Government Matters: Welfare Reform in Wisconsin

Government Matters: Welfare Reform in Wisconsin

by Lawrence M. Mead


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Government Matters: Welfare Reform in Wisconsin by Lawrence M. Mead

"Good government" is commonly seen either as a formidable challenge, a distant dream, or an oxymoron, and yet it is the reason why Wisconsin led America toward welfare reform. In this book, Lawrence Mead shows in depth what the Badger State did and—just as important—how it was done. Wisconsin's welfare reform was the most radical in the country, and it began far earlier than that in most other states. It was the achievement of legislators and administrators who were unusually high-minded and effective by national standards. Their decade-long struggle to overhaul welfare is a gripping story that inspires hope for better solutions to poverty nationwide.

Mead shows that Wisconsin succeeded—not just because it did the right things, but because its government was unusually masterful. Politicians collaborated across partisan lines, and administrators showed initiative and creativity in revamping welfare. Although Wisconsin erred at some points, it achieved promising policies, which then had good outcomes in terms of higher employment and reduced dependency. Mead also shows that these lessons hold nationally. It is states with strong good-government traditions, such as Wisconsin, that typically have implemented welfare reform best. Thus, solutions to poverty must finally look past policies and programs to the capacities of government itself. Although governmental quality is uneven across the states, it is also improving, and that bodes well for better antipoverty policies in the future.

Product Details

ISBN-13: 9780691116464
Publisher: Princeton University Press
Publication date: 02/02/2004
Pages: 368
Product dimensions: 6.38(w) x 9.48(h) x 1.10(d)

About the Author

Lawrence M. Mead is Professor of Politics at New York University. His books, including Beyond Entitlement (Free Press), The New Politics of Poverty (Basic Books), and The New Paternalism, have helped shape welfare reform both in this country and abroad.

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Government Matters

Welfare Reform in Wisconsin

Chapter One


IN THE MID-1980S, welfare was in chronic crisis in Wisconsin, as in much of America. "Welfare" here means the controversial aid program for needy families once called Aid to Families with Dependent Children (AFDC) and now named Temporary Assistance for Needy Families (TANF). The welfare rolls in Wisconsin reached 100,000 families and 300,000 people in 1986-in a population of only 5 million. The state, like the nation, had struggled with rising welfare dependency since the 1960s, and no solution seemed in sight.

But in little more than a decade, the situation was transformed. The Badger State became home to the most radical welfare reform in the nation. Welfare in its traditional form was virtually abolished. The vast majority of recipients were driven off the rolls, mostly into jobs, while those who remain must work at some level to get any cash aid. At the same time, unprecedented new benefits were offered to the entire low-income working population. This revolution transformed the welfare state and the lives of many former recipients, mostly for good.

I ask two questions in this book. First, what did Wisconsin do? I show in some detail how the Wisconsin reform developed. Starting in 1986, the state instituted a series of experimental programs in welfare. Most of them stiffened requirements that adult recipients work in return for aid. The changes culminated in the radical Wisconsin Works (W-2), a new aid system implemented in 1997. The effects of the reforms seem remarkably positive. Not only did dependency plummet, but work levels among low-income adults soared while poverty fell. Many former recipients remain poor, but incomes are rising.

After a generation of defeatism about uplifting the inner city, Wisconsin exemplifies a new and more promising antipoverty policy. The solution to poverty is no longer seen as doing more or less for the poor, the traditional debate among liberals and conservatives. Rather, it requires restructuring welfare so as to promote recovery from poverty. That means supporting families and helping needy adults work and stay in school. But it also requires clearer expectations that recipients function in minimal ways in return for support. In Wisconsin, we see for the first time, and on a large scale, what such a policy means in practice.

Wisconsin is also a showcase for an innovative style of programming that I call paternalism. The state not only makes greater demands on its recipients. It supervises them closely to make sure that they fulfill those expectations, as well as claim benefits they qualify for. Paternalism combines benefits with demands, help with hassle. Alongside conduct requirements, this intense administrative style is a promising trend in social policy. It became a theme in Wisconsin in several areas of social policy besides welfare.

My second and more important question is: How did Wisconsin accomplish this? The simple answer is: good government. The Wisconsin reform is the achievement of legislators and administrators who were unusually able and conscientious by national standards. Welfare reform is a test for government. Elected leaders must agree on what demands will be made of the poor in return for support, questions that have bitterly divided politicians in the past. And then officials must create complex arrangements so that families are aided while, at the same time, parents are inducted into work programs and given the child care and other services they need to work. To do this well was a triumph for government. Thus, ironically, a reform that most would call conservative finally enlarges our sense of what antipoverty policy might achieve.

The Wisconsin story makes clear how dependent successful social reform is on strong institutions. I will show that, not only this state, but others with good-government traditions have led welfare reform across the country. Their success is inspiring, but also cautionary. Only some states perform at this level. Wisconsin finally directs our attention beyond welfare to the capacity of the American regime.


Of course, successful welfare reform is hardly confined to Wisconsin. The welfare rolls fell nationwide starting in 1994. The fall was accelerated by the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996. Drafted by the conservative Republicans who took control of Congress in 1994, PRWORA was the most radical welfare reform ever enacted in Washington. Besides changing AFDC into TANF, it capped federal funding for state welfare programs, limited most families to five years on the rolls, and sharply raised the share of welfare parents who were expected to work. Coupled with superb economic conditions and expanded wage and child care subsidies, welfare reform drove the national caseload down by 60 percent through June 2002. Virtually all states shared in that progress.

In Wisconsin, however, both the what and the how were still special. First, the state's reform was unusually thoroughgoing. Most states have simply added stronger work requirements and incentives to a welfare system that, in other respects, changed little. Wisconsin totally redesigned family aid from the ground up. W-2 is, by common consent, the most innovative aid system in the nation. It demands immediate work with uncommon severity, but it also promotes work with its lavish support benefits, and it has other special features.

Second, the consequences of reform in Wisconsin seem unusually favorable. Like no other urban state, Wisconsin virtually destroyed traditional welfare. Figure 1.1 contrasts trends in the Wisconsin and national case-loads during 1980-2001. The decline in Wisconsin began unusually early-in 1986-and the state avoided almost entirely the sharp run-up in recipients that hit most of the country between 1989 and 1994. In the average state, that jump was a startling 34 percent, an increase that helped put welfare reform on the national agenda, leading to PRWORA. In Wisconsin, the caseload fell almost continually from 1986, and by 2001, the decrease was around 80 percent from 1986, with fewer than 10,000 families remaining on W-2 cash benefits.1 One might imagine that Wisconsin merely reversed a level of dependency that was high for the nation. Figure 1.2 plots trends in the percent of population on AFDC/TANF in Wisconsin and nationally. It is true that Wisconsin rose well above the national norm in the 1980s-but by 2001 it was well below.

Table 1.1 shows how much each state and the District of Columbia reduced the number of recipients on their rolls between 1994, when the national caseload peaked, and 2001. At 82 percent, Wisconsin comes behind only Wyoming and Idaho and well ahead of other urban states paying high benefits. Even in Milwaukee, a heavily nonwhite and depressed city, traditional family welfare almost disappeared. The table also understates Wisconsin's achievement. By 1994, the state had already driven its more employable recipients off the rolls-yet after that it still managed almost the greatest caseload fall in the country.

Another, perhaps better measure of change is how fully a state required work for the recipients remaining on welfare. Table 1.2 ranks the states by the percentage of their recipients who satisfied TANF's work participation standards in fiscal 2000. Those rules required that adults be active in work activities (defined to mean largely actual work, but permitting some training) for at least thirty hours a week. Again, Wisconsin ranks almost first in the country, ahead of all other urban states. This despite the fact that, due to its extreme caseload deflation, its remaining recipients were probably among the less employable in the country.

The Wisconsin reform also excels by a still more important measure-the effects on former recipients and the society. Nationwide, research on adults who have left welfare finds the effects to be largely positive. Three-fifths or more of the leavers are working, and although some are not, there is little evidence of hardship. Work levels among the poor are sharply higher, and poverty rates are falling, albeit more slowly. The effects on families and children also appear largely favorable.2 The recipients Wisconsin expects to work might be more disadvantaged than elsewhere, yet the proportions of leavers who are working and getting by are similar to those in other states. And work levels among poor parents on and off welfare are unusually high. Like no other state, Wisconsin has moved poor families not only off welfare but into jobs.

These achievements brought Wisconsin extraordinary publicity. By the early 1990s, the innovations in the Badger State, and its ability to reduce the rolls when they were rising elsewhere, drew national attention. Jason DeParle of the New York Times chronicled the Wisconsin reform for a national audience, while other journalists wrote it up for their own states.3 Officials from around the country and from foreign countries flocked to the state to see for themselves, as did an army of researchers.4 And from publicity sprang influence. As the principal leader of the reform, Wisconsin Governor Tommy Thompson became a national power broker on welfare. Without Wisconsin's example, PRWORA would have been less radical.


The how of the Wisconsin reform, however, is as important as the what. The American public has expressed rising cynicism about government since the 1960s. A leading reason was the inability of government to solve chronic national problems, among them entrenched poverty and dependency. Impatience with the liberal social programs of the 1960s and 1970s helped drive the nation's politics to the right, but Republicans initially had little more success dealing with poverty than did Democrats. And of all social programs, welfare was the most unpopular.

Into this disconsolate scene, the Wisconsin success blew like a fresh wind. Here we see a popular government, in response to the public will, truly facing up to welfare and mastering it, at least in part. The governor and earnest legislators focused on solutions, downplaying partisanship. They quickly settled on a work-based approach, followed it for some years, then boldly enacted a completely new system. They delegated the details to talented administrators who implemented the new programs masterfully, if not without error. They even saved money in the process.

To see how unusual Wisconsin is, we have only to look elsewhere. All states claim to have reformed welfare, but in many, there is less real change than meets the eye. While the caseload fall is substantial everywhere, few of the more urban, Northern states rank high in table 1.1. That reflects in part their deep divisions about how to change welfare. On the other hand, few southern states rank high in table 1.2. They are willing and able to restrict aid, but as yet lack the bureaucratic capacity to build work into welfare. Only a handful of states have been able to enforce work in welfare seriously without stumbling. Of these, Wisconsin is the most remarkable. It has actually done what other states talk about.

It has recently been fashionable in political science to assume that behavior in politics is driven by self-interest. But often in politics, people act out of moral convictions or loyalty to the community, even though doing so does not serve their own interest in any material sense.5 Such behavior was conspicuous during welfare reform in Wisconsin:

  • Governor Tommy Thompson and Democratic opponents in the legislature abandoned long-held positions in order to craft reforms that are simultaneously big-government and demanding toward the recipients. Only a minority of either party dissented.
  • The move to abolish traditional welfare was led by a black Democrat representing inner-city Milwaukee. His own constituents pressed him to do this. Reform never became a race issue.
  • Community groups, although reflexively liberal in the past, accepted the end of entitlement and confined their criticism to details.
  • Business groups supported reform by launching experimental reform programs of their own.
  • Some counties forged their own welfare reform programs without waiting for the state government in Madison, and some of these became models for the state.
  • Counties competed to host various Thompson experiments in welfare reform, despite the political dangers and the trouble of changing their administrative routines.
  • Welfare staffs throughout the state implemented statewide reforms diligently, even though the reduction in the caseload would ultimately cost some of them their jobs.
  • The recipients endured a revolution in their lives. The vast majority left welfare and shouldered more responsibility for themselves with considerable resourcefulness and little complaint.

To explain conduct like this, some appeal to virtue is simply unavoidable. This fact alone compels our admiration.

I do not deny that self-interest also operated. Given the forceful public will to change welfare, legislators of both parties, and administrators, had every incentive to support reform. Nor were altruistic motives lacking in less gifted states. I say only that the reform process in Wisconsin was high-minded relative to the norm in American politics. That quality helped policymakers avoid divisions and other problems that prevented change elsewhere.


Most scholars understand social programs in economic terms. Welfare is seen as a source of income, training programs as a source of human capital. Instead, this book takes an institutional approach. I view programs more as authority structures that do or do not govern the society. Mostly, welfare reform is not about changing the economic scale of welfare or enriching the skills of recipients. Much more, it means attaching requirements for good behavior to existing benefits. Authority is even more important if programs have the paternalistic character that they developed in Wisconsin, where case managers closely oversee clients.

I investigate not only program structures but the government institutions standing behind them. Other scholars ask whether social programs are sufficient to overcome poverty. I ask whether government is even able to enact and administer such programs. To do so, politicians must resolve sensitive issues about personal responsibility that earlier they delegated to social workers. Administrators must implement complicated programs. They also must do so in an era when public service is less admired than it was before 1960. In the last generation, government has lost prestige compared to the private sector. There is a widespread desire that it be "reinvented" on a business model.6 That demand shaped welfare reform even in big-government Wisconsin.


Excerpted from Government Matters by Lawrence M. Mead Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Preface ix

List of Acronyms xiii


Introduction 1


The Development of Reform 18


The Politics of Reform 37


Implementing Work Requirements 63


Local Variations 79


The Emergence of W-2 107


Implementing W-2 132


Paternalism 157


The Decline of Welfare 175


The Effects of Reform 193


Welfare Reform and Good Government 214


Origins of Excellence 245


Implications 261

Notes 279

Index 341

What People are Saying About This

Ron Haskins

This spectacular volume adds greatly to the breadth of Mead's groundbreaking work on welfare reform. From Beyond Entitlement to The New Politics of Poverty to The New Paternalism, Mead has been a step ahead of other welfare researchers in showing the connections between effective government, welfare reform, and increased work and earnings. Now he provides a wonderfully detailed study of these interconnections in a particular state. By studying the politics and legislation, the implementation, and the outcomes of several waves of welfare reform in Wisconsin, Mead produces the most complete and far-reaching account ever written of how good government can improve the lives of the poor.
Ron Haskins, Brookings Institution and the Annie E. Casey Foundation

Eugene Bardach

This book is extremely important not just to one field but to many: welfare policy, public management, political science, and policy analysis. It is just outstanding in every way. It is a masterly synthesis of complex ideas and complex bodies of evidence. It makes use of both quantitative and qualitative evidence, which is highly unusual. It brings together history and more traditional social science. It is both descriptive/analytical and prescriptive/normative. The prose is clear and simple.
Eugene Bardach, University of California, Berkeley, author of "A Practical Guide for Policy Analysis"

Mark Rom

Larry Mead is a superb scholar and writer. He has written some of the most influential books on social welfare policy in the United States. Government Matters represents both excellent scholarship and a valuable and solid contribution to the field of welfare politics and policy, by focusing on how policies are developed and implemented successfully. It deserves to be widely read.
Mark Rom, Georgetown University, author of "Public Spirit in the Thrift Tragedy"

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