Midwest Resources

Data resources: Midwest | Illinois | Indiana | Iowa | Michigan | Minnesota | Ohio | Wisconsin

The Upper Midwest

The seven states that constitute the primary focus of IRP's Area Poverty Research Center activities are very diverse. Comprising almost one-fifth of the nation's population, they range from small, mostly rural states like Iowa to larger states with significant urban populations (Michigan, Illinois, and Ohio). The states vary in the proportion of the population that is nonwhite (from 5.1 percent in Iowa to 20.6 percent in Illinois) and in per capita income (from $31,173 in Indiana to $37,290 in Minnesota). [1]

In the states of the upper Midwest, over 6 million people had incomes below the poverty line in the Census Bureau’s August 2007 State & County Quickfacts. Poverty rates range from 8 percent in Minnesota to 12.5 percent in Michigan. These seven states also represent a significant share of the national public assistance caseload (see Table 1 for average monthly caseloads for 1996, 2000, 2003, and 2006). In 1994, they composed about one fifth of the (then) Aid to Families with Dependent Children population; despite disproportionately sharp caseload reductions, they still represented nearly 17 percent of the national Temporary Assistance for Needy Families (TANF) population in 2006.

Also in 2006, there were over 4.8 million people in these states enrolled in the Food Stamp Program—18 percent of the total U.S. caseload. Of 55 million Medicaid recipients in 2004, 8.6 million, 15 percent, came from the seven states. In 2005, more than 3.5 million people in the seven states claimed an earned income tax credit; they received in all more than $6.4 billion, 15 percent of the amount paid out by the federal government.

Social Welfare Policy Innovation

The states of the upper Midwest vary in civic traditions, political orientation, and systems of social assistance. In one respect, however, they are alike: they have long been recognized as social policy innovators. No area of the country more aggressively exercised the flexibility available under federal waiver policy during the years before passage of welfare reform legislation in 1996, and the states have adopted widely differing programs since then. Thomas Gais, director of the Federalism Research Group at the Rockefeller Institute of Government, noted in 2000, "The Midwest states now have more experience with work-based, time limited welfare systems than any other region of the country." [2]

One consequence of this reform activity was the sharp drop in welfare caseloads already noted. At the beginning of 1996, 834,000 individuals in the seven states were receiving cash assistance. By 2006, those numbers were down by more than half, though in 2003 some states saw small increases.

Upper Midwest States: AFDC/TANF Caseload
Average Monthly Cases per Fiscal Year
1996 (AFDC)
2000
2003
2006
Illinois
224,148
83,917
37,895
36,330
Indiana
52,873
35,872
52,686
42,534
Iowa
32,785
20,025
19,969
16,675
Michigan
178,002
74,231
75,111
82,953
Minnesota
58,250
39,040
36,500
27,479
Ohio
206,722
97,969
84,292
79,485
Wisconsin
60,058
16,719
20,460
17,951
Total
812,838
369,773
328,916
305,413
Source: Data are from the U.S. Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance, Caseload Data, http://www.acf.hhs.gov/programs/ofa/data-reports/

In undertaking reform, the states of the upper Midwest took different directions. Wisconsin and Ohio integrated their TANF and workforce development systems into one state agency, whereas Michigan and Illinois kept these systems separate. Michigan and Minnesota aggressively used TANF benefits to supplement earnings; Wisconsin did so through its state earned income tax credit and child support pass-through policies. Illinois and Michigan softened their time limits by introducing state programs to support some families after five years, whereas Wisconsin and Ohio imposed shorter time limits. Iowa combined strict sanction policies with enriched service programs for challenged families. Indiana, Illinois, Iowa, and Michigan have operated welfare through state employees; Minnesota, Ohio, and Wisconsin have relied heavily on local governments.

The precipitous caseload declines in these seven states were not matched by declining investments in low-income families and children. After 1996, all seven states made significant investments in policies directed at low-income families. They experimented with one-stop centers for program participants with multiple needs, complex community networking, devolution to county and private agencies, and even the development of virtual agencies. Low-income families now receive assistance through an array of programs delivered by state tax systems, community-based service systems, for-profit organizations, and state and local public human service and labor organizations.

Between 1996 and 2000, state expenditures related to TANF increased by $200 million, and the budgetary purpose of the expenditures changed dramatically. The proportion of all TANF funds spent on traditional cash assistance across the seven states fell from 72 percent in 1996 to 30 percent in 2000. Spending on workforce development activities increased from 8 percent of TANF spending in 1996 to 12 percent in 2000. Work supports, such as child care, grew from 14 percent of TANF spending in 1996 to 40 percent in 2000. Notably, the proportion of TANF spending on family formation, family stability, and youth development tripled over the four years in an effort to nurture new workers through a variety of supports and to promote and strengthen functioning families.

The ACF profiles also show how much each state spent on cash benefits, on services, and on administration and what percentage of total TANF funds those figures represent, expressed in the table below.

Upper Midwest States: TANF Caseload Reduction and Expenditure Profiles
 
% TANF Caseload Reductions, 1996-2003>
Total TANF Funds, 2003 (in millions)
% Spent on Cash Benefits, 2003
% Spent on Services, 2003
% Spent on Admin., 2003
% of Total Funds
Illinois
-84%
$1,010
11%
84%
2%
2%
Indiana

4%
$333
42%
41%
8%
8%
Iowa
-35%
$195
41%
33%
5%
5%
Michigan
-53%
$1,224
32%
59%
7%
7%
Minnesota

-35%
$528
37%
47%
10%
10%
Ohio
-58%
$1,082
28%
57%
7%
7%
Wisconsin

-57%
$566
19%
60%
5%
5%

IRP Research Activities for the Upper Midwest

IRP researchers are engaged in academic research, program evaluation, and technical assistance efforts in all the Midwestern states featured here. Among other work, they are evaluating the consequences of welfare, child support, child welfare, and health policies, drawing on national and regional data resources, including three important regional surveys, the Survey of Wisconsin Works Families, the Illinois Families Study, and the Families Forward experimental program. They are also working with the WELPAN group of Midwestern welfare administrators to determine the impact of current spending on social welfare programs.

IRP researchers have also examined efforts by states, counties, and localities to integrate and reorganize their human services systems. Since the early 1990s, three developments have contributed to these efforts: (1) devolution has shifted policy authority downward from the federal government to state and local actors; (2) in some policy domains, priorities have shifted from cash transfers to the provision of social services and programs that promote self-sufficiency, accompanied by increased diversity in the organizations providing assistance; and (3) performance management has produced a new emphasis on measurable program outputs and new systems of performance feedback and reward. Researchers continue to grapple with questions related to how the reorganization and service integration are affecting achievement of policy goals.

[1] Data are from the U.S. Department of Commerce, Bureau of Economic Analysis, Census Bureau's State & County Quickfacts, and the Statistical Abstract of the United States, 2003. Population figures are from the 2000 Census (the 2003 estimates from the Census Bureau's American Community Survey are not markedly different).Some state information is drawn from IRP's newsletter, Focus; see "Welfare Then, Welfare Now: Expenditures in Some Midwestern States," Vol. 22, No. 1, 2002, pp. 11–14. On TANF, see the annual reports of the Administration for Children and Families in the federal Department of Health and Human Services.
[2]Thomas Gais, "Concluding Comments: Welfare Reform and Governance," Learning from the Leaders, ed. Carol Weis (Albany NY: Rockefeller Institute Press, 2000), p. 173.