One of the most common criticisms of social welfare programs like Medicare, SNAP, and housing assistance is that they have little to no work requirements for those receiving benefits. There are millions of people who are enrolled in these programs, but there is little that they do to help the beneficiaries get off the rolls and back into employment. However, a recent executive order takes aim at this issue, with the goal of re-shifting the entire focus of the programs.
In early April, President Donald Trump signed an executive order that directs federal benefit agencies to focus more on getting people back to work than just increasing their enrollment numbers. The objective, according to poverty studies scholar Robert Doar, is to help people move themselves out of poverty.
What, specifically, needs to be addressed? Too many healthy, working-age American adults are not working but receiving significant government-funded help. The programs providing that assistance have done little to help these individuals spring out of poverty, and their funding is often structured to create incentives to add more people to their rolls. In such situations, antipoverty programs wind up inadvertently inhibiting work and upward mobility.
Nearly nine years into an economic recovery, one of the biggest obstacles that yet remains is a low labor force participation rate. The unemployment rate is officially around 4.1%, but the bigger picture shows that millions of working-age people are out of the labor force, not seeking work at all; generous social welfare programs without work requirements are part of the reason for so many sticking on the sidelines.
But even for those who are looking for work, one of the issues is that these programs don't help people with what they really need: a job.
The gulf between today’s welfare policy and work was starkly visible when I crisscrossed the country as a member of the Congressionally appointed National Commission on Hunger. At one point, a food stamp recipient, a healthy man in his thirties, blurted out: “That program [SNAP] is great at getting me an EBT [food stamp] card to buy food, but it does nothing to get me a job.” If welfare programs are not actively helping the poor gain employment, they cannot truly fulfill their mission to end poverty.
Until this executive order, the Trump administration's progress on work requirements had been mixed, but this new development will greatly help people in the long-run by incentivizing reentering the labor force. Only a few states have opted to change their work requirements, but the new order requires an entire paradigm shift in social welfare from these agencies, while also giving the states some flexibility to implement standards based on their respective situations.
The order the president signed yesterday is a reasonable and productive place to start. Critically, it directs federal departments such as Agriculture and Housing to review the guidance documents that relate to work, and to follow the CMS administrator’s lead in using whatever authority they have to fight poverty more effectively through work requirements. The document is focused on outcomes, though it provides flexibility for states. It also ensures that program administrators around the country are accountable for achieving desired goals by requiring them to report results to overseeing agencies.
Is this going to be the big change that will really help move people out of poverty? That remains to be seen, but when major workfare legislation was signed into law in the 1990s, it helped millions of Americans transition out of poverty and into self-sufficiency. That's the best way out of poverty.
What are some other ways to help Americans move up the socioeconomic ladder? Is this order from the White House going to be the big boost that's needs? Share your thoughts with us!