Welfare Reform: The Failed Anti-Poverty Prescription

What is Welfare Reform?

In 1996, President Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act, commonly known as welfare reform. This law slashed the 60-year-old vital safety net for millions of poor and working families. The new system has altered the administration of welfare in many ways:

It ended the human right to a base minimum needed for survival. Temporary Assistance to Needy Families (TANF) replaced Aid to Families with Dependent Children (AFDC). Cash assistance to poor people with poverty-level income is no longer an entitlement; they are now benefits with a work requirement and a five-year time limit.(1)
The federal government devolved the responsibility to administer welfare, such as determining welfare benefits or job training, to state and local governments, charities, and private companies (i.e. Lockheed Martin). The federal government gives states money for welfare through fixed block grants, which binds states from obtaining more federal funding if caseloads increase.
It limited legal immigrants access to TANF, food stamps(2), Medicaid, and Supplemental Security Income (SSI).
The programmatic and policy changes brought upon by welfare reform have led to a lack of accountability by federal and state governments. States can now choose their own welfare reform strategies, but without upholding federal guidelines, including federal civil rights standards. Although states now have greater flexibility, they must still tailor their strategies to match the focus of federal welfare reform: job preparation, work, and marriage. (3) While the federal government has absolved itself from ensuring that all people living in the U.S. have the base minimum needed for a dignified life, it does not guarantee through TANF an advanced education, living wages, or health care coverage.

Welfare Reform a Success?

Republicans and Democrats alike have quickly heralded welfare reform a success by pointing to the drop in welfare caseloads.

In 1994, before welfare reform, 5.1 million families received AFDC. By 2001, the number of caseloads had halved to under 2.2 million families.(4) Similarly, from 1995 to 2000, the number of households with children receiving food stamps dropped from 6.5 to 4 million.(5)

But no one knows what has happened to the mothers, children, and elderly who left welfare.

When welfare reform was signed, unemployment levels hovered at 3 percent. The decision to end the nation's oldest safety net was based on the assumptions that a job could lift a family out of poverty and that jobs would always exist for those eager enough to go out and get one.

In the six years since welfare reform, neither of these assumptions has held true. The standard of living did not improve for most recipients as they left welfare, and studies show that even those who worked full time did not earn enough in wages for a decent standard of living.(6)

Myths Behind Welfare Reform's Success

Myth 1:	Welfare Reform Will Lead to Self-Sufficiency
Reality:	Working Hard, Living in Poverty

Some of the poorest members in our society are single mothers with children. Welfare reform supporters contend that all that mothers need to become self-sufficient is to get a job.

The percentage of single mothers with children earning paychecks rose, bringing the proportion of those working up to 68 percent.(7) Despite the high percentages working, 51 percent of these low-income families are still living in poverty.(8)

On the whole, the incomes of single mothers have gone up, but only slightly above the amount they survived on while on welfare.(9) Since leaving welfare, they have earned an average of $8 per hour, or $14,000 per year for a 35-hour week. (10) Other studies show that, on average, women who left welfare to join the workforce earned $12,000.(11)

Those who left welfare are not earning living wages, and they have lost other related benefits, such as Medicaid. But their employers are not covering this essential need for health insurance-only 14 percent of working welfare recipients have employment-based health insurance.(12)

While monthly income gains from working averaged $100 to $135, more than two-thirds of working mothers still relied on supplemental income. One in six families still rely on food banks, and one in five lived in roach-infested housing.(13)

More education, particularly attaining a college degree, is one sure strategy to break the cycle of poverty. Welfare used to support single parents who sought college degrees, but now education can be considered work for only 12 months. In some states, only 30 percent of the entire caseload can be considered for education as a work requirement. While we push hard-working mothers off welfare, we have done very little in the way of providing adequate childcare and support, or of giving them any hope that they will be able to break the cycle of poverty.

Former welfare recipients now working are not earning enough to support their families because they disproportionately work in low-wage industries and occupations. Over 75 percent of low-income single parents work in four typically low-wage occupations: service; administrative support/clerical; operators/laborers; and sales.

Myth 2:
Welfare Reform Strengthen Families

Reality:
Children Are Casualties of Welfare Reform

In 2000, there were more than a million children-only welfare caseloads. Today, among all welfare households, 35 percent of benefits recipients are children, versus in 1988, when child-only cases comprised 10 percent of all caseloads.

Why the growth in child-only cases? The strict eligibility rules of the 1996 welfare law took away eligibility from many parents. For example, immigrant parents lost many of their benefits, and some parents have exhausted their time limits. And with the changes in family structure, with the growth in kinship care parents (e.g. grandparents), more than half of child welfare cases live apart from their parents.(15)

How do cuts in benefits to parents affect children in welfare households? A recent study by the Boston University Medical Center found that infants and toddlers in families whose welfare benefits were reduced or eliminated by 1996 welfare sanctions have higher rates of hospitalization and hunger than infants whose families have kept their benefits. The study found that infants and toddlers in families who have been sanctioned have approximately a 50 percent higher risk of being hungry than children whose families receive welfare benefits.(16)

Another study of welfare leavers in California, Connecticut, and Florida found that one in five mothers cut the size of meals because they didn't have enough money to buy more food.(17) The same study found that two in five women who left welfare showed signs of clinical depression-twice the number in the general population. Maternal depression sharply affects young children's development.(18)

Myth 3:
Welfare Reform Means Jobs for Those Willing to Work

Reality:
Unemployment Reaching 6 Percent

Lawmakers who passed welfare reform must have failed U.S. History in high school. Federal welfare assistance programs, like the predecessor to TANF, were established in response to the Great Depression in the 1930s when it often didn't matter how willing one was to work.

The increase in the unemployment rate (now hovering at about 6 percent) and other measures indicate that the recession that began in 2001 has hit workers just as hard as that of the early 1990s.(19) Some 2.3 million workers have become unemployed in the past 18 months.(20) With 8.4 million Americans unemployed today, politicians may want to reconsider the true success of welfare reform.(21)

Myth 4:
Caseload Declines = Success of Welfare Reform

Reality:
Caseload Declines = Diversionary Tactics by Welfare Administrators

Several factors have been driving down the welfare caseloads since 1996. One undisputable fact is that drops in caseloads occurred in the late 1990s when U.S. unemployment rates hit 30-year lows.(22) However, recent studies show that the strong economy might have had more to do with people leaving the rolls than the actual success of welfare reform programs. Caseloads in most states have increased as the national economy has dipped into a recession.(23)

But aside from the strong economy, have welfare programs and policies worked? The priority of welfare reform has been to keep caseloads down, instead of helping families break the cycle of poverty. Practices by state and county welfare agencies, private contractors, and charities have been aimed at pushing poor families off TANF and food stamps and into the first available job.

The most recent Census Bureau reports that the number of people living in poverty rose 1.3 million in 2001, bringing the total number of people living in poverty up to 32.9 million.(24) Today, approximately 2.2 million people are on welfare.

Why aren't more people who are legally eligible for welfare assistance receiving benefits? According to the Urban Institute, before welfare reform, 84 to 85 percent of people living with poverty incomes were receiving food stamps and cash assistance. After welfare reform, the percentage of eligible people dropped dramatically. As the above chart indicates, in 1998 and 1999, 56 percent of eligible poor people were receiving TANF, while 67 percent of eligible people received food stamps.

The Urban Institute found that new welfare program rules, greater perceived stigma among aid recipients, wider variation in eligibility rules across welfare programs, and new eligibility rules for immigrants contributed to lower participation rates in these benefits.(25)

Diversionary Tactics

Some welfare policy experts attribute the drop in welfare caseloads to the indirect denial by state and local welfare agencies, charities, and private companies in properly administering welfare benefits to those who qualify. Instead of obtaining benefits that they were eligible for, many families were diverted from applying for benefits, sent to a food bank, or told to apply for child support from an absentee parent.(26) The majority of states used some diversionary enrollment strategy before offering benefits, such as requiring documentation of job searches before giving any assistance, which discouraged poor people from applying for benefits.(27)

According to a study by the Applied Research Center, the denial of services to eligible TANF recipients is especially common for people with cultural and language barriers. The study highlights a Department of Health and Human Services report that found high levels of discrimination against limited-English speakers in New York welfare offices. Another study of six states revealed that 44 percent of limited English speakers had to locate their own translator and 33 percent were not provided an application form in their own language.(28)

Impact of Diversionary Strategy

Low participation rates in TANF and food stamp programs means that families that need help and are legally eligible to get it are not receiving the benefits they need to lead healthy, decent lives. This has meant that the already poor are falling into deeper poverty. In the first two years of welfare reform implementation, the number of single-parent families living in extreme poverty grew by 300,000 families. This is especially problematic because studies show that supplemental income and supports like SSI, TANF, and food stamps could reduce extreme poverty by as much as 70 percent.(29)

Reasons for Leaving Welfare

The most common reason for leaving the welfare system (51 percent) was getting a job. Of the 51 percent of welfare leavers who went to work, one in five (22 percent) returned within two years. Of those that left because they found jobs, many returned because they lost their jobs or because they did not earn enough income to survive. In contrast, families that used transitional support services-such as childcare, health insurance, and help with expenses-were less likely to return.(30)

The next major reason (22 percent) welfare recipients left was because they no longer wanted or needed TANF or because their income increased by other means than through earnings. This may reflect the difficulties and frustration with the bureaucracy welfare applicants face when applying for benefits.

Approximately 13 percent left the welfare rolls due to sanctions, and 14 percent left for other reasons, including moving and reaching the end of a time limit.(31) Those with very little education, limited work experience, and poor health were the most vulnerable to return to welfare.(32)

More than one-third (36 percent) of people who returned to welfare were those who had left because they were sanctioned.(33) States vary in the punitive measures they employ in sanctioning, although some studies reveal that race may have more to do with whether states pursue tough sanctions and who gets sanctioned. A study conducted by Bryn Mawr College and American University found that race was the most significant variable in determining whether a state would adopt aggressive get-tough welfare policies.(34) That is, states with high percentages of people of color were more likely to pursue tough sanctions on welfare recipients. In a similar study of the relationship between welfare and racism, a 1999 study of welfare leavers in Florida found that African Americans were more than three times as likely as whites to leave TANF due to sanctions.(35) Leaving welfare administration in the hands of state and local agencies, charities, and private companies has also stripped the welfare system of being accountable to federally mandated guidelines, such as civil rights laws that ensure equal treatment of benefits recipients.

Call for Action: TANF Reauthorization

The 1996 welfare law expires this month, and Congress and President Bush must decide whether to extend or recreate welfare reform. So far, the bills coming out of Washington lack vision and empathy for the hardships being faced by the hard-working poor in this country. Policy prescriptions continue to pretend there are no political solutions to ending hunger and poverty.

President Bush wants to toughen the already stringent work requirements of the 1996 welfare legislation and allocate $200 million in federal funds, plus $100 million in matching state funds, for marriage incentive programs. That's $300 million that could help families escape poverty-level conditions, by funding childcare, health care, affordable housing, and more education.

It is a national shame that in the U.S., the world's wealthiest nation, approximately 36 million Americans, including 14 million children, go hungry each year. Many millions live without housing, and 43 million people do not have access to medicine and health insurance.(36) Despite the enormous wealth generated in the 1990s, income inequality worsened in the U.S.

We must demand that we as a nation cannot tolerate growing hunger, poverty, and inequality.

It is now time for Americans to stand up with courage and say that welfare reform has failed to help poor families move and stay out of poverty. All individuals, irrespective of their lot in life, should have the fundamental human rights, such as the right to food, housing, health care, and a living wage, to lead a life of dignity.

In the current recession, with rising levels of unemployment and poverty and greater demands placed on charities for food and other emergencies, we need our federal government to take leadership on rebuilding our broken welfare system.

With economic disparity between the rich and poor greater than in any other time in history, it is time now to reframe the debate on ending hunger and poverty in the U.S. There is no greater need than now to heed the famous words of Thomas Jefferson, Widespread poverty and concentrated wealth cannot long endure side by side in a democracy.

America Needs Human Rights!

Join the movement for economic and social human rights in the U.S.! Visit our website at www.foodfirst.org/progs/humanrts/index.html for information on the ICESCR and how to pass a human rights resolution in your city. Or send an email to foodfirst@foodfirst.org, or a letter to the Institute for Food and Development Policy, 638 60th Street, Oakland, CA 94618. Let's raise our voices together to let our policymakers know that America Needs Human Rights Now!

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Welfare Reform: The Failed Anti-Poverty Prescription

Myths Behind Welfare Reform's Success

Welfare Reform Will Lead to Self-Sufficiency

Working Hard, Living in Poverty

Welfare Reform Strengthen Families

Children Are Casualties of Welfare Reform

Welfare Reform Means Jobs for Those Willing to Work

Unemployment Reaching 6 Percent

Caseload Declines = Success of Welfare Reform

Caseload Declines = Diversionary Tactics by Welfare Administrators