Welfare reform in Wisconsin includes a mix of conservative and progressive elements that date to the date to the early 1990s. The progressive elements include a state Earned Income Tax Credit and broad expansions of child care assistance and health insurance for low-income families. The conservative element, which got the most attention nationally, was a radical redesign of its Aid to Families with Dependent Children (AFDC) program. The Wisconsin redesign, known as Wisconsin Works or W-2, was fully implemented when the federal government replaced AFDC with the Temporary Assistance program in 1996.

The conservative changes to Temporary Assistance effectively resulted in the near-elimination of means-tested income supplements for unemployed parents.  As a result, the number of unemployed, low-income parents receiving income supplements in Wisconsin declined by an extraordinary 87 percent in Wisconsin between 1993 and 1998. It remains depressed even in the current economic downturn. In a recent analysis, Tim Casey of Legal Momentum, found that the number of families receiving Temporary Assistance income supplements in the state increased by only 2.4 percent between December 2007 and March 2009; by comparison, the number of people receiving Food Stamps nationally increased by 20 percent over the same period. Similarly, a recent study by the state agency that administers W-2 found thousands of families without any income aren't participating in it.

Conservative welfare reformers have generally lauded the changes that led to these reductions in the number of Wisconsin families receiving help. For example, political scientist Lawrence Mead, a proponent of a "New Paternalist" approach to social policy, pointing almost exclusively to the reduction in the number of families helped (or as he put it, reductions in "dependency"), has argued that Wisconsin's redesign was the "most radical and, arguably, the most successful in the nation."

The problems with using this sort of low bar to determine success became apparent in 2002 when the NAACP, Legal Action of Wisconsin and other organization filed a complaint with the federal HHS Office of Civil Rights alleging that the state systematically discriminated on the basis of race and disability in administering the program. In 2004, the state's own report found racial disparities in the program's treatment of Latino and African-American parents. Other research has found that many parents who applied for help from the program and could have benefitted from it, were "diverted", that is, effectively denied assistance.

Some progress was made on this front last week when the U.S. Department of Health and Human Services (HHS) announced they had reached a compliance agreement with the state on modest improvements to the program that should reduce discrimination. The improvements are mostly common-sense ones, like conducting assessments of the potential mental or physical health limitations of parents, and other needs they may have related to employment and training, at the "front-end" of the program when parents are applying for benefits, but they're important nonetheless. As a recent research on poverty and disability by Peiyun She and Gina Livermore has shown, nearly two-thirds of working-age adults who experience consistent income poverty (36 months in a 48-month period) have a disability. (For a synthesis of this and related research, see my paper Half in Ten). Wisconsin still has a long way to go when it comes to providing effective social insurance for low-wage workers who experience unemployment, but the HHS agreement is at least a step forward.