welfare

Temporary Assistance for Needy Families' logo.
Temporary Assistance for Needy Families’ logo.

As the 1996 Personal Responsibility and Work Opportunities Reconciliation Act marks its twentieth anniversary, researchers are still exploring the impact of this law, called “welfare reform.” Although this law’s Temporary Assistance for Needy Families program helps some groups of poor people, it leaves others without any stable cash support. One group seriously at risk consists of low-income single mothers with children who end up with no incomes from either welfare or paid jobs. Researchers call them “economically disconnected.”

Why Should We Care?

Low-income mothers and children who have have no documented cash income of their own may be eligible for Temporary Assistance to Needy Families, yet many do not get those benefits. This is a cause concern, because families suffer when they have no cash at all. And we can also ask whether these programs are sufficiently accessible to those in most need. Available data show that “take-up rates,” that is, use of benefits, fell to about 30 percent in 2009 for eligible families. In 1990, moreover, studies found that about ten percent of low-income women subsisted without any cash; but the proportion rose to more than 20 percent by 2010.

Such “disconnected mothers” with little or no income are among America’s most economically vulnerable people. They are more likely than other low-income single mothers to live in public housing as opposed to apartments, and they experience severe hardships, sometimes even going without food. Prior studies have identified a number of reasons why certain poor women become so cut off from both work and public cash assistance. Many find it hard to get or keep jobs, because they lack childcare or transportation, or because they have to care for an ill family member. Many of these women also suffer physical and mental health problems that prevent them from working; or they have few opportunities due to limited work experience, learning disabilities, and low levels of educational attainment. more...

Steven Depolo, Flickr Creative Commons
Steven Depolo, Flickr Creative Commons

In early June 2015, the Missouri state legislature voted to remove thousands of families, including 6,400 children, from the state’s cash assistance program for the poor. The new law reduces the state lifetime limit for Temporary Assistance for Needy Families from 60 to 45 months, cuts cash benefits in half for those who do not work, and redirects a significant portion of welfare funds toward programs that encourage marriage and alternatives to abortion.

Why has Missouri made these changes now? Since the U.S. Congress acted in 1996 to change welfare funding rules and give states greater discretion, many states have taken steps similar to Missouri. My research suggests that racial dynamics drive these cutbacks – but not in ways many suppose. Demography and attitudes are insufficient explanations; the political context matters.

Race and Welfare Policymaking

Why have some states imposed welfare restrictions in recent years while others have retained more generous programs? Previous studies reveal a clear pattern: the higher the proportion of African Americans receiving cash welfare benefits, the more likely states are to adopt restrictive welfare policies. But not all racially diverse states have adopted punitive reforms and some predominantly white states have taken very restrictive approaches to welfare. Race clearly influences welfare politics, but how?

To answer this question, I examined the policy decisions that state legislatures made immediately after the 1996 national reforms transformed American anti-poverty policy. That law imposed new time limits, work requirements, and penalties on recipients of welfare benefits. After Congress gave states new flexibility to design their own programs, some states adopted the most generous policies allowed by federal law, while others imposed far more restrictive policies. To understand the decision-making processes better, I closely examined a number of states which had large minority populations at the time.

What I found was surprising: Legislators’ decisions about welfare policy were heavily influenced by the political debates simultaneously raging in their states. When these other debates were rife with racial tensions, legislators enacted punitive welfare reforms. But when coterminous debates were not racialized, lawmakers tended to adopt more generous welfare programs. In other words, lawmakers used restrictive welfare changes as a strategy to appease white voters who felt threatened by other racial conflicts happening in the same period. more...

The Live Below the Line Campaign encourages people around the world to try to live on a poverty-level wage.
The Live Below the Line Campaign encourages people around the world to try to live on a poverty-level wage.

 

Poverty is commonly explained as a matter of joblessness, while work for wages is viewed as a pathway out of poverty and toward upward mobility. Indeed, since the end of open-ended welfare benefits in 1996, U.S. public assistance presumes that creating incentives for poor adults, including mothers, to enter the paid labor force is the best way to reduce poverty and dependence on government. Yet many citizens do not understand that most poor adults already work. In fact, by some accounts the so-called working poor outnumber the non-working poor in the U.S. Effectively reducing poverty therefore requires addressing the problems of those who work yet remain poor. more...

Half a century ago, President Lyndon Johnson launched America’s War on Poverty; yet by the 1980s President Ronald Reagan famously declared that “we waged a war on poverty and poverty won.” To back up this claim, conservatives point to official U.S. statistics showing that the percentage of Americans living in poverty, around 15%, has changed very little over the decades.

But the official poverty measure is outdated – so I teamed up with several colleagues to produce estimates using a more accurate one. When we use the improved measure, it turns out that U.S. social programs and taxes have had a powerful effect on reducing poverty since the mid-1960s. Back then, government programs did little to alleviate poverty, but today public programs and taxes cut the percentage of people living in poverty by almost half, from the 28.7% it would be without government efforts to 16% after public programs are included. Far too many Americans continue to have inadequate incomes, but U.S. policies have helped millions avoid poverty.

The Need for a More Comprehensive Poverty Measure

America’s longstanding official poverty measure is outdated, because it is not adjusted appropriately for the needs of different types of individuals and households and it fails to take into account the full range of income and expenses that individuals and households face. In particular, it does not calculate the income effects of the full range of government programs whose aim it is to reduce poverty in the United States. Because of these and other failings, researchers cannot simply track official poverty measurements if they want an accurate picture of trends in poverty or the role of government policies in alleviating it.

Along with Liana Fox, Irv Garfinkel, Neeraj Kaushal, and Christopher Wimer, I re-analyzed trends in poverty using an improved measure – called the supplemental poverty measure – that includes near-cash benefits, in-kind benefits, and tax credits that go to various individuals and families. This supplemental measure also adjusts income calculations for taxes paid and for unavoidable child care, work-related, and medical expenses.

Since 2009, the U.S. Census Bureau has estimated annual poverty levels using both the traditional and the supplemental poverty measure, but it has not estimated historical trends using the revised measure. My colleagues and I have taken this extra step, estimating trends in poverty since 1967 using two new measures, one similar to the supplemental poverty measure in which the poverty threshold is calculated for each year using contemporary living standards, and another using an “anchored supplemental poverty” measure, in which we take today’s supplemental threshold and carry it back historically. The second approach is the one we use here in this brief. Data on incomes over the years come from the Annual Social and Economic Supplement to the Current Population Survey.

When we use the supplemental poverty measure to track the percentages of Americans under the poverty line, a different picture emerges. The traditional poverty measure says that 14% were poor in 1967 and 15% in 2012, but the anchored supplemental measure shows the percentage living in poverty falling by more than 40%.

A New Perspective on U.S. Anti-Poverty Efforts

Our estimates also provide new insights as to the role of government programs. Using the supplemental measure anchored to 2012, we tracked the percentages of the U.S. population that would have been in poverty with and without including income from taxes and government social benefits. The green line shows poverty without taxes and benefits, and the blue line shows how much poverty has been reduced by taxes and social benefits.

Government benefits include food and nutrition programs such as Food Stamps, school lunches, and programs for pregnant women and infants; cash welfare benefits of various kinds; housing subsidies; and Social Security, unemployment benefits, workers’ compensation, and public pensions. Taxes include both those that reduce income (payroll taxes, federal and state income taxes) and those that boost incomes (like the Earned Income Tax Credit and other tax credits). Clearly, U.S. taxes and benefit programs have greatly reduced the percentage of Americans living below the poverty line. If we only counted incomes and expenses in the private market, poverty would have increased slightly over the past half century. But when taxes and social benefits are included, poverty sharply declines.

These results underline a key point: if we want to properly assess the progress the United States has made in fighting poverty, we must include all income and expenses. Properly measured, poverty has fallen substantially since the War on Poverty was declared. The war is far from over, but hard-won ground has been gained – and millions of Americans would suffer if anti-poverty efforts cease now or suffer major reverses.

Jane Waldfogel carries out research on a range of topics including the measurement of poverty, food insecurity, work-family policies, the effects of the Great Recession on parents and children, and inequality in school readiness and school achievement, both within the United States and across countries.

Is it possible for people to live on $2 a day? This is a question most think applies to bygone centuries or impoverished Third World nations. But it turns out to matter for the 21st century United States as well. The U.S. welfare reform enacted in 1996 ended rights to cash assistance for poor families with children. Instead, welfare in America now gives cash assistance for a limited time only. Able-bodied people who apply for welfare must quickly try to find paid employment and participate in activities directly related to preparing for work. In the new system, extra benefits and tax credits go to low-income people with jobs. But what happens to those who cannot find employment – especially during prolonged periods of joblessness like the aftermath of the recent Great Recession?

To find out, we used data from the U.S. Census Bureau from 1996 to 2011 to study U.S. households with children getting by with a daily income of $2 or less, per person – adapting the poverty indicator used across the globe by the World Bank. more...

In 1996, the United States fundamentally changed the rules of welfare for the very poor. Instead of giving cash benefits to poor mothers, the new Temporary Assistance for Needy Families program emphasized moving recipients quickly into the paid labor force, no matter how low the wages. The federal government gives states funds to support public assistance, but in return for temporary assistance and very limited services, clients must prove they are completing work activities and looking for employment. The new approach assumes that poor people mismanage their lives and need to develop greater self-discipline to become self-sufficient. Front-line administrators set clear behavioral expectations, monitor compliance, and use incentives to encourage compliance. When rules and incentives do not work, case-workers must apply penalties – up to and including the termination of aid altogether.

Today as in the past a high proportion of welfare clients come from racial minorities. In the tough new U.S. system, how do front-line welfare administrators decide which clients should be sanctioned for misbehavior? My colleagues and I have done research to nail down the answers. more...

Half a century ago, President Lyndon Johnson launched America’s War on Poverty; yet by the 1980s President Ronald Reagan famously declared that “we waged a war on poverty and poverty won.” To back up this claim, conservatives point to official U.S. statistics showing that the percentage of Americans living in poverty, around 15%, has changed very little over the decades.

But the official poverty measure is outdated – so I teamed up with several colleagues to produce estimates using a more accurate one. When we use the improved measure, it turns out that U.S. social programs and taxes have had a powerful effect on reducing poverty since the mid-1960s. Back then, government programs did little to alleviate poverty, but today public programs and taxes cut the percentage of people living in poverty by almost half, from the 28.7% it would be without government efforts to 16% after public programs are included. Far too many Americans continue to have inadequate incomes, but U.S. policies have helped millions avoid poverty. more...

Across America, a growing number of state welfare agencies are using the Internet to communicate with current clients and people who need to apply for benefits. Some websites simply offer information, but others include complex tools meant to tell applicants if they are eligible for various kinds of benefits and let people submit applications.

Welfare administrators like the movement toward online applications, but what do low-income people think? My research takes a close look at the perspectives of clients and potential clients for today’s version of welfare, Temporary Assistance for Needy Families. more...

In recent years there has been a flurry of legislative activity to exclude immigrants from access to social-welfare assistance at the state and national level. These efforts are controversial, with opponents denouncing them as “unprecedented,” while supporters claim that today’s newcomers are less self-sufficient than earlier generations of immigrants. “Our ancestors,” declared one Republican official, did not come “with their hands out for welfare checks.” Most Americans agree that European immigrants “worked their way up without special favors,” and are inclined to think that everyone today should do the same.

What is the truth about access to U.S. public assistance by different groups? To sort out the myths and realities, I closely tracked the experiences of white European immigrants, blacks, and Mexicans in the first half of the 20th century. My findings will surprise many on all sides. more...

“Welfare” as it now exists in the United States aims to provide a short-term safety net for very needy families with children and prepare adults to get jobs. The Temporary Assistance for Needy Families law passed by Congress in 1996 said that cash assistance should be limited to no more than five years (sixty months) over a lifetime. But states were allowed some flexibility to extend this limit for up to one-fifth of their welfare recipients who face unusual problems.

Until last year, the state of Maine took advantage of this flexibility to provide extended help to less than 15% of its caseload. Some people could continue to get benefits if they complied with all welfare rules, including the rule about seeking or preparing for employment. But in 2011, the Maine legislature voted to make the sixty-month limit virtually absolute. Exceptions would be granted only if people were awarded a special hardship extension due to coping with disability, domestic violence, or the need to care for a disabled family member.

When the new law took effect in 2012, more than 2,000 Maine families were affected. About 44% requested hardship extensions, but only a quarter of all people scheduled for termination got the exception. Since January 1, 2012, more than 1,500 Maine families, including 2,700 children have lost cash benefits. Who are these families and what are their circumstances? To answer this question and consider whether welfare has adequate protections for the most vulnerable, I surveyed a sample of 54 Maine families whose benefits were stopped and did some additional in-depth personal interviews to probe people’s experiences more deeply. more...