washington imposes a lifetime limit of five years of receiving welfare benefits and gives control of welfare cash assistance to the states. Cardoza had already been on welfare more than five years when she got her job seven months ago at UPS, at first unloading and loading trucks.

Ms. Sawhill, the economist, figures most of those who find full-time jobs will stay above the poverty line with the help of subsidized child care, food stamps, the Earned Income Tax Credit, and possibly other government aid.

"It is still a pretty low income," she says. After paying child care, many mothers would live beneath the poverty level, which was $12,600 for a mother with two children last year.

But opportunities do exist for low-wage workers to move up the economic ladder rather quickly, Sawhill's study notes.

Cardoza has been offered a supervisor's position at UPS, but so far has declined. "It is scary," she says.

The less fortunate

Mr. McNeil, the UPS manager, notes that some welfare recipients don't succeed at UPS. "We are asking them to make a lot of changes in their lives. Some are successful. Some aren't"

Welfare recipients are a mixed group. Among them, there can be any combination of drug and alcohol addiction, homelessness, illiteracy, illness, or abuse. Employers find some too troublesome to keep.

Gary Burtless, an economist at the Brookings Institution in Washington, wonders what the public reaction will be if many welfare mothers run out of benefits, can't find work (private or government-provided), and start begging on the streets with children in tow.

There could be "an outcry against the harshness of the system," he says.

The emphasis of workfare programs at the state and sometimes county level is on work, rather than education and training. Most states insist welfare recipients find jobs, even if they're very low-wage. At least 20 states are imposing shorter time limits than five years on all or part of their caseload.

If the economy fails...

The big test of the new welfare system will come if the economy slips into a slump.

As many as 100,000 to 150,000 former welfare recipients per year could be competing for a less- rapidly growing number of jobs, the Urban Institute calculates.

In the present tight job market, hourly wages of workers at all income levels have been rising in real terms for the past year, notes Jared Bernstein, an economist at the Economic Policy Institute in Washington. Those at the bottom of the income scale have seen the biggest percentage gains.

Cardoza, who lives in a housing project, welcomes reform partly because it forces welfare mothers like some of her neighbors to get out of their apartments and work.

"We were getting paid to stay at home," she says. "It is a good thing to get people out. It is the best thing that can happen to them."