University of Wisconsin-Milwaukee
Employment and Training Institute

Brief Summary

Demographics of Milwaukee County Populations Expected to Work Under Proposed Welfare Initiatives

by John Pawasarat and Lois M. Quinn, Employment and Training Institute, University of Wisconsin-Milwaukee, November 1995

The University of Wisconsin-Milwaukee Employment and Training Institute was asked to provide a detailed demographic analysis of Milwaukee County cases on public assistance and the working poor to assist policy makers in discussions of current welfare reform proposals.

  • In contrast to statewide AFDC trends which showed caseload reductions as a result of the economic recovery beginning during 1987-89, the average monthly AFDC population in Milwaukee County has remained steady at about 37,000 cases throughout the last ten years. Declines in the number of two-parent AFDC cases have been offset by increases in single parent cases. Aside from modest decreases in 1989, these cases have shown little responsiveness to improvements in the county unemployment rate.

  • An estimated 30,448 out of 37,415 cases on AFDC in Milwaukee County would be expected to work under the state's W-2 welfare reform proposal, and 6,967 cases would be exempt because the casehead is on SSI or caring for another relative's children.
  • Thirty percent of the expected-to-work cases have children under 2 years of age and are currently exempt from work program requirements.
  • The AFDC casehead expected to work on average has 2.4 children, is a single parent (90 percent), has less than 12 years of education (51 percent), and receives $481 in AFDC cash assistance and $213 in food stamps each month. The majority of these caseheads are minorities with 68 percent Black, 9 percent Hispanic, 2 percent Asian/Oriental, 1 percent Native American and 19 percent white. The average length of stay on AFDC is 31 months for the most recent episode of assistance.

  • Seventy percent of the expected-to-work cases reside in the central city (Community Development Block Grant) neighborhoods of Milwaukee.

The AFDC population was examined by subpopulations to project caseload employment patterns and develop estimates of the number of community service jobs likely needed under W-2 type welfare proposals.

  • Much of the AFDC population is currently employed or has recent labor market attachment. Based on historical and recent caseload data, it is estimated that one-third of the monthly AFDC caseload would remain employed or increase their earnings on their own and would not seek out W-2 minimum wage subsidized employment. These are mainly families with older children and caseheads who are better educated and have demonstrated work skills. They are the population least likely to benefit from intervention.
  • As much as one-third of the current caseload has no recent labor market experience and represents a high-risk, high-cost difficult-to-employ population. These caseheads are usually younger, less educated, and have more children. Child care is a serious impediment for these families with most cases having at least one child under two years of age. These cases are also likely to have difficulty complying with stringent work program requirements.
  • Some caseheads may leave the area or rely upon other financial resources in their household rather than accept employment under W-2. It is estimated that at least 7 percent of the population will endure the loss of their AFDC cash grant (partially offset by food stamp increases) or move.
  • The residual portion of the AFDC caseload (about 25 percent of the cases) includes those caseheads most likely to benefit from government employment assistance. These are families with limited labor market experience but with youngest children over two years of age. Some type of subsidized employment would be necessary for much of this population to provide income or to supplement part-time wages in the private sector. Few full-time entry level jobs exist for this population, particularly in the central city where the population is most heavily concentrated.
  • It is estimated that a minimum of 10,000 individuals in Milwaukee County will not be successful in attaining private sector employment and may need subsidized jobs under current welfare reform proposals which would replace AFDC with a work based program.

Changes in federal disability programs together with cuts in federal entitlement programs could jeopardize welfare reform initiatives currently being proposed by expanding the population in need of assistance while reducing financial assistance funds allocated to states. As Congress replaces the current AFDC system with cash assistance block grants to the States, it is also reducing and capping disability programs. These changes could dramatically shift costs for the county's disabled population to the new block grants and remaining state and county-funded social welfare programs.

  • Milwaukee County residents received an estimated $2.35 billion in 1993 from seven major entitlement programs, including social security, disability insurance (SSA-DI), medical assistance, Aid to Families with Dependent Children (AFDC), Supplemental Security Income (SSI), food stamps and unemployment compensation. The interaction among these programs becomes increasingly important as federal, state and local governments consider reductions in their financial support for low-income populations.

    During the past ten years, state and local officials have encouraged the movement of disabled adults from AFDC (40 percent state-funded) and the general assistance program (100 percent county-funded) onto the federal SSI, Social Security and disability insurance programs. These efforts along with a federal court decision broadening eligibility of children for SSI have resulted in a substantial shifting of costs from AFDC to SSI and SSA-DI for a subset of the low-income Milwaukee County population.

  • Current federal proposals to reform these disability programs will reverse the burden for these programs to either state or county programs. The SSI disability program for children will likely be the first most visible change, followed by restructuring of the adult disability programs. The number of Milwaukee County children receiving SSI benefits increased almost five-fold from 2,106 in December 1986 to 9,667 in June 1995.

    Current federal proposals would limit eligibility only to those children who need constant care to avoid being institutionalized. This would result in an 80 percent reduction estimated to be at least $45 million annually for Milwaukee County families.

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