Report shows value of work requirements

THE Trump administration has said work requirements should be required as part of eligibility for many able-bodied adults to receive welfare benefits, and Oklahoma is among the states pursuing such reforms in its Medicaid program.

Critics contend that for able-bodied adults, welfare benefits can be an obstacle to self-sufficiency in the long run. A new report from the Council of Economic Advisors gives credence to this argument.

The report notes that non-disabled working-age adults (between ages 18 and 64) have accounted for 61 percent of adult recipients on Medicaid, 67 percent of those on the Supplemental Nutrition Assistance Program (aka food stamps), and 59 percent of those receiving housing.

The report states “the majority of these adult recipients worked few if any hours each week while receiving benefits.”

Historically, welfare rolls increase during recessions and decline during expansions. Yet during the Obama administration there was little decline in welfare rolls even after the Great Recession had long ended.

In 1979, the report notes, 9.5 percent of non-disabled working-age adults received assistance from one of the federal government’s four major welfare programs. By 2016, that share had more than doubled, reaching 19.4 percent. Yet the economic situation in 2016 is considered far better than conditions in the late ’70s. So why do so many people today appear unable to become self-dependent?

The perverse incentives of the Medicaid program may be partly to blame. With Medicaid there is no sliding scale in which benefits gradually phase out the more money a recipient earns. People who earn $1 less than the cutoff for eligibility receive full benefits. But if they earn $1 above the threshold, all benefits cease. “This ‘benefit cliff’ creates a strong disincentive to work for households with incomes near the threshold …,” the report notes.

Notably, many able-bodied adults on Medicaid are capable of full-time work but aren’t pursuing fulltime jobs. The report reveals there were 4 million nondisabled adult recipients on Medicaid between the ages of 18 and 49 who have no children, and another 1.8 million non-disabled adult recipients between the ages of 50 and 64 without children. Another 5 million non-disabled adults on Medicaid have children between the ages of 6 and 17, meaning their children are at school during much of the work day through most of the year.

At a gut level, most people understand a system that disincentivizes work is bad for recipients in the long run. Research and experience back up that contention. In 1996, when the food stamp program was reformed to impose work requirements, caseloads fell and employment increased among the target group without affected families facing starvation.

The Council of Economic Advisors notes “a significant body of evidence generally suggests that welfare programs which do not require work reduce employment among adults,” while “welfare programs that link benefits to work significantly improve child outcomes.”

Any form of charity that leaves a recipient unable to improve his economic situation is cruel and counterproductive. The Trump administration and Oklahoma officials are right to explore ways to ensure government assistance is a short-term solution that doesn’t become a perpetual way of life.