Welfare is back

by E.J. McMahon |  | NY Torch

New York City’s welfare caseloads are expanding again—a deliberate and predictable outcome of Mayor Bill de Blasio’s policies, as Manhattan Institute’s Steve Eide points out in his new “Poverty and Progress in New York” report today.

Two key findings:

  • New York City ended 2014 with more people on welfare than it began. Midyear, the Human Resources Administration (HRA) announced major changes to the city’s public assistance program; by the end of 2014, enrollment had grown by about 16,000 since the HRA announcement.
  • This increase has come during a time of relative prosperity for the local economy, which added more than 90,000 jobs in 2014. Significant growth came in low-wage industries likely to hire welfare recipients. Throughout New York City’s history, the general tendency has been for welfare enrollment to decline as job numbers grow.

The trend is the opposite of projections in Governor Cuomo’s state financial plan, as illustrated below. The governor assumes the number of welfare recipients statewide will decline steadily over the next four years.

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To be sure, the state budget numbers are, as usual, slightly inflated: for example, average total welfare recipients through the first nine months of fiscal 2015 were 566,000, about 14,000 less than projected in the budget, according to data from the state Office of Temporary and Disability Assistance.

The city trend, wherever it leads, is likely to dominate the direction of welfare dependent and its impact on the state budget in the future. As noted here last year, a bigger caseload will mean higher expenditures.

After an enormous drop between 1996 and 2012, the number of welfare recipients remains very low by historical standards, Eide said. In addition, the number of city residents receiving federally funded Supplemental Nutritional Assistance (i.e., Food Stamp) benefits has declined in the past year.



- E.J. McMahon is the Research Director at the Empire Center for Public Policy.