MEDIA RELEASE: Impact of Work First Program on Low-Income Families, Local Economies Is Slight

 
 
New Report: Impact of Work First Program on Low-Income Families, Local Economies Is Sight
Number of individuals receiving cash assistance has fallen by 5.7 percent

RALEIGH (June 9, 2009) - North Carolina's Work First program is playing a minor role in alleviating the severe family hardships caused by a recession marked by widespread job loss. Since the recession's onset, the number of persons in families receiving cash assistance has declined by 5.7 percent. Similarly, the cash grants have generated a modest statewide economic impact of $159.4 million.

These findings come from a new BTC Brief authored by John Quinterno, a research associate at the NC Budget & Tax Center. Quinterno used data compiled for the North Carolina Department of Health and Human Services to analyze changes in the Work First cash assistance program caseload between December 2007 and April 2009.

"Work First is a tattered safety net,' says Quinterno. "Designed for a time when jobs were plentiful, the program is proving unable to alleviate the severe family hardships caused by a recession defined by severe job loss."

A federal block grant that replaced the old Aid to Families with Dependent Children program, Work First helps extremely low-income families with children meet their basic needs, gain work experiences and secure jobs. To qualify for cash aid, a family must have a very low income and meet other criteria. Benefits vary with income and family size, and beneficiaries are subject to various work requirements and time limits.

"For the Work First program to function as intended, adequate numbers of jobs must exist, yet the current recession has been marked by a sharp contraction in jobs," explains Quinterno. "While the number of persons struggling economically has risen, the number of persons receiving cash assistance actually has fallen by 5.7 percent."

In April just 48,246 individuals - 0.5 percent of the state's population - were connected to the caseload. Children accounted for 82.5 percent of these persons, and African Americans accounted for 54.6 percent. Mecklenburg County had the greatest number of individuals (7,647), and Macon County had the fewest (6).

"While relatively few individuals receive Work First cash payments, those who do tend to spend the money quickly and locally and in the process generate additional economic activity," adds Quinterno. "Since the recession's start, Work First has generated $159.4 million in statewide economic activity. That spending has helped blunt the recession."

The five counties where Work First has had the greatest economic impact are Mecklenburg ($19.4 million), Guilford ($10.4 million), Cumberland ($8.6 million), Wake ($8.4 million), and Forsyth ($6.5 million). The five counties where the economic impact has been the least are Macon ($26,902), Tyrell ($52,537), Graham ($55,811), Mitchell ($65,573) and Cherokee ($89,437).

"The growing disconnection between economic conditions and Work First caseloads is a serious concern," says Quinterno. "It suggests that program requirements and rules need to be revamped to ensure that Work First meets current realities. This reassessment is especially timely given that the federal program is up for reauthorization in 2010."

The full brief is available on-line at http://www.ncjustice.org/?q=node/314
 
For More Information, Contact: John Quinterno, 919-622-2392 (mobile)

This brief is part of an occasional series documenting the impact of the recession and the American Recovery and Reinvestment Act on North Carolina. A previous analysis of the impact of unemployment insurance payments is available at http://www.ncjustice.org/?q=node/224 while one detailing the impact of food stamp payments is available at  http://www.ncjustice.org/?q=node/267 An analysis of changes in food stamp caseloads is available at http://www.ncjustice.org/?q=node/283

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The NC Budget & Tax Center provides timely, accessible and credible analysis of state and local budget and tax issues with a special focus on the impact on low- and moderate-income North Carolinians.