Wisconsin Needs a New Era of Welfare Reform

Wisconsin Works

Wisconsin Works (W-2) is the state’s welfare-to-work program, which seeks to help low-income parents and pregnant mothers find employment. Wisconsin Works was enacted in 1996 under the leadership of then-Governor Tommy Thompson. It is funded through federal block grants for TANF and imposes new work and training requirements for those receiving cash assistance.

Wisconsin was considered to be a "pioneer," being the first state to replace the welfare model of Aid to Families with Dependent Children (AFDC) with TANF and create a system that encouraged, not discouraged, employment.

Under Wisconsin Works, welfare recipients are expected to participate in workforce development training and activities, job searching, or employment for more than 30 hours per week, or they would not be eligible to receive their benefits anymore. New reforms also instituted various time restrictions on how long a recipient could receive benefits, going beyond the reforms made by the federal government in the late 1990s.

The initial results of the Thompson-era reforms were staggering. According to a report from the Hoover Institution in 1997, Wisconsin's various rounds of welfare reforms in the 1980s and 1990s, including Wisconsin Works in 1996, led to welfare caseloads dropping by 50%. Additionally, in 28 of Wisconsin's 77 counties, the welfare rolls dropped by more than 80%.

Another report from the Wisconsin Department of Workforce Development found that 54% of people who left W-2 in 2002 were employed and earned an average of $3,428 per quarter.

Despite initial success in the program, there were still growing concerns about transitioning people off of welfare and finding full-time employment for long-term self-sustainability. So, Governor Walker ushered in a new round of welfare reforms, known as “Wisconsin Works for Everyone," in 2018.

Some of the reforms under Wisconsin Works for Everyone included asset restrictions for receiving welfare benefits, new employment and training requirements for FoodShare, instituting a performance-based payment system for Wisconsin Works contracts, and allowing the Department of Administration to contract with private service providers to increase performance.

However, since the Walker years, Wisconsin Works has not had any major reforms, causing Wisconsin to lose its national leadership role in innovative welfare reform. Looking at other states’ welfare systems that have recently made impactful reforms can serve as a useful guideline for what Wisconsin should do to improve Wisconsin Works and its welfare system more broadly.

The Utah & Florida Models

For instance, Utah has been given a lot of praise from free market policy groups and conservative lawmakers for its implementation of its “One Door” welfare reform. Utah’s “One Door" model is unique, as it is the only state that administers welfare benefits and employment services all under one state agency.

This means that whether a welfare recipient is receiving SNAP, Medicaid, or TANF, they are going to the same state agency and must receive rigorous employment help. In contrast, Wisconsin only has Wisconsin Works and TANF bundled together under one program, meaning employment aid is only required for TANF recipients. While that was very innovative when it was implemented in the 1990s, it is a far cry from Utah’s streamlined system.

It is worth noting that under current federal law under the Workforce Innovation and Opportunity Act, states are currently barred from making their welfare systems similar to Utah’s. Utah was able to be grandfathered in due to its early action in bundling together all of its welfare programs. So, legislative change would be necessary at the federal level in order for Wisconsin to be able to implement a similar “One Door” model.

In 2025, Utah also eliminated its benefit cliff. Benefit cliffs occur when a welfare recipient avoids accepting a higher-paying job because the loss of government benefits outweighs the financial gains from increased wages.

Utah removed barriers of benefit cliffs through its Navigation and Financial Planning for Self-Reliance pilot project, which was implemented in 2025. The project works directly with individuals to identify who may be constraining their income due to the fear of entering a benefit cliff. The government can then work with that individual to pursue better employment opportunities while also increasing the recipient’s overall economic standing by preventing an abrupt slash in government benefits.

The results of Utah’s reforms speak for themselves. Utah is the number one state in the country for upward social mobility. Their free market reforms and prioritization of efficiency and employment have worked wonders on the welfare system.

Arkansas and Florida have also been innovative with their welfare-to-work programs that prioritize employment for their TANF recipients. Both states offer supplemental wages for welfare recipients who land jobs in the private sector.

This helps ensure that TANF recipients are getting secure jobs in the private sector that are likely to have long-term stability and fuel economic growth. This could be a useful reform for Wisconsin and would reduce the state’s need to hire W-2 participants for government jobs.

Wisconsin should also increase coordination with the private sector by strengthening its performance-based contracting within Wisconsin Works. While Wisconsin does already award contracts to organizations that successfully administer employment services to help individuals land jobs, the state could go much further by following other existing performance-based models, such as the one initially created by former mayor Rudy Giuliani in New York City. There, contracts are awarded based on long-term employment outcomes, retention rates, and earnings growth.

This type of performance contracting would benefit the Badger State, as it would be required to keep extensive data on the long-term success of the W-2 program and help identify flaws within the current system.

Wisconsin's Next Era in Welfare-to-Work

While Wisconsin was an early leader on welfare reform, it is clear that it now has some catching up to do. As other states continue to modernize their welfare to work programs by consolidating bureaucracy, eliminating benefit cliffs, increasing public-private partnerships, and strengthening performance-based contracting, Wisconsin should be looking to successful models that already have proven results.

With Wisconsin set to undergo a change in leadership following the gubernatorial election this fall, the state will have an opportunity to reevaluate its approach to welfare reform and employment initiatives.

If Wisconsin is serious about aiding its residents, the state must prioritize self-sufficiency, upward mobility, and permanent employment so welfare recipients are not trapped in endless cycles of government dependency.