PRRAC Poverty & Race Research Action Council
Home About PRRAC Current Projects Publications Newsletters Resources Contact Us Support PRRAC Join Our Email List

"The Impact of Michigan's Social Security Cuts"

September/October 1993 issue of Poverty & Race

The social services reductions which went into effect in Michigan in 1991-1992-including the elimination of General Assistance (GA) - reached deep into communities across the state, harming not only the single adults targeted by the termination of GA but 86,000 children as well, according to an impact study undertaken by the Michigan League for Human Services. The League's report summarizes the findings of an 18-month project undertaken in conjunction with Wayne State University to evaluate the impact on individuals and communities of the social services reductions. Funding was provided by the Poverty and Race Research Action Council and several Michigan foundations.

The project's findings show that severe cuts in the state's emergency needs, energy assistance and indigent medical care programs, coupled with the withdrawal of cash support to 82,000 persons receiving GA, have increased homelessness in the state and have swamped the private emergency services sector with requests for help with basic needs. The employa-bility of former GA recipients has been diminished due to the lack of a regular place to stay, growing social isolation, and chronic health problems exacerbated by the deep reductions in the state's indigent medical care program.

The report includes a review of Michigan's historical experience with the GA program, the characteristics of the GA population, and the funding and policy changes in other programs that have historically provided supplemental sup-port to GA recipients, as well as to other low-income individuals and families. Surveys and interviews with former GA participants and private community agencies that have traditionally served the needy formed the bases for evaluating the impact of the changes.

The project's key research questions tested the reliability of the assumptions underlying the 1991-1992 social services changes: that the local labor market, the private social services system and the extended family - together or separately - would replace the support formerly provided through GA and other programs.

The Ability of Other Sectors to Meet the Needs

FINDING #1: The labor market did not significantly absorb former GA recipients. Only 17% of former recipients were employed six months after elimination of GeneralAssistance, of these, half were working before the program terminated. Eighty-three percent of former GA recipients were unemployed.

The increase in employment following the elimination of GA was significant only in those counties where former recipients were few relative to the size of the labor market;

The majority of jobs held by respondents were unskilled, low-paid and part-time; the average wage was $4.40 per hour;

The employment rate among respondents who had a driver's license or a car that runs was twice the rate of those who had neither;

Case studies indicate that most former recipients were less employable 15 months after termination of assistance than they were when the GA stipend was stabilizing their housing situation.

FINDING #2: Local communities and their network of private emergency services providers were not able to meet the increased need for services which followed elimination of GA and reductions in the emergency needs and indigent health care programs. The average number of persons served weekly by agencies increased 19% in one year, waiting lists also increased, as did limitations on the types of persons eligible for services and the benefits available.

The increase in the number of persons served created significant budgetary and staffing pressures for these small agencies;

Most agencies reported requests from increased numbers of former GA recipients, newly unemployed workers and the working poor;

Survey respondents provided a greater variety of services than they did a year earlier, with notable expansion in health care and related services.

Community service providers also received an escalating number of repeat requests, particularly for assistance with food, shelter and utilities;

Nine of ten emergency services providers expected the needs of their community to increase during the next six months, while 29% believed their ability to handle requests would diminish.

FINDING #3: The extended family has not provided the support previously available through GA and other social programs. Former GA recipients risk growing social isolation.

While 12% of case study participants were staying with an adult child, one in three former recipients had not seen their adult children in over a year;

Nearly one in four interviewed could not identify a single close friend; fully half could count only one or two people as friends;

While some former GA recipients reported living with family members, data from the survey counties indicate that nearly 20,000 former recipients in those counties had no regular place to stay.

The Scope of Unmet Basic Needs

FINDING #1: The elimination of GA increased homelessness. An estimated 20,600 recipients in the study counties experienced eviction following the program's end, with a similar number reporting no regular place to stay. The length of time residing in any one place decreased dramatically for forma GA recipients.

The percentage of former GA recipients who were homeless increased from 2% to 25% within seven months after the GA program ended;

Half of former GA recipients interviewed had lived in two or more places in the year following the loss of their GA assistance;

Based on survey results, nearly 7,000 GA recipients in the study counties were sleeping in shelters part of each month.

FINDING #2: Hunger increased. An estimated 27,000former GA recipients in the study counties went without food for 24 hours or more in the six-month period following the program's end. Private emergency service providers report an escalating demand for food in all geo-graphic areas.

The number of former recipients going without food for a day or more since the elimination of GA is excessive in all regions but is especially alarming in the cities;

The rate of utilization of community meal sites by men is nearly double that of women.

FINDING #3: Former GA recipients have significant health problems, with older individuals reporting greater prob-lems. The number of community-based service organizations proving health-related services increased by 48% following the dramatic reduction in GA medical services; they reported being unable to continue providing services at the level needed.

Forty percent of former GA recipients reported having to see a doctor within the month prior to the survey, 42% visited an emergency room, and 62% took prescribed medications;

Hospital emergency rooms were providing more routine care for indigent patients as well as more treatment for poor individuals in the later stages of untreated illness.

FINDING #4: Lack of transportation was a significant barrier to accessing employment, training and health care and to meeting other basic needs; 38% of former GA recipients reported having a driver's license and less than 24% had a car that runs.

The Whole Picture Not Debated

Although the potential impact of cut-backs in the state's emergency assistance, energy and indigent medical care programs drew far less attention during the public debate over the 1991-1992 social services changes than the elimination of GA, the project found that the withdrawal of $131 million from these programs had a profound impact on former GA participants, on thousands of families, and on community charities.

Between 1991 and 1992, state expenditures for emergency assistance were reduced by 69%, energy assistance by 64% and indigent medical care by 79%, according to the report. The substantial and simultaneous reductions made in these supplemental assistance programs resulted in former GA recipients being stripped of virtually all assistance, and emergency services being withheld from a large number of families as well. Between 1987 and 1991, an average of 58,000 families each year were assigned through the state's Emergency Needs Program; only 15,000 were assisted in 1992 under the more restrictive State Emergency Relief program which took its place.

In its conclusion, the report notes that supporters of the deep cuts of 1991 presented them as necessary to the state?s struggle to focus adequate public resources on poor families with children. Not even the most vocal opponents of the cuts could have predicted that the changes would carry so much harm for those same Michigan families the ending of GA was purportedly designed to help.

The Study's Impact

In the FY 1994 appropriations process for the Department of Social Services, the League was invited to present findings on the effects of 1991 reduction before the Social Services Subcommittee of the Michigan House Appropriations Committee. An extended discussion was held on the health status of the population at risk after GA ended and the difficulties experienced by former recipients in meeting the stringent eligibility requirements for State Disability Assistance (SDA) - the replacement program for GA recipients with serious health problems. As a result of the League?s presentation and subsequent discussion, it appears that the SDA criteria - which represent a more difficult standard than is used for Social Security and SSI Disability - may be relaxed.

The study and the extensive media coverage it generated, combined with statewide conference devoted to the study's findings and a summit of Michigan's overwhelmed private emergency services providers, have kept the discomfort level regarding GA termination high among policy makers and the general public.

Inquiries from advocacy groups, policy makers and the media in other states have been numerous; most are from states that are considering termination of benefits to their "able-bodied" citizens in need. The League staff has been able to use the study's findings to dispel perception that little harm was done in Michigan in October 1991.

All who worked on the study shared strong sense that the full impact of these social service costs on individuals, families and communities is not yet known.

The impact on the state's local economies of the termination of General Assistance is tantamount to losing 24,000 minimum - wage jobs. This fallout from the reduction in dollars circulating in the local economy will be disproportionately felt in Michigan's old manufacturing communities - where housing is cheaper, where an abundance of poor people and people of color reside, and where many tens of thousands of well - paying manufacturing jobs disappeared over the last decade, depressing their economies and eroding their tax base.

If cities are programmed to be the poorhouses for the state's metropolitan areas - as is believed by many thoughtful observers - stripping jobless individuals of all direct and supplemental state aid will inexorably push that process along.

A large number of housing units will likely be abandoned and will come off the property tax rolls in urban and rural areas as a result of terminating GA - further eroding the local communities' tax base and their ability to provide essential services.

The full health effects on 82,000 individuals of increased homelessness, inadequate nutrition, diminished employability, and growing social isolation also yet to be discovered - their costs to be calculated.

Finally, the long-term impact children and families of the social services downsizing of 1991 is more than worrisome, given the deteriorating status of Michigan's children in the last decade.

The upfront costs of the 1991 "social experiment" are being shifted to the individuals, families, local municipalities and private helping agencies, which are trying to pick up the pieces. Where long-term costs will be borne is uncertain, but all indications are that they will be high.

Join Our Email List
Search for:             
Join Our Email List