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Before the less-than-flattering news of his personal life began to consume media headlines, New York City mayor Rudolph Giuliani was oft lauded for having taken a large bite out of Big Apple crime. As personal matters have begun to eclipse discussion of Giuliani’s public record, very little media attention has been allotted to what may be the city’s greatest recent accomplishment—triumph over the decades-old welfare state.

What makes the city’s welfare victory especially remarkable is that most analysts thought that it simply could not be done in America’s largest city, the town that gave birth to the National Welfare Rights Organization (NWRO). Founded by George Wiley in 1966, the NWRO was established to link the newly forming antipoverty cause to the civil rights movement by organizing tens of thousands of welfare recipients to demand cash assistance, clothing, and food for their families. It was this effort, more than any other, that infused black women, who comprised over 90 percent of NWRO’s membership, with the belief that welfare was an entitlement rather than an act of generosity. NWRO provided training that, as Mark Toney, executive director of the Center for Third World Organizing, put it, "taught women to claim their dignity and respect by insisting that society has a responsibility to care for children, and that women raising children on welfare had the right to determine how to spend their benefit checks on their children’s behalf."

The strategy was both a smashing success and an ignominious failure. It succeeded in swelling the city’s welfare rolls from 250,000 recipients in 1960 to more than one million adults by the time Giuliani became mayor thirty years later. But its failure was sadly evidenced by the increasingly dire poverty that afflicted the families who settled for a welfare check, and by the intergenerational welfare dependency that followed. These negative results were unintended, to be sure, but were a very real burden to the families caught in the poverty trap and to the city that housed them.

City public policy largely ignored this trend until Giuliani established what would become the largest workfare program in the nation during the early and mid-1990s. By the end of his first term in office, 30,000 New Yorkers were cleaning city parks and providing other services in exchange for their welfare checks, and another 400,000 citizens had left the welfare rolls—a group larger than the population of any other city in the state.

Beyond Workfare

Giuliani steadfastly believed that welfare dependency was wrong, as it removed the poor from the essential economic and civic commerce of society. Such views were anathema to Great Society devotees, of course, but curiously reminiscent of the views of a famous New York Democrat, Robert Kennedy, who according to a 1998 New Republic article by Michael J. Sandel, "criticized welfare on the grounds that it rendered millions of Americans dependent on handouts and thus unable to play a role in democracy." Hence, on July 20, 1998, Giuliani boldly announced his intention to ". . . end welfare [in New York City] by the dawn of the new century," promising to replace dependency with work by requiring every person receiving a welfare check to be engaged in some sort of labor-force activity by December 31, 1999.

This was a proclamation of Herculean proportions. For starters, the workfare initiative had already moved nearly half a million of the most-prepared poor adults off the welfare rolls. Arguably more dubious than his charge to move the remaining, hardest-to-serve adults into work activity was his choice of institution to carry out this vital mission: the much-maligned 13,000-person Human Resources Administration (HRA), an agency often characterized as the most troubled welfare operation in the nation. New York Times writer Jason DeParle emphasized this in a December 1998 article in which he described the city’s welfare caseworkers as "rigidly clerical and chronically discontent[ed]." To underscore his assessment, DeParle described one welfare office that had 5 percent of its staff on worker’s compensation benefits, nearly all for injuries sustained while falling out of chairs.

To face the dual challenge of making welfare reform work while reshaping the city’s welfare bureaucracy, Giuliani hired a team of Wisconsin welfare reform veterans. To serve as HRA commissioner, he selected Jason Turner, whose immediate and unwavering message to HRA workers was that work is the best training and the best antidote to drug abuse, depression, and the other demons that plague New York’s poor. Turner believed that the best way to plan was to create change, gather information, and then keep the good, discard the bad, and start the process over again. Turner explained his approach this way: "The truth is that much of the academic research being done today has no practical value to those designing programs. If the times call for bold or even radical change, then we must move ahead forthrightly and responsibly, but perhaps without a full complement of experimental research to guide us."

Predictably, critics cited this "Ready, Fire, Aim" strategy in arguing that the city’s reform effort was being recklessly, if not carelessly, implemented at the expense of the vulnerable poor. In response, the program’s defenders claimed that such a process is one of the best ways to give public managers speed and flexibility in responding to human needs. This, they argued, was especially important given the fast pace of welfare policy changes. Ultimately, New York demonstrated that beginning an innovation without a thorough understanding of all of its consequences is the political reality of big-city reform, and that subsequent planning, assessment, and improvement can be done effectively on the fly.

Taming the Bureaucracy

Essential to HRA management’s ability to assess its own productivity and make continual improvements, of course, was a performance management system that would provide reliable data and report progress toward established outcomes. The system inherited by the Giuliani administration, however, was incapable of even identifying tens of thousands of families on assistance. Realizing that you can’t manage what you can’t measure, policy chief Andy Bush was charged with constructing a revamped data infrastructure with the primary purpose of charting the course toward achieving the 100 percent work-engagement goal. The new system, called JobStat (abbreviated for Job Statistics) identified thirty-five indicators that would mark the surest route to executing the mayor’s mission.

Because the full-engagement goal was contrary to the outcomes expected from the welfare system for the prior twenty-five years, Bush and his team did not select broad outcome measures (such as employment) but rather a set of key processes that would help local agencies build the competencies required to make the system successful. The first significant product of this system was the Engagement Report, which listed the number of participants in work, work-related activities, or exemption status. By June 1999, just six months before the full-engagement deadline, these reports indicated that more than 30,000 participants were still not engaged in work or work activities. This total was not a static number of the same welfare adults; the reports showed that while thousands were becoming engaged in productive activities, a similar number were becoming disengaged. As local agency directors gained an understanding of this dynamic, they were able to form and deploy strategies to turn it around.

This management-by-the-numbers approach was unfamiliar territory for job center managers. Consequently, Turner and Bush held weekly executive briefing sessions with the twenty-eight local office directors to hold them accountable and help them improve in their efforts toward achieving the full-engagement goal. Each local agency received a monthly report on its status, and two agencies per week met with top city officials to discuss their successes and identify obstacles in pursuit of the mayor’s objective. Bush considers the interaction between agencies to be one of the secrets of the system’s success. Although the twenty-eight local offices do not compete for profits, the JobStat system has inspired a healthy performance competition because the results are shared among the agencies. But more than competing with one another—since the ultimate goal is for each agency to perform well—agency leaders often share insights and encourage one another.

JobStat builds the management skills of center managers by creating a forum for analyzing problems and by combining the talents of HRA brass and agency directors to form strategies to fix them. During JobStat sessions, high-performing agency directors were offered an opportunity to explain their success, which served as a reward for them and as a "teachable moment" for other agencies. Agency directors possessing poor numbers were not criticized for their low performance, but instead were judged on their understanding of the situation and whether they had a strategy to improve the condition.

Through the JobStat process and subsequent technical assistance, HRA fulfilled its goal of engaging all families on public assistance in work activities, on December 20, 1999. The number of public assistance recipients in New York City has decreased by more than 597,000—a decline of 51.5 percent—since the city’s welfare reform initiative began in March 1995. It is now at its lowest level since January 1967. Every week, more than 1,200 former welfare recipients report that they have jobs, amounting to a total welfare savings of $120 million per month.

No Final Victory

Not everyone, however, is pleased with such successes. A decreasing but still-active minority of New York political activists has been expressing opposition to reform in court battles and street protests. In one case, Reynolds v. Giuliani, the plaintiffs alleged that HRA’s work-first and diversion practices prevented eligible individuals from applying for and receiving food stamps, Medicaid, and cash assistance benefits. They further claimed that this condition was a result of the city’s conversion of income support centers to job centers, a process only partially complete at the time of the court challenge. This suit prompted the lower court to enjoin the city from opening any new job centers until the matter was resolved. Although the plaintiffs were unable to prove that these benefit declines were attributable to HRA policies (actually, applications for public benefits were decreasing all over the country following the 1996 welfare law), HRA administrators used the Reynolds case as an opportunity to pursue intra–HRA deliberations that resulted in service improvements.

Unfortunately, stopping the process of converting income support centers (read: check-writing bureaucracies) into job centers has rendered the city less equipped to prepare the poor for jobs and to forge strong relationships with area employers. Opponents of welfare reform, such as the Legal Aid Society, have argued that the city’s poor have not been able to take advantage of the recent economic revival; but it is surely more difficult for the poor to participate in the new prosperity without fully charged job centers that make work their first priority. These same activists have also incited street protests aimed at demonizing Giuliani, Turner, and other reformers as uncompassionate enemies of the poor.

The evidence that followed both national and New York City welfare reform, however, strongly refutes these criticisms. Everything that should be up—employment rates, personal income—is up, and everything that should be down—welfare rolls, poverty, family breakdown—is down. Employment rates for single mothers have increased by nearly twenty percentage points over the past five years, and black child poverty has been reduced each year during the same time span. Mayor Giuliani touts welfare reform as his greatest success because it has fostered a new culture of work in the world’s financial capital. Private-sector employment has skyrocketed by more than 400,000 jobs during his administration, and the welfare rolls have been reduced by a similar margin, resulting in the longest economic expansion in the city’s history. Unless one assumes that New York City’s welfare recipients were utterly incapable of contributing to the economy, this cannot be a mere coincidence.

Remarkably, no one in the city’s current mayoral race is even discussing welfare reform, which in itself suggests that the reforms, despite the critics, enjoy widespread support. Clearly, however, there is more to be done. New York City has won a battle no one thought was winnable—taming the welfare state—but it now faces the difficult task of extending that victory to those who have yet to enjoy the benefits of the nation’s and the city’s rising prosperity.