Governments tend to present workfare programs as a success story, primarily because they achieved their immediate goal -- reducing the budget for welfare payments. In the United States, for example, the number of recipients was cut in half within a few years (Besharov and Germanis, 2000).
On the other hand, the ability of workfare programs to put individuals (back) into the labor force is much less impressive: According to estimates by the OECD, only 5-10% of the participants in various welfare programs are employed as a direct result of those programs; the others, it is estimated, would have found jobs even without the programs (OECD, OECD Employment Outlook 2000: 8). In the United States, where the welfare rolls were halved within four years, no one can state definitively how much of this decline was due to workfare programs and how much to the booming economy.
Critics of workfare note that a significant portion of the success of the programs can be attributed to the economic growth in countries where they were implemented. Where growth was low and unemployment high, on the other hand, workfare participants have had a hard time finding stable employment.
But even in countries enjoying significant economic growth, most jobs open to welfare recipients do not allow them to "break out of the cycle of poverty." In the United States, where there is full employment, the jobs found by most former welfare recipients were for unskilled labor -- positions with no job security and paying only a minimum wage. This is primarily because most welfare recipients have little education and lack the skills needed for finding a better job.
Thus, despite the promise, workfare programs are not taking their participants out of poverty. A survey of programs carried out in Wisconsin between 1989 and 1997 reveals that while the number of welfare recipients decreased by two-thirds, the number of poor dropped by no more than about 12%.
What's more, the survey showed a rise in the number of persons mired in deep poverty (having incomes totaling less than 50% of the poverty line): the proportion of food stamp recipients rose from 10% in 1989 to 32% in 1997 (Moore and Selkowe, 1999).
Another shortcoming of the workfare program is that welfare recipients absorbed into the job market often take jobs away from unskilled workers who are already there. The entry of new workers into low skilled jobs pushes out those who previously held these jobs, or lowers the wage and worsens the job conditions for all (Solow, 1998).
More specific criticism relates to women heading single-parent families. The need to work outside the home can detrimentally affect children who remain behind without proper supervision or child care. At least one study found that single mothers who participated in workfare suffered from both severe economic distress and a high incidence of depression (Selkowe and Neale, 1999).
