When Mayor Michael Bloomberg announced this year that he was making the fight against poverty a priority, he started by talking about the success of the city's welfare reforms over the past decade. Then he conceded a failure.

"Even though we have become a national leader in promoting welfare-to-work, our great city remains home to the nation's poorest congressional district," he said in his State of the City speechthis January.

Indeed, New York is in the strange position of being the national model for welfare reform -- which conservatives describe as the most effective anti-poverty program in decades -- but also the only large city in the country where the number of people facing poverty is increasing. The city's welfare rolls recently hit a 40-year low mark, but one out of five residents of New York City now live below the federal poverty level. Some argue that as many as one thirdof New Yorkers should be counted as poor once the high cost of living is factored in.

While poverty touches almost every policy issue in New York, many look to the city's policies on social services to gauge the city's performance in serving its poorest residents. Because Rudolph Giuliani's policies were so distinctive, Bloomberg's will inevitably be seen in comparison.

Since taking office in 2002, Bloomberg has said that he will not tamper with Giuliani's aggressive practices to reduce the size of the welfare rolls.

But as mayor, Bloomberg has also taken steps that seem to fly in the face of the legacy that he claims to uphold. He has said he wants to make it easier for welfare recipients to access education and job training, and his administration has boasted of the increased number of New Yorkers who receive food stamps -- things unlikely to have been heard from City Hall during the Giuliani years.

After being criticized for ignoring poverty-related issues in his first term, Bloomberg is making them a higher priority in his second. Earlier this year, the mayor formed a task forceon poverty, based on a similar task force he established around chronic homelessness. Over the summer, the public-private commission is planning to examine strategies on how to address the myriad of issues that affect those in poverty, and confront them in a comprehensive way.

PUBLIC BENEFITS AND THE GIULIANI LEGACY

In New York, Mayor Rudolph Giuliani began aggressively reforming welfare in New York City soon after taking office. His policies were already well underway by 1996, when Bill Clinton signed the Personal Responsibility and Work Reconciliation Act and ended "welfare as we know it."

The federal law's major effect was to put a five-year cap on welfare benefits, and to require welfare recipients to spend a certain amount of hours per week either working or engaged in activities defined as acceptable job training practices. State and local governments had some freedom to experiment, however, and throughout the 1990s New York City put its own restrictions on those applying for public assistance. They were consistently tougher than the standards set at the national and state levels.

The city required welfare recipients to participate in a simulated 35- hour workweek. Three days were spent working, often in unpaid Work Experience Program jobs, and the two remaining days were spent in job placement or job training activities. A defining characteristic of Giuliani's administration was its belief that the culture of welfare, not necessarily a lack of training or skills, was the main obstacle facing those on welfare and steady employment. Job training and education, therefore, were seen as ineffective.

"The administration was very committed to a policy of work first, which inherently meant discouraging education and training," said Don Friedman of the Community Service Society, a critic of Giuliani's policies.

The other major characteristic of the Giuliani years was called "diversion" - an administrative policy of making welfare less "user-friendly". Both supporters and critics of this practice said it discouraged people from seeking welfare benefits; advocates of education programs complained that people were also kept from those programs even when state law gave them the right to take them. The Giuliani administration regularly ended up in court over this practice and several times was forced to stop keeping people from accessing benefits and using education as a credit towards work requirements.

On both the national and local level, the welfare rolls plummeted in the late 1990s. Meanwhile, between 1996 and 2000, the number of single mothers - those most affected by changes in welfare law - holding jobs increased from 66 percent to 76 percent nationwide, and the national and local poverty rates dropped. When Giuliani left office, the number of people on welfare had fallen constantly for six years, from 1.1 million to well under 500,000.

Starting in 2000, though, the proportion of employed single mothers began droppingoff significantly, and more people slipped into poverty. Both trends continue to the present day.

Those who opposed welfare reform believed that much of the gain made in the late 1990s had been due to the robust economy (a point contestedby those who supported the changed policies). They called for changes in welfare policy reflecting the increased difficulty of finding work in the slowing economy. The Giuliani administration and other proponents of aggressive welfare reform rejected such arguments.

BLOOMBERG AND PUBLIC BENEFITS

Michael Bloomberg was a relative unknown when he first came to office, and supporters of welfare reformworried that he would agree with such arguments and change course on welfare. Maror Bloomberg has largely followed Giuliani's lead, keeping the basic framework of his predecessor's strategy in place. He has also made more of a show of providing assistance to those in need of social services and being more active in helping people move off the welfare rolls.

"It's brilliant the way he has convinced Giuliani conservatives that he hasn't changed the policy, and the way he has convinced liberals he has," Joel Berger of the New York City Coalition Against Hunger told the New York Observer late last year.

If nothing else, Bloomberg has shifted the tone on welfare. This is a change that shouldn't be overlooked, say those who felt locked out of policy debates during the Giuliani administration.

Access to Education and Training

At times, Bloomberg has seemed to take a hard line towards allowing welfare recipients to use training or education to count as work requirements, echoing Giuliani's belief that actual work experience would prove more effective in allowing people to secure permanent jobs. In 2003, the City Council passed a billthat would have allowed GED and English language classes to count towards welfare work requirements. Bloomberg vetoed it, accusing the council of "reviving a dated, discredited policy that we long ago learned was a failure." The law eventually ended up in court, where Bloomberg prevailed.

At other times, however, Bloomberg has shown an interest in increasing access to education. Shortly after his fight with the council, the mayor settled a major lawsuit loosening work requirements to allow more education. He also played a strong role in lobbying Albany to further loosen such restrictions.

Some say that these changes have had little effect on the ground, though, because the city continues to make it difficult for welfare recipients to fulfill their work requirements through legally allowable education or training. The number of people being sanctionedfor not complying with work requirements remains roughly the same as it was during the Giuliani administration.

"They close your case for any reason whatsoever," said Roxanna Henry, a welfare recipient who takes classes at Hunter College through the Welfare Rights Initiativeas part of her work requirement. She says she is called in every three weeks and told - incorrectly - that she is not in compliance with the city's work requirements. "I keep going to these hearings and winning," she said.

Welfare Recipients With Disabilities

Many people who were on welfare in the past, when forced to find work, found it relatively easy to do so, argues the Bloomberg administration. Today, however, the welfare population has a higher proportion of people facing mental or physical disabilities than it has in the past.

Adjusting to this shift, the city has created a program called WeCARE, which the city says has assessed over 90,000 welfare recipients in order to help them confront "physical and mental health barriers" to employment.

The Bloomberg administration also urged Washington to take such barriers into account during the recent debate over the renewal of the national welfare reform law, lobbying against proposals which would have required states to make sure that a greater percentage of their welfare recipients were working. Arguing that over half of the city's welfare recipients now faced "substantial barriers to employment," the city's Human Resources Administration said that it could not meet the higher levels of work participation. Conservative supporters of welfare reform, who do not feel that there has been a significant change in the makeup of the welfare population, objected. "It's hard to decide which is more troubling: the Bloomberg administration's arguments or the evidence it cites for them," wrote the Manhattan Institute's Heather MacDonald.

The rulesthat were eventually passed this February were not as strict as those first proposed, though they were stricter than the city had hoped for. Currently about 37 percent of those on the New York welfare rolls participate in something that the federal government accepts as a work activity. If New York State cannot meet the new requirement - 50 percent of welfare recipients participating in some form of work activity - then it stands to lose $217 million, the lion's share of which would have been used in the city, according to the Human Resources Administration.

SUCCESS?

Proponents of welfare reform look at the number of people on public assistance as the primary gauge of success. By this measure, the Giuliani administration was wildly successful, and the Bloomberg administration has continued that success. This April the city announced that there were 402,000 people on welfare, a 40-year low.

The New York Post called on Bloomberg to " take a bow," calling the national welfare reform "one of the most successful pieces of social legislation ever enacted on a national level." The Post and others sharing this view focused largely on welfare reform's success in changing a culture of dependency. They have also pointed out that the dire predictions that opponents of welfare reform have made over the past ten years - huge increases in child poverty, for instance - never materialized. The poverty rate in New York City now is actually lower than it was before welfare reform was instituted. Critics of welfare reform acknowledge that their more dire predictions did not come true. They do point out, however, that New York City has seen its poverty rate rise during each year of the Bloomberg administration. Between 2003 and 2004, the last year for which there is data, the city was the only large city in the country where poverty got worse.

The rise in poverty is not necessarily being blamed on welfare policies - experts cite a weak job market, poor public education system and other factors as well. But when poverty is rising, some argue, welfare and other social net programs become that much more important.

"If the poverty rate is going up and the welfare rates are going down then something is wrong," said Maureen Lane of the Welfare Rights Initiative.

What Happens To Those Who Leave?

A more appropriate way to gauge whether welfare reform is working, some say, is to look at the fortunes of those who leave the rolls. Currently, the city has only a cloudy picture of what happens to such people.

The Bloomberg administration says that it has focused its efforts on job placement and retention through its Back to Work initiative. It has contracts with companies who place recipients in jobs, and has restructured these contracts so that they are paid not only for placing people in jobs, but also if people stay in these positions. Of welfare recipients who find jobs, 88 percent held the positions after three months and 75 after six months.

But the numbers of welfare recipients who have found work has dropped off sharply in the last several years. In 2005, the city helped approximately 85,000 former welfare recipients find work, according to the Human Resources Administration, as opposed to 101,000 in 2002. The city's Human Resources Administration says that this is at least in part to the fall in the overall rolls. It is not clear how many people leave the rolls and fail to find work, it adds, because the city only tracks those who it actually places in jobs.

Studies looking at specific job placement programs have shown disappointing results. Community Voices Heard, an advocacy group for low-income New Yorkers, examined the performance of the city's Employment Services and Placement Program, which works with about 4,100 people a month to place them in jobs. Only eight percentfound work within six months, it determined.

The group recommends that the city's Back to Work initiative provide the companies that place welfare recipients with resources to train welfare recipients, as well as hire an outside consultant to analyze how well the city's job placement programs are working.

There is also a question of what types of jobs people are finding, and whether these jobs will move people out of poverty.

The city says that the most typical placements include food service, at an average wage of $7.30 an hour and clerical positions at an average wage of $9.26 an hour, but has no systemic numbers. In general, those who work in low-income jobs - whether they are coming off welfare or not - are having a tough time in recent years. According to Poverty in New York 2004, the most recent of a series of annual surveys done by the Community Service Society, the annual earnings for low wage workers fell by 6.5 percent over the past four years.

The problems of the working poor, say advocates, are the ones that must really be addressed if low-income New Yorkers are going to be able to lead stable, independent lives.

"This is not a matter of welfare," said David Jones, the president of the organization and a member of the mayor's task force. "This is a matter of low wage workers not making enough to make ends meet."