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Southern Perspectives

On behalf of the SRDC staff (Bonnie Teater, Jacque Tisdale, Sandra Payne and myself) I want to express my thanks for the many kind words of support we've received during this transition period. Although it has been just a few months since I began my new job as SRDC Director, I am excited, and at times overwhelmed, by the opportunities that exist in the region to advance the rural development agenda. Over the course of the next several months, we hope that we can prove successful in our efforts to further strengthen the work of our Southern land grant system in the rural development arena.

With a new leadership comes an opportunity to review where we have been and what we hope to do in the future. With the guidance of our SRDC Board of Directors and the Advisory Committee, we will be refining our priority extension and research initiatives. We hope to communicate these to you in the near future.

One of the areas that we have decided to pursue aggressively is our communications activities with our Southern land grant colleagues and key stakeholders outside the land grant system. We have implemented a new electronic newsletter titled, Grant Connections, a product that is designed to keep our land-grant faculty abreast of funding opportunities in the rural development area. Furthermore, we have significantly modified the SRDC newsletter. Once titled Capsules, our new newsletter is now called Southern Perspectives. You are receiving the inaugural issue of this important SRDC communication piece. While we are preserving much of what was contained in the old Capsules newsletter, Southern Perspectives is designed to be more thematic in its orientation, giving specialized attention to a topic in each issue. Because of the tremendous interest in "welfare reform," we have decided to offer a "southern" view on what welfare may mean for our region, particularly for the rural communities and people of the South. Lastly, we have adopted a new logo, one we hope is more in keeping with the times.

We appreciate the authors who have contributed their talents to the preparation of articles on our welfare reform topic. Future issues will address other themes (such as economic development, education, poverty, and rural health). If you are engaged in innovative research and extension activities relating to any of these topics, we would appreciate hearing from you. We want to spotlight the excellent work going on in the region. We hope you like some of our new efforts. As always, we are open to your thoughts and reactions.

Bo Beaulieu
Director

An Overview of Major Provisions Associated with Welfare Reform

Bo Beaulieu

When President Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act (PL104-193) in August 1996, he put into motion a significant change in the way in which public assistance is carried out in this country. While welfare reform has received the lion's share of attention, the reality is that this new legislation introduces significant changes in Food Stamps and Supplemental Security Income programs, establishes a block grant to consolidate federal child care programs, makes a host of programs unavailable to a large cadre of legal immigrants, intensifies child support enforcement efforts, and tightens rules on nutrition programs, such as subsidized school lunch programs (Blank, 1996). In essence, this new act places control of the management of low-income assistance programs squarely on the shoulders of states, with the exception of certain mandated federal guidelines.

Serving as the centerpiece of this new federal legislation is the Temporary Assistance to Needy Families (TANF), commonly referred to as "welfare reform." This measure consolidates funding for Aid to Families with Dependent Children (AFDC), state and local AFDC administration, Emergency Assistance (EA), and the Job Opportunity and Basic Skills program (JOBS) into a block grant. In this article, we will provide a brief overview of the key provisions associated with this new federal legislation. It is our hope that this overview will prove useful to our Southern land grant university faculty as they seek to better inform their customers of the various components associated with this landmark legislation.

Work Provisions of TANF

• TANF recipients must secure a job after two continuous years on assistance. At least 25 percent of single parent headed households, and 75 percent of two-parent households, must be engaged in work activities (or be off assistance rolls) in FY 97. This figure increases to 50 percent for the former, and 90 percent for the latter, by the year 2002. In this first year, single parents must be working a minimum of 20 hours per week, with this increasing to 30 hours per week by the year 2002. As for two-parent families, at least one of the parents must have been employed for 35 hours per week by this past July 1997.

• States have the discretion to exempt from the work requirement those single parents with children under age one. Such persons do not have to be included in the state's calculation of participation rates for up to one year. If single parents with children under six are unable to find child care, they cannot be penalized for failing to meet the work requirements of TANF.
• A variety of activities can be counted toward meeting work requirements. These include participation in unsubsidized or subsidized employment, on-the-job training, work experience, community service, 12 months of vocational training, or child care services to persons who are taking part in community service activities.

Cap on TANF Participation

Families who have received assistance for five cumulative years will no longer be eligible for cash assistance. Up to 20 percent of the caseload can be exempt from this requirement due to hardship factors. States have the discretion to restrict the lifetime cap on benefits to a shorter period of time. All members of the family who are connected to the adult recipient are subject to this time limit. However, the five-year limit does not apply to child-only cases (those cases where the child is living with no eligible adult).

Food Stamp Eligibility

Able-bodied adults 18-50 years of age without dependents must work 20 hours a week to receive food stamps. If the person is not working, only three months of benefits can be provided over a three-year period.

• Benefit levels are reduced by 3 percent across the board.
• Access to food stamps by immigrants is significantly altered (these changes are described below under the heading "Impact on Immigrants.

Medical Programs

• Medicaid is a joint federal-state program that attends to the health needs of low-income families, senior citizens, and individuals with disabilities. Prior to the implementation of TANF, persons receiving AFDC payments were automatically eligible for Medicaid, However, with the passage of TANF, Medicaid and TANF eligibility were no longer linked. Individuals can continue qualifying for Medicaid benefits indefinitely as long as they meet all necessary conditions, even if they no longer qualify for TANF. Medicaid eligibility is being determined through the use of the AFDC eligibility criteria that was in use July 1996. States do have the option, however, to employ a more stringent AFDC eligibility requirement as long as these were in place on May 1, 1988.

• States are allowed to deny Medicaid benefits to adults and heads of households who lose TANF benefits because of their refusal to work.
• Access to Medicaid by immigrants is significantly reduced. Specific implications are reported more fully in the section on "Impact on Immigrants."

Supplemental Security Income (SSI):

Supplemental Security Income (SSI) is designed to provide cash payments to needy aged, blind, and disabled persons, including children. The new welfare reform program has introduced significant changes, particularly for children and immigrants. While the impact on the latter group is discussed elsewhere, the consequences for children are highlighted in this section.

• In general, children were able to qualify for SSI if they met one of the medical diagnoses listed by the federal government. However, in the event that a child's disability was not listed, an "individual functional assessment" could be performed to determine disability status. It is estimated that in as high as one-third of the cases, children were able to secure eligibility in SSI via this process. Welfare reform has now disallowed the use of "individual functional assessments." Consequently, eligibility is now limited to those children whose conditions are included on the federal list of medical disabilities. This is likely to result in a decline in the number of children covered by SSI. It was feared that since SSI generally qualified one for Medicaid, the more stringent SSI requirements would have resulted in some children losing their access to Medicaid. However, the balanced budget signed by the President on August 5, 1997, allowed continuation of Medicaid coverage for currently disabled children receiving SSI.

Teen Parents

An unmarried teenage parent must now live with a responsible adult or in an adult-supervised setting in order to qualify for TANF. It is the responsibility of the states to assist teen parents in securing an adult-supervised facility when necessary.

• Teen parents having no high school diploma must be enrolled in a program designed to lead to a high school diploma or GED, or must take part in an alternative education or training program approved by the state. If they do not, they will lose their TANF benefits.

Impact on Immigrants

Legal immigrants who received SSI and Medicaid benefits on or prior to August 22, 1996, (the date the new welfare reform program was enacted) will remain eligible for these programs. These individuals will also be eligible for SSI and Medicaid should they become disabled in the future.

• SSI and Medicaid benefits are provided to disable legal immigrants who entered the country before August 22, 1996.
• Refugees, political asylees, and individuals whose deportation has been withheld can be eligible for SSI for up to seven years.
• All nonexempt qualified aliens who were in the U.S. when the new welfare reform bill was signed lost their eligibility for Food Stamps on August 22, 1997. They will become eligible once they become citizens, or have been working for 10 years.
• Legal immigrants entering the U.S. after August 22, 1996, are not eligible for most federal assistance programs during the first five years. After five years, they will continue to be ineligible for food stamps and SSI until they become citizens or have worked in the U.S. for 10 years. Their eligibility for Medicaid is the option of the state. Once the five-year period is reached, legal immigrants will have a more difficult time qualifying for TANF or Medicaid assistance given that the income and assets of the immigrant's sponsors will be included in the determination of eligibility.

Child Care Funding

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 established a new Child Care and Development Fund (CCDF), which consolidates four federal child care subsidy programs­AFDC/JOBS Child Care, Transitional Child Care, At-Risk of Welfare Dependency Child Care, and Child Care and Development Block Grant.

• The bulk of these funds is to be used for addressing the child care needs of low-income working families, or on families who are seeking to become self-sufficient.
• A minimum of 4 percent of federal and state funds must be set-aside to improve the quality and availability of healthy and safe child care for all families. Included is the provision of referral services for parents who need assistance in the selection of child care providers for their children.
• States may transfer up to 30 percent of their TANF block grant to the child care block grant.

Concluding Comment

It is clear from the highlights provided in this article that the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 has introduced fundamental changes in public assistance programs in this country. While these modifications are likely to result in federal budgetary savings over the course of the next six years, the ultimate success of these initiatives will be dependent, in no small way, on the active engagement of state and local governments in these efforts. The land grant university community, through its research programs, can be a major partner with states and local communities in assessing the impact of these programs on both people and places of the region. In addition, the outreach education resources of the Southern land grant system can be instrumental in enhancing the capacity of individuals, families and communities to effectively respond to the challenges that are emerging as a product of the shifts in public assistance program responsibilities.

References

American Association of Community Colleges. "Welfare reform." (October) 1997. www.aacc.nche.edu/govtrel/legisu/welfare/welfar.htm

Bauer, J. W. "Personal responsibility and work opportunity reconciliation act of 1996 PL 104-193 and the agriculture, rural development, food and drug administration and related agencies appropriations act, 1997 PL 104-180." College of Human Ecology, University of Minnesota. September 1996.

Blank, Rebecca M. "The 1996 welfare reform." Northwestern University/University of Chicago Joint Center for Poverty Research, 1996. www.library.nwu.edu/publications/nupr/blank2.html

Conigland, Keenan S. "A new era." Partners in Community and Economic Development. Federal Reserve Bank of Atlanta, Volume 7 (Summer) 1997.

Cook, Peggy J. and Elizabeth M. Dagata. "Welfare reform legislation poses opportunities and challenges for rural America." Rural Conditions and Trends. Vol. 8 (1), 1997.

Department of Health and Human Services. "Link between Medicaid and Temporary Assistance for Needy Families (TANF)" Fact Sheet # 1. Health Care Financing Administration (not dated). www.hefa.gov/medicaid/wrfs1.htm

Department of Health and Human Services. "Link between Medicaid and SSI Coverage of children under welfare reform." Fact Sheet # 2. Health Care Financing Administration (not dated). www.hefa.gov/medicaid/wrfs2.htm

Department of Health and Human Services. "Link between Medicaid and the immigration provisions of the Personal Responsibility and Work Opportunity Act of 1996." Fact Sheet # 3. Health Care Financing Administration (not dated). www.hefa.gov/medicaid/wrfs3.htm

Department of Health and Human Services. "The Personal Responsibility and Work Opportunity Reconciliation Act of 1996." Fact Sheet. (August) 1997. www.hhs.gov/news/press/1997pres/9708.12html

Kramer, Fredrica D. "Welfare reform and immigrants: Recent developments and review of key state decisions." The Welfare Information Network (not dated). welfareinfo.org/kramer.htm

Ku, Leighton and Teresa A. Coughlin. "How the new welfare reform law affects Medicaid." Assessing New Federalism: Issues and Options for States; Number 5. The Urban Institute, 1997.

Long, Sharon K. and Sandra J. Clark. "The new child care block grant: State funding choices and their implications." Assessing New Federalism: Issues and Options for States; Number 12. The Urban Institute. October 1997.

Loprest, Pamela J. "Supplemental security income for children with disabilities: Part of the federal safety net." Assessing New Federalism: Issues and Options for States; Number 10. The Urban Institute, 1997.

Sawhill, Isabel V. Welfare Reform: An Analysis of the Issues. The Urban Institute (June), 1995.

Social Security Administration. "An important message from Social Security: Good news about SSI for legal immigrants." (August) 1997.

Social Security Administration. "Welfare reform and SSI childhood disability." A Factsheet from Social Security. (February) 1997.

Steuerle, C. Eugene and Gordon Mermin. "Devolution as seen from the budget." Assessing New Federalism: Issues and Options for States; Number 2. The Urban Institute, 1997.

Uccello, Cori E. and Jerome Gallagher. "General assistance programs: The state-based part of the safety net." Assessing New Federalism: Issues and Options for States; Number 4. The Urban Institute, 1997.

Spatial Mismatch: The Challenge of Welfare-to-Work in the Rural South

Mark Nord and Bo Beaulieu

Considerable attention has been devoted in recent years to the restructuring that has occurred in the South's rural economy. The goods producing industry, which historically has played a vital role in maintaining the economic health of the rural South, has undergone significant downsizing over the course of the last two decades. In its stead has come growth in service sector related jobs­jobs that have often had low wages attached to them. While a number of service-sector jobs do pay decent wages, these have tended to flow to urban areas of the region, while the less well-paying service jobs have gone to the South's rural areas.

These trends are important to welfare program planning because they raise concerns about the quality of jobs that will be available to TANF participants in the rural South who are seeking transition from welfare to work. Despite being actively engaged in the work force, it is quite possible that they will not garner wages that are sufficient to provide even a minimally adequate subsistence for their children and themselves.

Unfortunately, in many rural counties of the South, the issue may not be so much the availability of well paying jobs, but rather whether jobs will be available at all for TANF recipients. The possible scarcity of rural jobs could prove problematic for TANF recipients who must find work in order to maintain their benefits. And former welfare participants who have lost their benefits and must find employment in order to survive also could be significantly impacted by these rural job shortages.

At the national level, the availability of jobs for welfare recipients appears quite hopeful, particularly if the country's economic expansion remains strong. The Bureau of Labor Statistics, for example, projects that about two million jobs will open for people with less than a bachelor's degree­jobs that will require modest training and minimal experience. The bulk of these openings will result from current workers moving into better jobs, individuals leaving their jobs to continue their education, or people transitioning into retirement. Approximately one-third of the openings will represent net new jobs to the nation's economy, and many will require a high school education or less. The lion's share of these new jobs will be in the expanding service sector.

For many welfare recipients in the rural South, however, the employment outlook could be much bleaker. The one factor contributing to such a pessimistic assessment is the concern with spatial mismatch­jobs openings are not occurring where the employment needs could be the greatest. While one option for overcoming this constraint is to transport rural workers to urban or suburban job sites where jobs are more plentiful, the reality is that few rural localities have access to transportation systems. This is especially true in high-poverty counties of the rural South­areas where low-income families have limited access to dependable private vehicles and where alternative transportation systems are largely non-existent.

A Closer Look at the Spatial Mismatch Issue

To assess the severity of the welfare-to-work spatial mismatch problem in the rural South (i.e., that region of the country served by the Southern Rural Development Center), and to locate specific geographic areas where the problem is likely to be most acute, we mapped the overlap of high unemployment and high welfare dependence in the rural (i.e., nonmetropolitan) counties of the U.S. We first ranked (from highest to lowest) all rural counties in the nation on the proportion of families that received AFDC benefits in 1994 (the most recent year for which data are available). A similar ordering was done for these counties on the basis of their 1994 average unemployment rates. Finally, we mapped rural high-AFDC counties and rural high-unemployment counties in the country ­those that ranked in the top 25 percent in the U.S. on each of our measures. The product of these efforts for the U.S. South is presented in the accompanying map.

While 42 percent of all nonmetro counties in the United States are located in the South, 52 percent of our nation's nonmetro counties having high AFDC dependence and high unemployment rates are located in the southern region. These counties are likely to face the greatest challenges in implementing the welfare-to-work programs that are part of TANF. The lion's share of these "overlap" counties is situated in the historically high-poverty areas of Appalachia, the Black Belt, the Mississippi Delta Region, the Ozark-Ouachita Plateau, and the lower Rio Grande Valley.

Concluding Remark

While the underlying premise of welfare reform is to promote self-dependence among our nation's TANF recipients, it is important to understand that not all localities are equally endowed with the resources to facilitate the transition of individuals from welfare-to-work. Many areas of the rural South, especially those suffering from high rates of unemployment and high AFDC dependence, will be hard pressed to generate the number of local jobs needed to successfully absorb TANF recipients into the workforce. The region's land grant institutions, working in partnership with these communities, can help them address more effectively the formidable obstacles they face.

( A map is available for viewing in the PDF format)
 

Mark Nord is a Research Associate in the Department of Rural Sociology at University of Wisconsin-Madison. Bo Beaulieu is Director of the Southern Rural Development Center.

Welfare Participants in the U.S. South: A Statistical Profile

Bo Beaulieu

As states in the South move forward in their efforts to adjust to welfare reform, it is worthwhile to review what these changes might portend for the people and states in our region. An appropriate beginning point is to examine the recent history of movement of individuals off the welfare rolls in the South. Presented in
Table 1 are data on the 13 states and two territories that are part of the geographic area served by the Southern Rural Development Center.

Table 1. Number of AFDC/TANF Recipients in the Southern States and Territories, 1993-97

Source: Administration for Children and Families, U. S. Department of Health and Human Services. (October) 1997.

Table 1 presents data on AFDC recipients as of January 1993 and tracks the enrollment numbers through June 1997. Although the formal enactment of welfare reform did not occur until August 1996, it is clear that prior federal and state legislative activities were instrumental in beginning the process of reducing welfare rolls across the region. What is most evident is that significant declines in AFDC/TANF recipients occurred over the course of the 1993-97 period. In all states, caseloads declined a minimum of 26 percent. In fact, in six of the Southern states, caseloads dipped by 40 percent or more. In the territory of Puerto Rico, welfare caseloads plummeted by 26 percent between '93-97. Only the territory of the Virgin Islands did an actual increase occur in AFDC/TANF recipients (16 percent).

Level of Block Funding to States

One of the key features associated with the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 is the block granting of funds to states for management of the Temporary Assistance for Needy Families (TANF) program. The level of resources allocated to states was based on the Federal share of expenditures for family assistance programs earmarked for those states in FY94, FY95, or the average expenditures for the FY92-94 period, whichever of these figures was largest.

The level of resources received by Southern states and the territories of Puerto Rico and Virgin Islands as part of their FY97 Family Assistance Block Grants are shown in Table 2. Keep in mind that these funds will remain capped at these current levels through the year 2002. Table 2 also presents maintenance of effort levels that states are required to meet as part of the welfare legislation. For states that are successful in meeting the work participation rates required by the federal government (for example, they succeed in having 25 percent of single parents on TANF engaged in work activities in FY97), they will be required to maintain their state's outlay for welfare assistance at 75 percent of their FY94 welfare program expenditures. If states fail to reach the mandated work participation rates, then state-funded expenditures for TANF will need to increase to 80 percent of their FY94 state-level expenditures for welfare assistance.

Table 2. State Family Assistance Block Grant Amounts to Southern States, State Level Expenditures for Welfare Assistance in 1994, and State Maintenance of Effort Levels Requirements
 

Source: U.S. Department of Health and Human Services, December 1996.

What is noteworthy is the potential financial impact that states will experience if they fail to meet participation rates under TANF. In the state of Florida, for example, failure to comply with work participation levels will necessitate the expenditure of an additional $25 million to meet its maintenance of effort level. Even less populated Southern states will have to expend millions of additional dollars if they are unsuccessful in moving TANF recipients into the work force. On a short-term, most Southern states will have little difficulty meeting the mandated work participation rates. Over the longer-term, however, when required participation rates of  TANF recipients become significantly higher (50 percent by the year 2002) and the job skills and educational levels of individuals who have remained on TANF are far more limited, it is quite possible that Southern states will have a more difficult time reaching these mandated work participation rates. As a result, states' maintenance of effort levels will likely have to increase to 80 percent.

Work Participation Rates Linked to Family Composition

One of the accompanying articles in this newsletter (An Overview of Major Provisions Associated with Welfare Reform), outlines the work participation rates that will be required over time for TANF participants. No doubt, family composition can prove instrumental in determining the participation rates that states will have to meet. In the case of single parent families, 25 percent must be engaged in work-related activities in FY97, with this figure increasing 5 percent each year until the year 2002, when the rate reaches 50 percent. Moreover, 75 percent of TANF families with two parents must be working in 1997, increasing to 90 percent by the year 2002. Welfare recipients that are child-only units (units that have no TANF eligible adult present), on the other hand, are exempt from the work participation requirements. Consequently, child-only units are not included in welfare caseloads that states are to use to calculate work participation rates of TANF participants (Zedlewski and Giannarelli, 1997).

The 1995 family composition profile of welfare recipients in the U.S. South is presented in Figure 1. Across many of the southern states, the proportion of single parent families on welfare is at or near the national average of 74.5 percent.

Table 3. Family Composition of Welfare Participant by Southern States, 1995

Source: Sheila Zedlewski and Linda Giannarelli. "Diversity among state welfare programs: implications for reform." Assessing the New Federalism: Issues and Options for States. The Urban Institute. Series 1 (January), 1997.

However, the percentage is much lower among families in Alabama (65.1 %) and South Carolina (66.4 %), and is considerably higher in the State of Oklahoma (81.4 %). In general, southern states have a significantly lower proportion of two-adult families on welfare than is the case in the U.S. as a whole. The lone exception is Kentucky, whose percentage of two-adult families on welfare is closely aligned with the national rate (6.9 % vs. 7.3 %). The area where the South clearly outdistances other parts of the U.S. is in terms of the percentage of welfare participants who are in child-only units. The proportion is especially high in Alabama (34 %), Arkansas (26.8 %), and South Carolina (31.7 %). Only Oklahoma has a percentage figure of child-only units that dips below the national rate of 18.2 percent.

Concluding Comment

There is little doubt that the changes being linked to welfare reform will present both opportunities and challenges for the South. In the near term, the sizable declines in welfare caseloads will likely to offer states additional flexibility in how family assistance block grants are expended. Over time, however, states will be faced with the task of ensuring that higher work participation targets for TANF recipients are realized, otherwise financial penalties will be levied by the federal government. The burden of meeting these participation rates will be less intense among Southern states having appreciable numbers of child-only units since such cases will be exempt from the work requirements. States with higher percentages of single-parent families on TANF, or with sizable numbers of two-adult TANF families, will face the greatest challenges in their efforts to successfully transition these individuals into the workforce.

References

McMurrer, Daniel P., Isabel V. Sawhill, and Robert I. Lerman. "Welfare reform and opportunity in the low-wage labor market." Assessing the New Federalism: Issues and Options for States; No. 5. The Urban Institute. 1997.

Zedlewski, Sheila and Linda Giannarelli. "Diversity among state welfare programs: implications for reform." Assessing the New Federalism: Issues and Options for States; No. 1. The Urban Institute. January 1997.

Bo Beaulieu is director of the Southern Rural Development Center.

If you want specific percentages related to Figure 1, contact the editor.

This new section of the newsletter will feature websites related to issues we are highlighting and those of interest to the rural development community. This month we offer sites with information about welfare reform,mostly from an annotated list compiled by Julie Zimmerman.

USDA Cooperative Extension System and the Land Grant Universities, WRREN: The Welfare Reform Research and Education Network.
www.cyfernet.mes.umn.edu/welfare.html

USDA Economic Research Service, Rural Conditions and Trends
The Adobe Acrobat is required but access information is at the website.
www.econ.ag.gov/epubs/pdf/rcat/rcat.htm
 
National Governor's Association
www.nga.org/CBP/Activities/Welfare Reform.asp

Center on Budget and Policy Priorities 
www.cbpp.org/TIMELINE2.HTM

Department of Labor 
www.dol.gov 

Department of Health and Human Services 
www.acf.dhhs.gov/news/welfare/wrpack.htm 

The Urban Institute's project "Assessing the New Federalism" 
www.urban.org/welfare/overview.htm 

Welfare Information Network 
www.welfareinfo.org/ 

Handsnet 
www.igc.apc.org/handsnet2/welfare.reform/index.html 

Department of Health and Human Services (guidelines for Tribes) 
www.acf.dhhs.gov/news/welfare/guidetrb.htm 

American Public Welfare Association's Welfare Information Center 
www.apwa.org 

National Association of Counties 
www.naco.org 
www.naco.org/nich/index.htm 

Children's Defense Fund 
www.childrensdefense.org 
www.childrensdefense.org/stateplans.html#features 

Department of Health and Human Services, Administration for Children and Families 
www.acfdhhs.gov/news/welfare 

National Association of Community Action Agencies 
www.nacaa.org/welrecs.htm 

Institute for Women's Policy Research 
www.epn.org/tcf/tcwelf.html (IWPR Welfare Reform Network) 

Twentieth Century Fund 
www.epn.org/tcf/tcwelf.html 

Rural Information Center at the National Agriculture Library 
www.nal.usda.gov/ric/ruralres/welfare.htm 

Center for Law and Social Policy (publication list) 
epn.org/clasp/publist.html 

National Conference of State Legislatures 
www.ncsl.org/statefed/welfare/workreq.htm 
www.ncsl.org/statefed/welfare/legal.htm 

Fairness and Accuracy in Reporting 
www.igc.apc.org/fair/extra/9505/welfare-myths.html 

Cabinet for Families and Children Welfare Reform pages (KY) 
cfc-chs.chr.state.ky.us/reform/reform.htm 
 
 Welfare Reform Academy
www.welfare-reform-academy.org

CHALLENGES TO WELFARE REFORM IN THE SOUTH

Frank M. Howell

As the welfare reform initiative gains momentum, the South faces an important challenge as a region with a heavy welfare burden among state governments. A change in entitlement programs in the 1996 reform act (PRWORA) institutes a maximum sixty-month "life-time" benefit window for TANF block-grant recipients. The expected transition of TANF beneficiaries to the labor force involves more than simply removing them from welfare rolls. It involves TANF beneficiaries actually finding paid employment somewhere in the extant labor force. We believe that this welfare-to-work transition constitutes the most important element of the welfare reform initiative among states in the U.S. because it reflects the most tenuous element of the "social contract" set by Congress in legitimating the PRWORA last year.

We are engaged in an ongoing study of this transition in Mississippi, a state with a historically high level of poverty and welfare beneficiaries as a proportion of its population. However, the remaining states in the South are undergoing similar challenges in the welfare reform process. We are engaged in an ongoing study of this transition in Mississippi, a state with a historically high level of poverty and welfare beneficiaries as a proportion of its population. However, the remaining states in the South are undergoing similar challenges in the welfare reform process. Data presented in the accompanying article by Beaulieu, "Welfare Participants in the U.S. South: A Statistical Profile," for example, are demonstrative of the significant reductions that have occurred in the level of AFDC/TANF caseloads across the Southern states. But, these data capture the "administrative" reform that has occurred in welfare, which is only a part of the true reform that has taken place in our social welfare system. Human capital, perhaps never developed among many beneficiaries (but certainly eroded from lack of employment) is another vital element of reforming the welfare system. The employability of welfare beneficiaries is a second element that must be addressed by states and plans obtaining approval by U.S. HHS contain some provisions for job training. But the third phase of welfare reform involves the successful transition to long-term paid employment and this depends on the viability of local labor markets to produce new jobs.

Declines in caseloads have been dramatic in just the past year as shown in Table 1, reflecting total TANF recipients between August 1996 and April 1997. In this nine-month interval, the "reform" of the welfare rolls reached 27 percent in Tennessee and 24 percent in South Carolina. Arkansas, in contrast, only had a 5 percent reduction in TANF beneficiaries during the past year.

While these impressive reductions do indeed constitute the first phase of reforming the welfare process, they do not tell us much about what happens to these former beneficiaries. Their prospects for employment largely depend upon how well their local labor market can generate new job growth. We have completed an initial study of this part of the welfare reform initiative (Howell 1997a). A brief summary is used to illustrate some preliminary results that can be used to study more fully how the rest of the South is faring in this third phase of the reform process. First, we took peak caseloads for AFDC in 1996 by county and adjusted them for estimates of recipients who were work-disabled. (Mississippi leads the deep South in work disability rates; see Howell 1997b). Then we amortized this 1996 cohort of AFDC recipients by the projected job growth that each county was expected to experience between 1996-1999, using proprietary data obtained from Woods and Poole Economics, Inc. This three-year amortization window appeared to us to best represent the job-search period under the five-year limit of TANF receipt. These data were then combined into a ratio of the adjusted number of AFDC recipients divided by the projected job growth, an index of "labor market absorption"for each county. Because labor markets tend to be defined by common commuting patterns, we aggregated these data into multi-county labor market areas in Mississippi to more adequately represent the job-search patterns of former welfare beneficiaries. These results are shown in Figure 1 for the 1996 AFDC cohort, taken from Howell (1997a).

What this analysis shows is how important it is to assess the spatial variation in the reduction of welfare rolls in each state. For instance, contrast the northeast part of the state around Tupelo and on the Gulf Coast to the core Delta labor markets in Mississippi. In the former labor market areas, there are several new jobs projected to be produced per ex-AFDC recipient while there are over 200 welfare recipients per new job projected to be produced in the Delta. Without taking the spatial variation of labor markets and welfare reform into account, it might be easy to deduce from statewide figures on reductions in welfare rolls in comparison to state job growth that all elements of welfare reform are fully functioning as articulated in the 1996 legislation. If reform initiatives expect welfare recipients to "act like non-welfare recipients" by seeking, finding, and accepting paid employment, then we should probably expect them to behave like others in the labor market in their job-seeking behavior. Thus, comparing the overall state figures in welfare reductions with the job growth of that state does not adequately capture the full context of the full welfare reform process. It is important for those who wish to understand how welfare reform in the South is truly working to study reductions in welfare rolls relative to local labor market conditions and the spatial variation in the production of new jobs. New research should be undertaken to produce the necessary information streams so that welfare reform can be monitored in the communities where reside and, hopefully, work.

References:

Beaulieu, Lionel J. "Welfare participants in the U.S. South: a statistical profile." Southern Perspectives, December. Southern Rural Development Center.1997. www.ext.msstate.edu/srdc

Howell, Frank M.. Mississippi: welfare reform and labor market capacity. Special Report Series, June. Mississippi State: Mississippi State University, Social Science Research Center. 1997a.. www.ssrc.msstate.edu/Publications/welfare.pdf]

Howell, Frank M. Mississippi: leads the region in work disability. Special Report Series, August. Mississippi State: Mississippi State University, Social Science Research Center. 1997b. www.ssrc.msstate.edu/Publications/disabled.pdf]

Frank Howell is a research scientist for the Social Science Research Center, and professor in the Department of Sociology, Anthropology and Social Work at Mississippi State University.

    Source: U.S. Department of Health and Human Services, Administration for Children and Families

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Meeting the Monthly Budget: Earnings and the Cost of Living in Rural Kentucky

Julie Zimmerman and Lori Garkovich

What would it take for a mother with two children to meet her monthly bills without relying on any type of government assistance? The answer to this question has become known as a "living wage." In some cities and states companies receiving sizeable government contracts or subsidies are being required to pay a wage that will keep their employees out of poverty. But to date, these efforts have been based on estimates of the cost of living in urban centers. Still unanswered is the question of what would it take to make ends meet in a rural area.

This research note describes the results of an effort to estimate the monthly cost of living for a single mother, 22 years of age, with two children, ages 4 and 6 years old, who live in rural Kentucky. Drawing on models used in urban areas, adjustments were made for rural/urban differences and a monthly budget calculated for a geographically diverse sample of seven rural Kentucky counties. This minimum monthly budget is then compared both to the minimum wage and the current poverty threshold for a family of three.

A living wage is that amount of income necessary for a family to meet their minimum monthly costs. Included in this are the costs for housing and the utilities, food, child care, transportation, and basic household and personal care items. Not included are costs for things such as health care or health insurance, entertainment, birthday or other gifts, toys, tobacco products or alcohol.

Actual costs for items such as rent, utilities, phone service, and child care were obtained from county Extension agents, local Chambers of Commerce, and other local contracts. Since estimates of urban cost of living assume the use of public transportation which simply is not available in rural places, estimates of the cost and usage of a personal vehicle were also determined. These were based on the actual local costs of gasoline; the average age of a vehicle from the National Personal Transportation Survey; and an estimated cost for auto insurance for a woman age 22, licensed since she was 16, with no traffic violations, and driving a 1987 two door hatch-back. Where possible, comparisons have been made with the 1994-95 Consumer Expenditure Survey to provide a fuller understanding of cost differentials between rural Kentucky and national averages.

The cost of living in rural Kentucky is $1,689 a month. This would require a wage of $10.13 an hour. If a single mother worked 2,000 hours a year, the standard for full-time employment, at the current minimum wage of $5.15 an hour, she would earn $10,300 a year. If this single mother had two dependent children, these wages would not bring her and her children above $12,677 per year, the current poverty threshold for a family of three. This means that to meet the minimum cost of living in rural Kentucky for a family of three, a single working mother would need to earn an additional $4.98 an hour, or $831 a month, or $9,968 a year on top of the minimum wage.

Calculating a minimum monthly cost of living budget for rural families is critical to assessing the implications and challenges of welfare reform. Welfare reform has been built upon the presumption that moving adults into employment will eliminate the lifetime need for income maintenance assistance beyond 60 months. Yet this assumption is valid only if the rural labor market provides job opportunities with wages sufficient to meet monthly costs of living. Given the predominance of low-wage industries in rural areas, this analysis suggests that single mothers in rural areas will face great challenges in meeting their families' minimum needs even if employed full-time.

Julie N. Zimmerman is assistant professor, and Lori Garkovich, professor, in the Department of Sociology at the University of Kentucky.

This column will contain short articles of interest that are not directly related to the theme of the issue. Look to this column for reports of projects, workshops, conferences and related items from SRDC and the other rural development centers.

Fund for Rural America Award

The Southern Rural Development Center applied for and received a center planning grant from Fund for Rural America, a competitive grants program of USDA. The SRDC proposal was combined with one from Rural Policy Research Institute (RUPRI) and National Association of Counties (NACo). The three institutions formed a partnership and are developing a full proposal for a Center for Policy Devolution and the Rural South.

The proposed Center will enable residents of the rural South and other selected subregions of the United States to adjust to federal initiatives that are shifting responsibilities and risks from the federal level to individuals, states and local governments. It will undertake policy analyses to assess the likely impacts of devolution policies on rural people and places in the South. Strategies for ameliorating the negative impacts of devolution will be explored as well. Furthermore, technical assistance will be available for local decisionmakers seeking access to quantitative analytic models and other decision-support tools commonly available only to leaders situated in metropolitan locales.

An additional key component of the proposed Center's work will focus on the design and delivery of needed outreach education and training activities that can further enhance the capacity of rural communities to develop and implement action plans that effectively deal with policy devolution impacts at the local level.

Focus groups are currently being held to gain input from individual clientele and collaborating groups which include a number of universities, boards and associations around the nation.

Southern Rural Development Consortium

In an effort to further strengthen our communication with land grant faculty involved in social science activities in the rural South, the SRDC is establishing a Southern Rural Development Consortium. The intent is to further enhance communications between the SRDC and land grant faculty in the region. Individuals who are part of the Consortium will receive periodic updates from the SRDC on grant/contract opportunities. Also, it is our expectation that the consortium list will prove invaluable to us in identifying individuals having specialized rural development expertise (i.e., labor markets, rural health, rural education, etc.). As grant opportunities relevant to the priority issues of the SRDC present themselves, we want to quickly identify the pool of social scientists in the South that we can invite to work in partnership with us in the development and implementation of these grants.

The Consortium is available to any land grant faculty member with interest in rural development issues. This includes faculty in agricultural economics, rural sociology, youth development, human sciences, education, or other related disciplines. To join the Southern Rural Development Consortium, all you need to do is complete a member profile form and return it to the Center. The form is available on the Internet at www.ext.msstate.edu/srdc/grants/form.htm. If you need a paper copy of the form, call the Center at 601-325-3207 or e-mail jacquet@mces.msstate.edu.

Please feel free to contact the Center if you have questions. We look forward to receiving your completed membership form.
 

ZERLE L. CARPENTER will retire as Director of the Texas Agricultural Extension Service effective December 31. He formerly served as professor and department chair of Animal Science at Texas A&M University. Dr. Carpenter recently completed a term as chair of the Extension Committee on Organization and Policy (ECOP) and he continues to serve on the Executive Committee of the National Agricultural Research, Extension, Education and Economics Advisory Board.

FRED WOODS of CSREES Economic and Community Systems unit received the R.J. Hildreth Award for Career Achievement in Public Policy Education during the 1997 National Public Policy Education Conference in Charleston, S.C. The award is sponsored by Farm Foundation and the National Public Policy Education Committee. It recognizes individuals who have demonstrated career excellence in public policy education. Also recognized with the award were ALAN J. HAHN, Cornell University, and IRVIN W. SKELTON, University of Alaska Fairbanks (retired). At the same meeting, BONNIE BRAUN and JEAN W. BAUER, both of the University of Minnesota, received the Outstanding Achievement in Public Issues Education Award for their educational program "Responding Knowledgeably: From Welfare Reform to Well-Being."
 
 

 A Mosaic of the Rural Midwest: Formulating and Utilizing a Geodemographic Clustering System for Census Block Groups in the Twelve Midwestern States, was published by the North Central Regional Center for Rural Development. The report successfully demonstrates the power and utility of clustered geography in applied research. The authors, Marc J. Perry and Paul R. Voss, document the process by which a geodemographic cluster system was created for the 60,000 census block groups in 12 states. The report (RRD 178) is available for $9 from NCRCRD, Iowa State University, 404 East Hall, Ames, IA 50011-1070; 515-294-8321, e-mail jstewart@iastate.edu.

The Demography of Rural Life - edited by David L. Brown, Donald Field and James J. Zuiches was released in 1993 by the Northeast Regional Center for Rural Development. The publication is a collection of essays on the status and future directions of rural demography. They were taken from a symposium honoring the work of the editors' former graduate professor, mentor and noted rural demographer, Glenn V. Fuguitt. SRDC has a few copies remaining. If you want a copy, contact the Center or e-mail sandyp@mces.msstate.edu.

Implementing Local Business Retention and Expansion Visitation Programs is a new set of materials available from the Northeast Regional Center for Rural Development (NERCRD). BR&E Visitation programs catalyze on local economic development efforts by creating a team of local leaders to help the community improve its business climate. Previous manuals about BR&E Visitation programs often have focused on instructions for professional economic developers. These materials take a different approach. They are designed to help guide community leaders through the process. Development support for the materials was provided in part by the NRCRD. The package includes a notebook, marketing brochures, five training booklets and a video. The cost is $40 plus shipping and handling charges. For more information or to order, contact the Northeast Regional Center for Rural Development, 7 Armsby Building, The Pennsylvania State University, University Park, Pennsylvania 16802-5602, 814-863-4656. Ask for Daryl Heasley or Eileen Zuber.

Post-Industrial Rural Development: The Role of Natural Resources and the Environment is the proceedings of a workshop held in March 1996. The meeting brought together government and non government experts from the biological, physical and social sciences to identify and discuss the principal issues, barriers and opportunities related to natural resource use and environmental protection in the U.S. The workshop generated numerous topics for discussion and areas for new research, but it also highlighted the growing complexity of natural resource decisions facing America and other regions of the world. The cost is $9. Order it from the North Central Regional Center for Rural Development, Iowa State University, 404 East Hall, Ames, IA 50011-1070, 515-294-8321, e-mail: jstewart@iastate.edu.

Value-Added Agriculture: A Resource Kit for Communities and Businesses To Create Success for Rural Businesses and Communities by Working Together, a set of educational materials, was prepared for and used at a value-added training workshop entitled "New Gates Through Old Fences."The workshop held in March 1997 in the Four Corners region was sponsored in part by the Western Rural Development Center. This collection of materials from across the country is intended to help individuals identify how they can proceed to capitalize on adding value to agricultural products that will benefit the entire community. Copying costs for the curriculum is about $75. For more information contact the Western Rural Development Center, 307 Ballard Extension Hall, Oregon State University, Corvallis, OR 97331, 541-737-3621, or visit the Four-Corners States Regional Education Initiative web site at ag.arizona.edu/AREC/VAA/ValueAddedAg.html.

At their annual meeting in November, the SRDC board of directors approved a 1998 Extension and Research Plan of Work (POW). The POW outlines an ambitious plan for work relating to five issue areas:

1. 1. Strengthen and support the capacity of Southern land grant institutions and their partners to conduct rural development research and outreach education programming.
2. 2. Enhance the economic, environmental and social well being of rural communities and people.
3. 3. Strengthen the human capital resources of the region's rural communities.
4. 4. Improve rural Southerners' access to vital community services.
5. 5. Enhance the capacity of rural people and communities to carry out their expanded responsibilities in the design, management, and financing of government programs.

The Center staff is excited about the challenges presented in the Plan of Work. For a copy of the plan, contact the Center.

55th Professional Agricultural Workers Conference, December 7-9, Tuskegee, Alabama. Plenary sessions, work group and workshop sessions will address the theme, "Access and Equity Issues in Policies and Programs for Agriculture and Rural Development." Two pre conference committee meetings will be held December 6-7: Committee on Opportunities and Status of Blacks in Agricultural Economics and Forestry/Natural Resources Program Advisory Committee. For additional information contact PAWC Coordinators Ntam Baharayni, 334-727-8454, e-mail: baharany@acd.tusk.edu or Robert Zabawa, 334-727-8114, e-mail zabawar@acd.tusk.edu. Visit the PAWC website at Pawc.tusk.edu/AgHe%20Website.mainpage.html.

Southern Association of Agricultural Scientists (SAAS), January 31-February 4, 1998, Little Rock, Arkansas. This is the 95^th annual meeting. There is no pre-registration. The registration fee is $30 payable on-site at your individual society or association desk along with any fees they require. Hotel registration deadline is December 29. SAAS has a home page with 1998 convention information. Check it at cals.agnis.vt.edu/~saas/ for housing forms and program announcements. For other information contact Vernon Boggs, 111 Hutcheson Hall, Va Tech, Blacksburg, VA 24061-0402, 540-231-6295, e-mail vboggs@vt.edu

Southern Rural Sociological Association (SRSA), January 31-February 4, 1998, Little Rock, Arkansas. The meeting is in association with SAAS (see earlier entry). This year's theme is "Regenerating Communities in the Rural South: New Identities, Collaborations and Responses to Devolution." For program information contact Rosalind P. Harris, Department of Sociology, University of Kentucky, 500 Garrigus Building, Lexington, KY 40546-0215, 606-2577584, e-mail rharris@pop.uky.edu.

CYFAR 98...Programs that Work Conference, March 16-18, 1998, Tucson, Arizona. This conference provides an opportunity for Extension staff, collaborators, and volunteers working toward the Children, Youth and Families at Risk mission, to work collectively to sustain effective community-based programs and share resources with others across the nation. Conference sessions will provide information on curricula, needs assessment, coalition building, administration of programs, resource development, diversity, Internet access, marketing impact and evaluation. A major focus of CYFAR 98 will be sustainability of community-based programs and of organizational changes which have been developed in their support. This meeting will recognize accomplishments of the Youth at Risk projects which moved into base programs in 1997. Conference registration forms and lodging reservation information will be available in January 1998. Check the CYFAR home page for additional details: www.reeusda.gov/new/4h/cyfar/cyfar_98.htm

NSSI Skills Enhancement Workshop, March 22-25, 1998, St. Louis Airport Hilton. The National Small Stores Institute (NSSI) team was established as part of the USDA National Initiative, Communities in Economic Transition. The team is working to focus on retail trade development education. The NSSI mission is to strengthen, through educational processes, the knowledge, perspectives and skills of field professionals who provide assistance to people who own and operate small retail businesses throughout the U.S. Information on specific details of the meeting and registration will be announced as it becomes available.

Southern Regional Science Association Meetings, April 2-4, 1998, Savannah, Georgia. The 37th annual meeting will be at the Hyatt Regency Hotel. The program committee welcomes papers on a wide range of topics including all aspects of regional modeling, international trade, resource utilization, environmental quality, transportation systems, tourism and recreation, economic impact analysis, urban and rural economic development, location of economic activity, land use planning and regulation, regional migration, labor markets, regional development issues and policy, and public finance and investment analysis. Contact Andy Bernat, Regional Economic Analysis Division (BE-61), Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230, e-mail andrew.bernat@bea.doc.gov.

National Extension Tourism Conference '98, May 17-19, Grantville, Pennsylvania. This meeting will be a forum for tourism, travel, and outdoor recreation policy, development and marketing. It is intended for Extension personnel, Sea Grant and other tourism-related faculty, RC&D staff and others interested in tourism development, policy and markets. There is a $140 registration fee. Registration brochures will be mailed February 15, 1998. To receive a brochure, send your name and address to National Extension Tourism Conference, Conference and Short Courses Office, The Pennsylvania State University, 306 Ag Administration Building, University Park, PA 16802, 814-865-8301, E-mail Gary Peterson: grpl@psu.edu or look at the website at www.cas.psu.edu/docs/casconf/nercrd/NTC/ntc.html

Editor's Note: As you have noticed, the Southern Rural Development Center has a new logo. We would like to thank George Taylor, chief illustrator of the Department of Agricultural Communications, Mississippi State University for the logo design and "new look" of SRDC's newsletter and other communication pieces. We appreciate the continued support of Julia Heard, leader, Graphic/Photography and the entire Agricultural Communications Department of MSU.

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Southern Perspectives is published quarterly by 

Southern Rural Development Center
Box 9656, #6 Montgomery Drive
Mississippi State, MS 39762
Phone: 601-325-3207
Fax: 601-325-8915
www.ext.msstate.edu/srdc

Lionel J. Beaulieu, Director
Jacqueline Tisdale, Editor 
(Send comments to jacquet@mces.msstate.edu.)
Mississippi State University does not discriminate on the basis of race, color, religion, national origin, sex, age handicap/disability, or veteran status.

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