“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
ENDS