Though often eclipsed by the crime decline, welfare reform was one of the key features of New York City’s 1990s turnaround. In March 1995, 1.1 million New Yorkers received cash assistance, a historic peak. In March 2020, the rolls hit a 60-year low, at 325,016 recipients, despite Mayor Bill de Blasio’s efforts to make it easier to get on welfare. Three years later, however, the welfare situation in New York resembles the crime situation—trends are headed in the wrong direction as some, if not all, of the Giuliani–Bloomberg era gains have been lost. But unlike crime, rising welfare rolls in New York have attracted little attention from policymakers.
Welfare enrollment in New York City now stands about where it was in the wake of the dot-com/9-11 recession. The current upward trend is perplexing. The local economy is growing (New York has recovered almost all the jobs it lost during Covid), and no specific policy change to expand welfare use has recently been enacted.
Early in his administration, Mayor de Blasio made policy changes to encourage more welfare use. De Blasio believed that mayors Rudy Giuliani and Michael Bloomberg, in their implementation of welfare reform, forced people off public assistance prematurely, and that welfare recipients were taking too many low-paying jobs. De Blasio and his influential social services chief Steven Banks took a more lenient approach to sanctioning welfare clients for failing to fulfill work requirements. In terms of labor-force development, they emphasized education and training over work experience. De Blasio and Banks argued that, in the long run, these policies would lead to less dependency, as welfare clients could take more time in preparing themselves for well-paying jobs that offered more sustainable paths to upward mobility.
The New York City Independent Budget Office carefully monitored de Blasio’s welfare policy changes. It found that fewer cash assistance recipients were being placed in jobs. The rolls did not grow unsustainably under de Blasio—thanks, no doubt, to a healthy local economy in the 2010s—but nor was the de Blasio record particularly impressive in reducing dependency. Between his first month in office and March 2020, enrollment fell by only 15,000, or 4 percent.
Then the rolls started rising again. New York is still living under the Banks–de Blasio order insofar as Mayor Eric Adams’s Human Resources Administration, which operates cash assistance programs, has announced no major departures from the policies it inherited. The time may now have come to revisit de Blasio’s more accommodating approach to cash welfare.
The moment is opportune for at least three reasons. First, as governor, Andrew Cuomo pushed more cash assistance costs down to the local level. Rising welfare rolls thus pose a greater threat to the city budget than they did in the 1990s. City spending on cash aid exceeds $800 million this fiscal year.
Second, New Yorkers have access to other safety-net programs that will not be threatened by tightening work requirements for cash assistance. The magnitude of the decline in cash assistance recipients—a more than 70 percent reduction between the mid-1990s and early 2020—would have struck even many Giuliani-era proponents of welfare reform as unduly harsh. But widespread deprivation has not resulted, because use of other programs, such as food stamps and Medicaid, increased as welfare usage went down. Welfare reformers made an implicit bargain that, so long as everyone remained committed to promoting work, they’d accept, and even affirm, rising usage of non-cash benefit programs as “work supports” particularly needful in a high-cost community like New York. One of seven New Yorkers were on cash welfare at the 1990s era peak; now, one out of two are on Medicaid, and one out of five are on food stamps.
Third, the pandemic is over and the economy is back. Between the pandemic’s onset and now, jobs in New York are down by just 1 percent, but cash-welfare enrollment is up by about 40 percent. City government, with Albany’s permission, suspended welfare work requirements during Covid. Consequently, job placements for welfare recipients, already running lower thanks to the de Blasio policies, fell off a cliff. The Human Resources Administration is now in the process of phasing back work requirements. That will restore the policy status quo ante Covid, but not the policy status quo ante de Blasio.
New York has not been able to get crime back down to 2010s levels in part because of disagreement over how serious the problem is. Increasingly, progressives seem to expect that well-adjusted urbanists will take in stride a certain amount of public disorder and even violence. Likewise, rising dependency was once assumed to be a problem in mainstream Democratic circles. The dignity of work—even low-paying work—was an idea once widely supported. That consensus, in the past, helped stabilize both the city budget and social order. It remains vital to the city’s future.
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