The Uncertain Hour

25 years after welfare reform, let’s revisit “the magic bureaucrat”

41 min
Aug 20, 2021over 4 years ago
Listen to Episode
Summary

This episode examines the 1996 welfare reform movement through the lens of Lawrence Townsend, a Riverside County welfare director whose "jobs first" program became known as the "Riverside Miracle." The episode reveals how Townsend's approach—emphasizing immediate employment over education and using motivational campaigns including a work-ethic music CD—influenced federal welfare policy, but later research showed the initial success was largely due to favorable labor market conditions rather than the program's effectiveness.

Insights
  • The 'Riverside Miracle' success was largely attributable to temporary favorable labor market conditions for low-skilled workers, not the motivational tactics or jobs-first approach itself
  • Long-term outcomes (7-9 years) favored education and skills training over immediate job placement, contradicting the welfare reform narrative that dominated policy
  • Compelling anecdotes and charismatic leadership can drive major policy changes even when underlying evidence is limited or later disproven
  • The gap between short-term welfare program metrics and long-term poverty outcomes reveals fundamental limitations in quick-fix approaches to systemic poverty
  • Once federal policy is enacted based on early findings, political will to revisit or correct course diminishes significantly, even with contradictory evidence
Trends
Policy decisions based on short-term data can have decades-long consequences when scaled nationally without long-term validationEconomic conditions and labor market availability are more determinative of welfare-to-work success than program design or motivational tacticsThe persistence of poverty despite employment suggests that job access alone is insufficient without wage growth and skills developmentNarrative and branding (the 'Riverside Miracle') can overshadow empirical evidence in shaping public policy directionWelfare reform's emphasis on work requirements over education created a structural mismatch when labor markets contracted post-2008Government agencies using multimedia and behavioral messaging to influence welfare recipient behavior predates modern behavioral economics by decadesThe 2008 Great Recession exposed the fragility of welfare-to-work models dependent on consistent low-skilled job availability
Topics
Welfare Reform (1996 Personal Responsibility and Work Opportunity Reconciliation Act)Jobs-First vs. Education-First Welfare ProgramsRiverside County GAIN Program (Greater Avenues for Independence)Long-term Poverty and Deep Poverty ($2/day threshold)Welfare-to-Work Program Effectiveness and MeasurementLabor Market Conditions and Low-Wage Worker EmploymentGovernment Motivational Campaigns and Behavioral MessagingCash Assistance for Poor FamiliesSingle Mother Employment and Welfare DependencyPolicy Evidence and Long-Term Outcome TrackingEconomic Recession Impact on Welfare ProgramsSkills Training vs. Immediate Job PlacementWelfare Stigma and Cultural NarrativesFederal vs. State Welfare Program DesignPoverty Measurement and Self-Sufficiency Definitions
Companies
Riverside County Department of Public Social Services
County welfare agency that implemented the jobs-first GAIN program under Lawrence Townsend's direction
Harvard Kennedy School
Awarded Riverside Department of Social Services an Innovation in Government award that elevated the program's profile
People
Lawrence E. Townsend
Director of Riverside County Department of Public Social Services; architect of jobs-first welfare program known as '...
James Ricchio
Sociologist hired by government to study Riverside's jobs-first program; later confirmed long-term results contradict...
Joe Hutz
Labor economist at Duke University who studied Riverside program and discovered the 'miracle' effects reversed after ...
Sophia Ellsman
Welfare recipient who went through Riverside GAIN program; featured as success story but earned under $15/hour two de...
Keith Rogers
Mail room worker at Riverside DPSS who composed and produced songs for the 'Work Makes the Difference' CD
President Bill Clinton
Signed the 1996 welfare reform bill (Personal Responsibility and Work Opportunity Reconciliation Act) in Rose Garden ...
Senator Bob Packwood
Republican senator from Oregon who cited Riverside Miracle and Lawrence Townsend in 1995 congressional welfare reform...
Senator Daniel Patrick Moynihan
Democrat from New York who questioned Townsend's tactics during Senate hearings, calling him 'a puritan'
President George H.W. Bush
Visited Riverside's welfare-to-work program, lending political credibility to the jobs-first approach
Laura Grannon
Poor mother living in deep poverty ($2/day) who must choose between basic necessities like cough syrup and toilet paper
Quotes
"Today we are ending welfare as we know it."
President Bill ClintonAugust 22, 1996 Rose Garden ceremony
"I felt like it was more a hindrance to me. Like, Gain was a hindrance? Yes, because I had to go there."
Sophia EllsmanEnd of episode
"The Riverside Department Social Services received an award from the Harvard Kennedy School for Innovation in Government."
Joe HutzMid-episode
"By years seven and eight and nine? Actually the effect reversed. Meaning the people who'd gotten more education, more skills training...they were doing better."
Joe HutzLate episode
"If it were that simple, we would have solved it much earlier. Unfortunately, it wasn't that simple."
Joe HutzConclusion
Full Transcript
I'm holding in my hand a CD produced in the early 1990s. It's called Work Makes the Difference. The cover of the CD is Hot Pink and Purple, very 90s geometric patterns on it, and the people behind it, the producers, the songwriters and the performers. Well, let me just read a couple of the credits for you. First off, there is Lawrence E. Townsend, director of the Riverside County Department of Public Social Services, and below that, there's just a credit line for the Income Maintenance Division staff. Now, if you're unfamiliar with the jargon of government safety net agencies, basically these people all worked for a county welfare office. They made the CD. Here's just a taste. Well, fair, just a temporary way of a lie. You don't have to stay there for the rest of your time. I'm going to tell you the strange story of why this CD got made, who made it, who its intended audience was, because it says so much about the mindset at a moment in our history that we're still grappling with as a country. The moment when we as a nation scrapped the system we'd been relying on for 60 years to help families in poverty, the welfare system, and entirely rewrote the rules about who deserves what kind of help and why. Now, I know when you think about welfare, you probably do not think of 90's synth pop. Usually, welfare is accompanied by a sort of predictable soundtrack of opinionated extremes. Chorises that swing between this. Well, for people that sit on their butt all day and don't do anything, and then say, feed me, close me, give me your money. And this. That helps people that's having a hard time finding jobs, and they need a little help to get on their feet so they can pay their bills and make sure that their families safe and secure. But the thing is, if you drill down and ask people, okay, but what exactly is welfare these days? How does it work? Who does it help? They're not so sure. Well, fair. Um... Well, fair. Um... Well, fair? I would say maybe... I don't know. I'm sorry. Welcome to the uncertain hour, where the things we fight the most about can be the things we know the least about. I'm Chrissy Clark, Senior Correspondent with Marketplace's Wealth and Poverty team, and this is our new podcast where we will dig deep into the uncertainties of our economy today to try to make some sense of making it in America. Questions like, who deserves what and why, who needs help and why, how you get ahead, how you fall behind, all these things that we used to take for granted in our economy, that aren't so certain anymore. This season, a subject that hits all those big questions, welfare. And more specifically, what the hell is welfare anymore? Because to understand our economy today, you need to understand what we do for and about those with the least in it. And I'm going to guess it's not what you think. So here's one astonishing fact I can tell you. Over the last 20 years, the number of families living in deep poverty, unless the two dollars a day is rising. And most of them don't receive welfare, meaning that for moms like Laura Grannon, even a 14 basic necessities, involves major trade-offs. Like coughs are a cough medicine is very expensive even for children. So I try to put a little squirrel a little bit away for a rainy day, but it does get hard when you're down to your last dollar and it's, we'll do it go buy a four pack of toilet paper, or do I get cough syrup for my kids. So how did we get to this place? Where some of the poorest families in America are living with almost no safety net. Over the next several episodes, we're going to try to answer that question by looking at welfare from lots of different angles, who is and isn't on welfare today, how most welfare dollars actually get spent, why welfare was invented in the first place and how it's changed. Today, we start with the folks who started to transform our safety net 20 years ago, the welfare reformers. Some you may have heard of, some have become footnotes of history, but we're going to spend some time in their world and their heads. Okay, so even if you don't know much at all about welfare, and I should say, I'm talking here about cash welfare, the kind that comes in the form of a welfare check. Food stamps, Medicaid, they have their own histories, but here we're going to focus on the kind of welfare that sparked the most debate and the most stigma over the years. Cash assistance for poor families. And even if you don't know much about how that system works, there's this moment 20 years ago that you might remember or have heard about vaguely. Thank you, Mr. Vice President. On August 22nd, 1996, in the White House Rose Garden, President Clinton signed a bill pushed through by a Republican Congress that drastically remade welfare, this $16 some billion program. Today we are ending welfare as we know it. And a big part of what that meant, at least what was all over the news at the time, was this one idea, welfare to work. I made my principles for welfare reform very clear from the beginning. First and foremost, it should be about moving people from welfare to work. Then he continued to transform a broken system that traps too many people in a cycle of dependence to one that emphasizes work and independence. To give people on welfare a chance to draw a paycheck, not a welfare check. And this idea of a paycheck, not a welfare check, work, not welfare, there's a pretty amazing backstory to how it got so much momentum in the welfare reform movement. And part of it has to do with that CD you heard at the top of the show. And this one man who'd come to be known as the Magic Bureaucrat. My name is Lawrence Townsend. Larry, for short, Larry is 79 retired. He's got close-cropped white hair, broad shoulders, and a serious face with one of those army general smiles that never quite turns up at the edges. Larry did in fact spend a few years in the military, and they seem to have left more of an impression on his personal style than his decades in county government. Today, Larry lives in a beach town in California where he drives around in a green Cadillac Seville that has a brass frame around the license plate. And etched into the brass, it says, Life works if you work. Larry loves work, just the idea of it. It's one of the two main concepts that define his worldview. He has a binder full of work ethic slogans that he's collected over the years. These are from famous quotes from all over the world. Alphabetically. Yeah, by the fact there are some that I want to just show you. He starts with A. Aristotle suggested that happiness results from meaningful activity. Who goes all the way down to T. Tolstoy declared it's a duty of each man to earn his living by the sweat of his brown, cow's hands makes independent and virtuous men. Now that was a little sexist, but the point is very valid. The second thing that defines Larry, as much as he loves work, he hates welfare. It is his other obsession. I've seen so much of damage to people that are on welfare. They have no hope for a better future. They aren't setting a good example for their children. And he's got a collection devoted to this belief, too. Stories that date back decades to his early career in county government. This one causes tears still. There's the story of his visit to a welfare office when he noticed two children in the waiting room. Their mother was in back talking to a case worker about applying for assistance. He says he watched the two kids while they waited for their mom. One of the children was playing the welfare recipient. The other one was the playing the eligibility worker. Now you tell me they aren't learning how to get on welfare. Like kids would play house. Playing house in the waiting room while their mother was in the office with the eligibility worker. Now they're catching on about the concept of getting on welfare. Now that one hurt me. And then there's the story about the two women he says he overheard in an elevator once. And this one said to the other one, my horse child is going to become 18. And I won't get welfare benefits. I need to get pregnant. These are the kinds of anecdotes that get told and retold among critics of welfare. Individual moments that may not be typical of welfare recipients in general. But for critics, these stories represent all the failings of the system. But what made Larry's anecdotes unique? He was in a position to do something about them. Because he became the head of a welfare department in a Big Suburban county, east of LA called Riverside. The way he saw it, his role in this welfare office. To invade and conquer. That was my attitude. And in the late 80s, he got the perfect chance to wage his war. That's because right at the time Larry was running the Riverside Welfare office, the federal government was reconsidering its approach to cash welfare for poor families. Quick history lesson here. Since the Great Depression, when the program was first signed into law, welfare had worked pretty simply, at least in theory. If you were a single parent, if your family was poor enough, and if you met a few other technical requirements, you qualified for a welfare check. End of story. There was little expectation that mothers would work. This is James Ricchio, a sociologist who's been studying welfare programs for most of his career. And he's talking about this crazy flip flop that happened over the years, around who we thought deserved welfare. When the program began, the whole point was to help single mothers, mostly widows at the time, make ends meet so they could stay out of the workforce, focus on raising their kids into productive citizens. But attitudes began to change, particularly in the 1970s and early 80s. Part of it had to do with the fact that more middle-class mothers were entering the workforce. So some were asking the question, what about mothers on welfare? Shouldn't they have jobs too? Joe Hutz is a labor economist at Duke. And he says, well, most welfare moms did have jobs, at least on and off. There was this persistent group of largely single mothers, who stayed on welfare for long periods of time. They didn't work. And arguably had a life of dependence on welfare. And that small but persistent group started to get all this focus. There's a lot of academic attention to this, certainly a lot of attention in policy circles to this, quote, problem of welfare dependence. And the view was that, you know, what's key to changing this was to make changes in the welfare system, which encouraged people to work. But then the question was, how, out in suburban Riverside, California, Larry Townsend, that guy who loves work and hates welfare had some ideas. And as county got a special waiver from the government to try some of those ideas out. I was absolutely stunned that I was a given freedom to design a program, to implement a program to hire the staff that are needed. I felt like it was an honor. It was an opportunity and a chance to change the concept of welfare. Larry's changes happened under a California pilot program called Gain. Short for greater avenues for independence. And it really became that when it was run properly. You have a twinkle in your eyes, you say that? Yes. There were two basic avenues counties could take to get more of their welfare families closer to independence. Some counties went the education and training route. The idea here was to help poor single moms who'd often dropped out of school, get more skills, maybe a GED, to fare better on the job market. But down in Riverside, Larry did not have much patience for that approach. His approach much simpler. Get people into a job immediately. Don't worry about, are you trained enough or do you have enough education? Just get that job. We're not going to train you for years. We're not going to send you to school for years. We're going to show you how to find a job. You can still hear the conviction in Larry's voice talking about this program almost 30 years later. Listen to it. How to find a job. And the point wasn't to find a perfect job or even a well-paying job. But at least your foot is in the door and how well you succeed from there is up to you. With an important catch. If you do not cooperate with us, we will take you off of welfare. Your children will still get money from us, but you won't. To carry out his jobs first plan, Larry restructured his welfare office to run job search classes and job clubs for welfare recipients. I remember being at the gain office and they said that they were going to we were going to be practicing interviews. Sophia Ellsman had just signed up for welfare in Riverside at the time. She and her husband had just split up and she needed some help supporting her kids while she put her life back together. They said, well, now you have to sign up for the game program and it's to get you out there in the workplace. It was fine with me because that's what I wanted to do anyways. James Ricchio and Joe Hutz, the sociologist and the economist we heard from a minute ago, both sat in on some of Riverside's job clubs and they left an impression. Imagine people sitting in a circle, chairs in a circle. There'd be a job club leader who would talk about what it means to work, how to find a job. How do you approach potential employers? How do you address? Dealing with testy supervisors. Eventually, the people on welfare would be handed a list of job leads and a telephone and told to start calling around and asking for jobs. Here's Joe Hutz again. And there's a whiteboard, right? So somebody would get us, you know, an interview and it would go up on the board and everybody would pause at various points in cheer, right? This is like going to these Weight Watcher meetings where I lost 15 pounds, right? I got a job offer and that sense of this is exciting. We're doing something that's really important and novel. You could see, had an impact on the recipients who were involved in these job clubs. But those job clubs, the chairs and the whiteboards and the Weight Watchers vibe, they were just the beginning of Larry's plans for the welfare recipients of Riverside. Larry says his vision was much bigger. In fact, well, for recipients with a positive attitude, with the beauty and glory of work. And so I became sort of like a preacher for work. And a preacher needs tools to evangelize. I have a few materials that I could show you. Almost 30 years later, Larry still has his files documenting the multi-pronged, multimedia campaign he crafted before multimedia was even really a thing, selling the beauty and glory of work. He shows me piles of marketing ephemera. Booklets, posters, billboards, full of welfare to work slogans. Success stands on your backbone, not your wishbone action, term streams into realities. Get into gear, start a career. I have a different self-sufficiency as a part of the museum. He's proud of honest weight for your ship to come in, swim out to it. If you think you can get a job, you will. If you think you can't, you won't. Going through Larry's archives is like walking through a gift shop at a national landmark commemorating work. There are souvenirs in every possible variety, designed to appeal to as many of a welfare recipient senses as possible. We didn't let him get away by not seeing our message. The messages were printed on bumper stickers to catch the eye of a welfare recipient walking through the welfare office parking lot on buttons that the welfare intake workers would pin to their lapels. End loops that the welfare benefits went out at that time, right on the outside of the envelope. Messages you could see, touch, feel, and for the ears? Well, there was this. I thought music is a very inspirational form of communication. And so Larry made this CD, that one that we heard at the beginning of the show, called work makes the difference. He used $2,000 of taxpayer money, no authorization, to record it. And I figured I might get fired over it. But he didn't. This is the first track, the title track. And the next generation. Or will you be the last? Well, first temporary. Not a way of life. Be proud of all this flavor. The music was made to be played in welfare waiting rooms over the PA system, to be the whole music when people called up the welfare offices. It would play during voicemail greetings. I have to say, since I first heard these songs, I cannot get them out of my head. There are 10 songs in all, different genres, to appeal to different demographics, Larry says. There's a song that features a whole rap section. Supporting yourself is helping yourself. You've got to have something to do and ride. And then there's a song with a kind of slow reggae jam. And then there's a jazzy Andrew's sister's 40 style thing that's very hard not to snap your fingers to. But we're not done yet. There are also three different versions of a song called Feels so good to have a job. Country. Urban contemporary. And for the Spanish speaking audience. Part of what's so striking about these songs is their specificity. They were not afraid to embrace the acronyms of bureaucracy. Like this one line. DPSS stands for the Department of Public Social Services, the Welfare Department that Larry Townsend ran. And of course, the lyrics could be that specific because it was the DPSS staff who composed, produced, and recorded most of these songs. What happened was he sent out a memo. A paper memo. Yeah, paper memo. It was a all-staff memo. Keith Rogers was working in the mail room of DPSS back then. His job was to send out the welfare checks that, according to one of the songs he would later write, welfare recipients should be envisioning in their past. The memo from Larry said he was looking for volunteers to take some of the work ethics slogans he'd collected and put them to music, turn them into songs. Keith was a musician. The mail room thing was just his day job. And so you read this. What goes through your mind immediately? Oh, I got a chance to do my thing. Let me just go up and whip something up and then submit it to Larry Townsend. So after work, Keith sketched out a melody. He still remembers it. Well, first temporary and not a way of life. And he sent a demo over to Larry. He loved it. Next day I know I'm up in his office. This is like your boss's boss's boss. Oh, look, it's like the president. And he gave me, he says, now you're not doing mail right now. You're going to be a producer. You're going to produce my CD. And I'm like, wow. Six months in the studio later, with $2,000 of taxpayer money and musical contributions from the mail room on up through county social workers. And they had their CD. It's worth pointing out that before he'd worked in the mail room, Keith had actually been on government assistance himself back when he was struggling to make it as a musician and in between gigs. Yeah, I mean, I received full stamps, you know, but that was just something that I needed until I became gainfully employed. That was not anything that I wanted to depend upon. It was temporary not a way of life. Oh, I knew it wasn't a way of life. Try to live off full stamps. And that was something I heard from a few of the people who worked under Larry making the CD. The message of the music that welfare should just be temporary, not a way of life, that getting a job was important, was kind of stating the obvious to them. But Keith says the songs were fun to write. And he hoped they'd be fun for welfare recipients to listen to in the waiting room. You know, you're hearing that, you're hearing it being pumped all over in the system here. And then you might call at some of the welfare offices and, you know, they put you on a whole year. Well, welfare is a temporary way of life. And I'm thinking, you know, you play certain things over and over again. It does have a subliminal effect. It's, hey, guess what? I want to find his job. And whether it was the songs themselves or the buttons, the billboards, the bumper stickers, the job clubs, or the jobs first strategy altogether, somehow Larry's plan in Riverside seemed to work. The results in Riverside were the most impressive we had ever seen in a welfare to work program up to that time. This is sociologist James Ricchio again. He was actually hired by the government to study Riverside's jobs first program. His team followed the families who participated, tracked what happened to them for five years, and compared that to what happened to families who stayed on the plain old welfare program, where they just got checks, no job clubs or job pep talks. Turns out the ones who participated in the jobs first program, five years later, they were doing way better. On average, had earnings that were 42% higher than those who were assigned to the control group. They were making 42% more money than the families who hadn't gotten any of the jobs first stuff. James also compared the people who went through the jobs first program in Riverside to people who lived in other parts of the state that emphasized education first. And the Riverside jobs first group came out on top in that comparison too. Five years later, they were employed more and had higher wages than the education first group. And because of all of this, Larry Townsend, the director, became a kind of star in this narrow world of welfare reform. But this narrow world of welfare reform was about to widen, and play a very big role on the national stage. And Larry's get a job, any job approach for welfare recipients became known as Riverside Miracle. The Riverside Miracle. Here's economist Joe Hutz again. He also studied Larry's program. The Riverside Department Social Services received an award from the Harvard Kennedy School for Innovation in Government. It got a lot of attention on the national news. And I'll just read a few quotes here. From the New York Times, no program has done as much to raise the earnings of people on welfare as one here in Riverside County. And from the LA Times, Riverside is pursuing a notion so obvious as to be stupifying. If you want to get people off welfare, stay on their backs until they get a job. They call me the magic bureaucrat or something. It was an editorial, a whole page. But I pick it up because believe it was the lower the top. Larry has a framed copy of the editorial hanging in his house. How many articles have been written over the years? 800. Some of the last count that I'd had. But in all the news coverage, Larry's thoughts about the welfare system sometimes revealed a more aggressive tone than the one you hear in those songs. In one article from 1993, he says that every time he sees a bag lady on the street, he wonders if it's a mother on welfare who quote, hit the menopause wall, who can no longer reproduce and get money to support herself. I asked him about this quote. Please don't go there. Well, it is out in the public record. I just wanted to give you an opportunity to. And then out in the record, Eons ago, now I don't know about the need to clarify it further. Well, since we're going into history, you know, we, the part, this whole story is about the history of the... You've done your job in that regard. So Larry clearly did not want to talk about this. But I still wanted to know whether he ever worried some of his welfare to work rhetoric might be hurtful to people. There is this tricky territory. It seems like in discussions around this where there can be stereotypes that come up or feelings of judgment. The example that that talks about. I was a concept where I was concerned about ladies getting into an unfortunate situation and nobody ever helped them to discover how good they are. And that's all he wanted to say. Regardless of what you think about Larry's opinions of work and work ethics and how that applies to who's on welfare and why, the fact is these opinions were widely embraced 20 years ago. Eventually, Larry's story, his Riverside miracle, started getting noticed in political arenas. Joe Hutz, the economist, says the results in Riverside influenced thinking among Republicans and Democrats. President Bush Sr. visited Larry's welfare to work program. And... It certainly was a key driver in the early part of the Clinton administration in terms of a backdrop for how to structure welfare reform. And then he will come to order. And in the years leading up to welfare reform, Larry flew to Washington DC five different times to testify before Congress as they debated how to restructure this $16 million dollar program. This is one of a continuing series of hearings on the subject of welfare. Here's Republican Senator Bob Packwood from Oregon in 1995. Just a year before the welfare reform legislation would be signed into law. A key part of the solution to that failure in Packwood's eyes was the Riverside miracle and the Magic bureaucrat behind it. Mr. Lawrence Townsend, who's the director of the Department of Public Social Services in Riverside, one of the outstanding success examples in the country. Mr. Townsend. And there Larry was. Thank you, honorable Chairman Packwood. In a dark suit with a big blue button pinned to his lapel that read, Self-Sufficiency is supporting yourself. I have concentrated, oh, well since 1987 on one thing, I want FDC B. Cepiancy Employee. A FDC remember was the name of welfare at the time. Larry told the senators all about his welfare to work program in Riverside. All the ways he had enlisted his staff to promote it. If you call Riverside County and nobody answers to the phone, they'll get a work ethic message. We have posters in the waiting room. We have produced a compact disc with work ethic music. Identify very much work ethic music. Yes, now what we've gone commercial and we've produced a compact disc and we started a new singing group called the ethics. I have listened to that moment over and over again and I think that it might be one of the most surreal moments in the history of Senate hearings. Larry's foray into the music industry becomes a chance for senators to make a string of bad jokes and emit rounds of senatorial chuckles. You sing high-hole, high-hole, it's off to work, we go, we go. One senator asks if the songs were produced by the 80s band Men at Work. Some senators were unsettled by Larry's tactics. At one point Daniel Patrick Moynihan, the Democrat from New York, points at Larry and says, You, sir, are a puritan. Terrifying. But even Moynihan couldn't help but ask Larry if he could get a few copies of the CD. Hope we're not violating any rules, but could you send us some? But eventually all this laughter would die down and the senators would take Larry's work just as seriously as he did. Larry's dismissal of educating welfare recipients as a waste of money and time, his emphasis on getting a job, any job, or else. Both of those ideas show up in various ways in the welfare reform bill that Congress passed and President Clinton signed in 1996. It had a name that Larry would approve of, the personal responsibility and work opportunity reconciliation act. But here is where the story takes its final twist. That thing that served basically as the proof that welfare reform and welfare to work would work, the Riverside miracle that underlay all of this? Well, there's no miracle. There was no miracle. Unfortunately, it wasn't that simple. In the early 2000s Joe Hutz, the Duke economist, he and two other researchers checked back in on what had happened to the welfare recipients who'd gone through the Riverside job first program. And they compared their circumstances to folks who'd gone through other programs in counties like LA and Alameda that had focused on education and training. And what we found was that yes indeed, work first worked better in the first few years out of the treatment. But by years seven and eight and nine? Actually the effect reversed. Meaning the people who'd gotten more education, more skills training, rather than being told with buttons and songs and slogans to just get a job, any job, they were doing better. They were more likely to be still at work. They were making slightly more money. And less likely to return to welfare. The results were so shocking to Joe and his colleagues. Our first reaction is there's got to be a mistake here, right? These can't be real results. So they re-crunched the numbers, but the results kept coming back the same way. The effects of the Riverside miracle had all that disappeared. What's more Joe says, the job growth and higher earnings from the first few years, probably had less to do with the work first tactics of the Riverside program. And more to do with the fact that the job market for low skilled workers in Riverside back then was pretty strong. Part of the miracle was the fact that for a period of time people when they went out and made these phone calls and made the sort of went for the interviews. There actually jobs available. Meanwhile, Joe found that the local economy in other areas where education was being emphasized just happened to be different. The same kind of low skilled jobs were not as available there. But by the late 90s, the low skilled job market died down in Riverside too. And when the jobs turned down, right, and demands for low skilled workers declined in places like Riverside, the ability to place people in those initial jobs to have the work for a strategy work, if you will, diminished greatly. Joe says as exciting as the Riverside miracle and the motivational work ethic songs sounded. When there aren't jobs out there, you can have all the job clubs you want, right? You can have them calling as many employers as you want. It's not going to change the fact that there are no jobs. Turns out a better name for the Riverside miracle might have been not as catchy, but maybe it's something like the Riverside short-term spike in the labor market that was a fluke and allowed more jobs for a while. Something like that. Yeah, that's probably not going to get a sound bite. When Joe came out with this reanalysis of the Riverside miracle, he called the original researchers that had found such good early results in Riverside. They got on a four-hour conference call. James Ricchio, the sociologist we heard from before, was one of those original researchers. Were you on that conference call? Do you remember that? Yes. And it's the stuff that statisticians love to argue about. So you can imagine a long telephone call. Did you control for this or that or what's the statistical model you're using? After quibbling about some of the details, James and his team more or less said, yeah, you're right. Does the Riverside miracle still look like a miracle nine years later? What's fair to say, probably not a miracle in the sense that it didn't put people on a trajectory that was going to last a lifetime. But this discovery that maybe climbing out of poverty in an unpredictable economy takes more than job clubs and songs, that did not get the same kind of media play as the Riverside miracle had gotten. There were not 800 articles about it. The news just stalled in that four-hour conference call. Because in the meantime, the ship had already left the dock. The Riverside miracle had inspired a whole raft of federal welfare reform legislation based on the get a job, any job, work first mantra, and collectively changed how we think about welfare. The day we are ending welfare as we know it. And by that point, retooling welfare again. It just wasn't something the federal government or states that ran welfare to work programs had the political will to deal with anymore. Their view was, oh, we took care of this back in 1994-95 and we don't need to revisit it. It wouldn't be till later that the weaknesses of the get a job, any job welfare to work approach revealed themselves on a big, painful scale. In the Great Recession that started in 2008, when job markets crashed all over the country, especially for low-wage workers. Joe says the Riverside miracle had been such a tantalizing low-cost, quick fix to poverty. Get people off welfare and into self-sufficiency, just inspire them. Tell them to get jobs. It was a hard approach to let go of. Unfortunately, after a while we realized these problems are age-old. It's, um, if it were that simple, we would have solved it much earlier. Unfortunately, it wasn't that simple. And that's where our story ends for now, except for the people who are living it. Okay, so we have to... ...be a carl. After going through the Riverside Jobs program more than 20 years ago, Sophia Ellsman has been off welfare ever since. For the last decade, she's worked in this plus-sized dress shop. She's the store manager in charge of a small staff and figuring out where to put the pink sweaters so they don't clash with the coral ones. But this coral here with this set looks good. The fact that Sophia has a job is evidence that the Riverside Jobs First program did have its successes. In fact, she was featured in a newspaper article in the early 90s as an example of the Riverside miracle. But she says her life... For a woman in her 50s, she has a physically taxing job. She's on her feet all day, dragging racks of clothes from here to there. My hands are screwed up now. My big crown. And for all this, she makes less than $15 an hour. Sophia lived up to the Riverside program's name. Gain. She found greater evidence for independence. But I asked her, do you consider yourself a gain success story? She thought for a long time. Yes, and no, she said. And then she corrected herself. You know what? To tell you the truth, you know, I've been working for like since I was 14 years old. The work requirements, the job clubs, they were actually a bit of a distraction, she says. She'd already had low-wage jobs and she knew how to get them. I felt like it was more a hindrance to me. Like, Gain was a hindrance? Yes, because I had to go there. But I did what I had to do because they said I had to do it, so I did it. Sophia has moved out of poverty and off of government assistance. But she says she would have done that anyway. Wellfare was just a temporary bit of help she needed when she and her husband split up. But two decades later, she hasn't moved that far out of poverty. Things are still tight. And rather than getting pep talks to find a job, any job, she wishes she'd had encouragement to get the training to do what she really wanted. I want to be a nurse. Probably if I got offered, the opportunity to go back to school right now, I could be in a hospital being a bar in. And making a lot more money than $15 an hour. That's it for today. Next time on the uncertain hour, what happened to poor mothers who could not find jobs? Once welfare reform kicked in. What jobs have you applied for? I've applied for a family dollar. I've applied for goodwill. Just did the goodwill. I have a list of places. I haven't actually been able to get around because I don't have transportation. So I'm on the bus. And then it's hard getting bus money. So... Thanks for listening to the uncertain hour from Marketplace's Wealth and Poverty Desk. I'm Chrissy Clark. The uncertain hour happens because of producer Caitlin Esch, associate producer Gina Delvack, senior editor Nancy Fargali, engineer Ben Toliday. Mark Miller is the managing editor and Deborah Clark is the executive producer and vice president of Marketplace. Special thanks this week to Rose Dixon Flowers, Nancy Humphries, Luke Schaeffer, Kathy Eden, Ron Haskins, David L. Wood, Peter Edelman, Larry Katz, Linda Gordon, and Mojave Audio. Marketplace's Wealth and Poverty Coverage is supported by the Ford Foundation. There will be more of the uncertain hour in two weeks. And if you like what you heard, please review our podcast on iTunes. It'll really help us continue the work we're doing and we'd love to know what you think. This is APM. We're going to be part of the future. Be part of the adventure.