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The Providence Journal (R.I.)
In the decade since the pathbreaking welfare reforms of 1996, the share of single mothers working has increased, and the welfare rolls have been halved, experts concur.
But the reforms' influence on family incomes and children's well-being isn't as clear-cut. Did welfare's overhaul drive the drop in child poverty in the late '90s? Do recent increases in child poverty suggest that the system doesn't work in a weak economy? Are state programs effective safety nets for America's most disadvantaged families?
New research shows that how low-income families have fared over the past decade depends on whether they stayed on welfare, left, or avoided it altogether. Many families now on welfare are much better off since the reforms took hold. In most states, welfare recipients can work at a paid job and still get a welfare check for at least a while, and about one in three families is taking that route.
Most such families are still poor (living on annual incomes below the official poverty line of roughly $20,000 for a family of four), but fewer live in deep poverty (on less than half that amount).
Families able to leave welfare have higher incomes and work more than those remaining on welfare. But as the changed welfare system evolved, the share of income from earnings declined, while income from government disability benefits increased; average family income stagnated. An increase in the receipt of government work supports -- such as child care, Food Stamps, and health insurance -- helped counteract the flat income trends.
In 2002, more than three in five of these families had incomes below the poverty line. One in five had no jobs or any type of public cash assistance. Surprisingly, low-income families that have never been on welfare have done the worst since 1997.
True, compared with current or former welfare recipients, more are married and fewer have incomes below the poverty line. Yet fewer were working in 2002 than when reforms first rolled out, and their incomes have stalled. Extreme poverty ensnared more single parents (those most likely to turn to welfare under the old system) in this group in 2002 than in 1997. And one in 10 low-income families with no welfare history had no job or cash public assistance.
In short, life for many low-income families under today's welfare regime is extremely precarious. In 2002, more than 900,000 families with children somehow scraped by without jobs or any cash help from the government. Whether these families leave or forgo welfare voluntarily, or whether states' reformulated programs have created a new class of destitute families disconnected from the safety net, is unknown.
What we do know is that welfare's current way of doing business discourages participation, penalizes parents who do not find employment, and eventually cuts all but the most disabled parents off welfare. So even though these reforms have led to increased work and reduced caseloads, there is growing consensus that we need to understand why some families are falling through the safety net.
States now shoulder most responsibility for fixing America's safety net. Their first order of business should be giving parents access to unemployment-insurance benefits or a cash welfare benefit to tide them over during periods of unemployment. And parents with limited skills, insufficient work experience and health problems -- characteristics that distinguish extremely poor disconnected parents -- need hands-on help in finding a job. These families also need child care, health insurance and Food Stamps as they move into work.
In short, states' welfare programs should encourage work, invite the most disadvantaged families to seek help, and provide them with more intensive case-management services.
Unfortunately, recent federal policy changes have made it harder for states to fix their safety nets. The welfare legislation reauthorized in February requires states to get a much larger share of welfare recipients into federally defined work activities by October, or else face funding cuts. Compliance will probably distract states from innovating with services that have longer-term payoffs for the most disadvantaged. A more effective policy would increase work-participation rates more gradually and reward states financially for reducing the number of families coping without jobs or cash assistance.
If the revolution in work was the great success of welfare reform's first decade, creating a secure safety net for low-income families should be the next frontier.
Pamela Loprest and Sheila Zedlewski are, respectively, principal research associate and director of the Urban Institute's Income and Benefits Policy Center. The opinions are those of the authors and do not necessarily reflect those of the Urban Institute, its trustees, or its sponsors.
The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
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