In the summer of 1996, President Bill Clinton signed into law significant welfare reforms passed by a Republican-led Congress. The centerpiece of the reform package was a set of strong work requirements as a condition of assistance. Thirty years later, it’s time for Wisconsin to pursue another wave of social safety net reforms aimed at fighting poverty by promoting work and self-sufficiency.
The 1996 reforms eliminated open-ended cash entitlements for low-income families, gave states more authority to design and manage their welfare systems, and required adults to actively seek work or participate in job training.
The reforms were met with dire predictions of increased poverty and deprivation. Senator Daniel Patrick Moynihan called welfare reform “the most brutal act of social policy since reconstruction.” Senator Edward Kennedy called it “legislative child abuse.” Dire predictions of mass poverty, particularly among children, abounded.
These predictions proved false. An analysis published by the Brookings Institution ten years after federal welfare reform was enacted concluded simply that “it worked.” The analysis showed that welfare caseloads plummeted and that the vast majority of people who left the welfare rolls found work. Most importantly, child poverty dropped dramatically.
A recent analysis authored by Angela Rachidi, a nationally recognized expert on social policy and a visiting fellow at the Badger Institute, argues that, thirty years later, Wisconsin has important opportunities to learn from the successes of the 1996 federal welfare reforms and enact a new agenda of work-based welfare reform at the state level.
This analysis, published as part of our 2026 Mandate for Madison, shows that, after a substantial drop during the 1990s, there has been little further progress in reducing child poverty. Since 2000, the child poverty rate has generally hovered between 10 and 15 percent. It also reviews recent research showing that Wisconsin’s economy is characterized by limited upward mobility. Specifically, children born into low-income families in more recent years have experienced lower income growth as adults than similar children born earlier.
The study offers several recommendations for making further progress on child poverty and economic mobility. First, it recommends learning from the experience of welfare reform in the 1990s by implementing work requirements for key safety net programs.
It also recommends reviewing the tax code to identify and remove “benefit cliffs,” where additional income is largely offset by benefit reductions, as well as marriage penalties. These reforms can create better incentives for employment, earnings growth, and family formation.
Rachidi also recommends better coordination of benefits and employment training through a “One Door to Employment” model that brings public assistance and workforce programs together under a single administrative structure. Rather than requiring recipients to navigate separate agencies, applications, and caseworkers, the model provides one point of entry where an individual’s eligibility, barriers to employment, training needs, and path toward work can be assessed and managed in a coordinated way.
The common thread running through these recommendations is the recognition that promoting employment, rather than simply awarding benefits, should be the central goal of safety net program design.
When you consider that in 2024 only 2.1 percent of Wisconsinites were below the poverty line, it becomes clear that the most promising strategy for fighting poverty is to promote employment.
This statistic has implications for other areas of policy. While many activists focus relentlessly on increasing Wisconsin’s minimum wage, their efforts would be better spent promoting policies that make it easier for people to find work. Given significant evidence that minimum-wage increases reduce employment, they should be viewed with skepticism as an anti-poverty tool. Across these and other policy areas, the evidence shows that promoting work should be the central focus of Wisconsin’s anti-poverty efforts.
During the mid-1990s, federal welfare reform emphasized employment and achieved substantial reductions in reliance on public assistance and in poverty. Thirty years later, Wisconsin can build on that success by implementing another wave of pro-work safety net reform, this time at the state level.
Ben Eisen is vice president of research and policy for the Badger Institute.
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