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This finding about the wage prospects of less-skilled workers is not new. It was the motivation for the proposal of the first Clinton administration "to make work pay and end welfare as we know it." This suggests that former welfare recipients will continue to need government income supplements if they are to support their family at incomes above the poverty line. The expanded Earned Income Tax Credit (EITC) has a very important role here, as does post-welfare access to subsidized child care, health care, and food stamps. As the Cancian et al. chapter cautions, "Even consistent work may not suffice for self-support if wages are low . . . The relatively modest growth in wages for this sample is inconsistent with the suggestion that even if former welfare recipients start in low-paying jobs, they will soon move on to jobs that pay wages that can support a family above the poverty line." The good new s in Wisconsin for the sample of families that had left the welfare rolls is that twice as many of them were above the poverty line relative to those remaining on the rolls. Yet, only 27 percent of those who left cash assistance and did not return escaped poverty, and only about one-third of all leavers obtained the income level they received just before they left welfare.

An additional caveat is in order. The first wave of data from a panel study of welfare recipients being conducted at the University of Michigan 2 shows that women remaining on welfare have characteristics, not evaluated in most studies of recipients, that make their labor market prospects more problematic than those of all single mothers and even those of recipients who have already left the rolls. The study examined 14 potential barriers to employment, including major depression, post-traumatic stress disorder, maternal health, child health, labor market skills, perceived experiences of discrimination, and several standard human capital measures. It found that about 75 percent of single mothers who received cash welfare in February 1997 and had zero or one of these barriers were working in Fall 1997, whereas only about 40 percent of those with four or more barriers were working. As welfare caseloads continue to decline, this suggests that the recipients who remain will be the least employable.