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Wisconsin, Setting The Standard For Welfare Reform

“Newman Online”
Weekly commentary by Dr Muriel Newman MP

Wisconsin – Setting The Standard For Welfare Reform

This week, Newman On-Line looks at the welfare reform model that is the US state of Wisconsin, and invites readers to attend Dr Muriel Newman’s welfare reform symposium to hear the story first-hand from US Secretary Tommy Thompson.

Last Saturday, I had a date with the White House. Linked to the US by live digital video, I had the privilege of interviewing US Secretary of Health & Human Services Tommy Thompson – the Bush administration’s equivalent of our Minister for Social Welfare.

In my mind, Secretary Tommy Thompson – the former Governor of the state of Wisconsin – is the “father” of US welfare reform. As a result of his changes to social welfare, Wisconsin’s benefit caseloads have dropped by a staggering 94 percent. In some counties, he told me, there are now no able-bodied people on welfare at all.

Since entering Parliament in 1996, I have followed the attempts made by countries around the world to improve their welfare systems. Wisconsin’s reforms have always stood out, not only for their remarkable successes but also, because of the similarities between the state and New Zealand. Wisconsin is a dairy state of some four million people. As a result of generous benefit payment, welfare caseloads in the mid-1980s were high and the state was struggling. Many Wisconsin-based businesses, such as Johnson & Johnson, had relocated to more business-friendly states.

In 1986, Tommy Thompson was elected Governor of Wisconsin on the platform of welfare reform. He believed that while Government has a crucial role to play in helping those who cannot provide for themselves, in light of the overwhelming evidence that giving people money without expectations creates a dependency trap, it is important to be smart in how that assistance is provided.

His reform programme focussed on helping people to find jobs by supporting them to overcome the difficulties they faced – whether it was unfamiliarity and fear, or physical problems with such things as transport or child care. Welfare case managers, given the overwhelming financial muddle that many long-term beneficiaries found themselves in, were largely financial planners. They were able to work with their clients and support them to overcome those problems that had become barriers to employment and undermined their optimism for the future. Welfare recipients were helped to understand that they needed to support themselves, and take greater responsibility for their personal lives, through the strong signals sent out by Government: “we believe in you”; “we believe that you share the same values as families that are not dependent on welfare, and that you are able to support yourselves”; “that you can overcome the problems and difficulties you face and succeed with the government there to help you as your partner.”

The problem was that traditional welfare had failed to send an unequivocal message about the centrality of work. In contrast, Wisconsin’s new programme – W2 – was built on the expectation that work and personal responsibility would replace cash. W2 signalled the end of conventional welfare, and the beginning of a system that offered unlimited opportunity for welfare recipients.

Congress finally responded to the lead in welfare reform being demonstrated in Wisconsin, with President Clinton signing into law the landmark “Temporary Assistance to Needy Families” programme in 1996. TANF, as it was called, made work and self-sufficiency the central core of all public assistance. To create a sense of urgency, time limits were also introduced. A key element in the new approach to welfare was flexibility – individual states were able to fine-tune programmes and implement what worked for them. Critics said the changes to welfare would be a disaster. Instead, however, welfare caseloads have plummeted throughout the country, poverty has dramatically reduced – especially child poverty – and families are stronger. Tommy Thompson’s welfare reforms have been enormously successful and achieved what so many believed was impossible – millions have found work and left poverty behind. In 1999, I invited Governor Thompson to visit New Zealand to share his story. However, with a general election looming, media interest was lukewarm and the case model of success that is Wisconsin’s welfare reform story has remained largely untold. That’s why I arranged last week’s date with Secretary Thompson. Next Saturday – August 14 – the video recording will be played at the one-day Welfare Reform Symposium I am hosting in Parliament. If you are interested in viewing this interview and hearing this outstanding success story for yourself, I urge you to come along.

Information about the Symposium, including registration details, can be found by clicking here - Welfare Reform Symposium

I asked Secretary Thompson what the major hurdle to reform had been. His immediate reply was the doomsayers who predicted that welfare reform would cause wholesale destruction and chaos. They were wrong. The programme has been tremendously successful, with children being the biggest beneficiaries. Nobody in congress, or at State level, has ever said “let’s go back to the old dependency system”.

Surely it’s time that New Zealand followed Wisconsin’s lead and emerged into the enlightened modern world with a plan for welfare reform that would liberate and empower those caught up in our welfare trap who are capable of becoming self-sufficient.

Register for the Symposium at - Welfare Reform Symposium


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