Welfare Reform Essay, Research Paper

Econ 251

Welfare Reform will hit economy hard

A new law is going to be implemented in the near future, which requires welfare recipients to work increasing amount of time for their benefits, and places a five year limit on aid! This new policy is thought to make some people and some of their problems go away…but people don s just go away.

Some percentage of the recipients are immigrants and refugees. Provision in the law dealing with them will take effect on this new year s day. They alone will mean a loss of $6.23 million in revenue to the region in the first six months.

Changes affecting other aid recipients, such as those on aid to families with dependent children, will take effect on July 1st next year.

The loss of federal and state money to some places by the time the full impact of the changes are felt in 2001 will be at least $175 million.

This is thought to help people to pay their rent and buying groceries in local business.

National study by a nonprofit institute concluded that as many as three out of every 10 welfare recipients have a disability, or have a child with a disability, that may limit a parent s ability to work at all.

The changes are likely to increase homeless and crime, in turn, will have impact on local business, law enforcement, public health and mental health programs provided by the government , private organizations and charities.

As right now, some of the local government doesn t know anything at this point regarding the opinion from the state. Because most of the welfare involves state opinions, and some places haven t gotten anything from states as far as guidance and time lines other than the notice to do this about food stamps. One of the reasons that some locals are edgy about action is that when the workfare program dubbed Greater Avenues Toward Independence(GAIN) was implemented couple years back some areas were quick on the update got more money that others.

There is an other incentive, the new federal law imposes penalties on those(local government) don t move recipients into work fast enough to meet the new guidelines. During the first year of the program, recipients are expected to work at least 10 hours a week, but whether the jobs will be there or not is another question.

Low-wage businesses might be affected by the reforms because some employees, especially those with large families, may not be able to make it on minimum wage without support such as food stamps, and may have to drop out of t he work force altogether. At the same time there will be more people entering the low-skill job market, providing a larger pool of cheap labor to certain business sectors. And also a larger labor pool intends to pull down the pressure on the wages. ( in addition the fed s min wage bill took effect Oct 1st, reinstates a 35 percent tax credit to employers who hire welfare recipients.)