The Next Welfare Reform
"Reforming Welfare Reform" by Jared Bernstein and Mark Greenberg, in The American Prospect (Jan. 1–15, 2001), 5 Broad St., Boston, Mass. 02109–2901.
When welfare reform turned from buzzword into law in 1996, many liberals feared the worst: that one million children would be pushed into poverty, and 11 million families made worse off than before. So far, those fears haven’t been realized. Yet many of the affected families are not really better off today, contend Bernstein, an economist at the Economic Policy Institute, and Greenberg, a senior staff attorney at the Center for Law and Social Policy.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 transformed welfare from a federal entitlement into a program of fixed block grants, with the states given much more discretion over spending. The law (antedated by some state-level reforms) accelerated a decrease in welfare caseloads that had begun in 1994. In that year, the number of American families getting aid was five million; by the end of 1999, it was 2.4 million. Meanwhile, the employment rate for lowincome single mothers rose from 39 percent to 55 percent.
While a majority of former welfare recipients are employed at any given moment, "for many the connection to the labor market is quite tenuous," Bernstein and Greenberg say. Only about 40 percent work consistently throughout the year, according to recent studies, and the wages they earn are very low, averaging around $6-8 an hour. Nationwide, about 40 percent of former welfare recipients "are not working and have very high poverty rates." Working or not, many former recipients report having experienced some hardships since leaving welfare.
Yet "state studies consistently find that roughly half of those surveyed report that life is better . . . and that if they could choose to go back on welfare, they would not want to do so," write Bernstein and Greenberg. These mothers seem to have "a sense of hope for the future that was absent in the past." Low-wage workers made significant earnings gains during the 1990s, thanks to the tight labor market, a hike in the minimum wage, and the expansion of the federal Earned Income Tax Credit.
That does not mean welfare reform should be regarded as an unqualified success, say the authors. "There’s more work but not much more disposable income, especially after...the expenses associated with work." Many poor families that leave welfare fail to obtain food stamps or Medicaid because of "administrative mistakes, lack of information, [or their desire] to leave stigmatized systems that treat them badly." Most mothers who’ve gone from welfare to work do not receive child care subsidies.
"For the families who haven’t been able to break into the labor market," write Bernstein and Greenberg, "the tattered safety net is providing less help than ever. Furthermore, the [new Temporary Assistance for Needy Families] program, which has been greatly supported by the strong economy, is not prepared for the next recession."
Bernstein and Greenberg urge Congress to shift the 1996 law’s focus when it comes up for renewal next year. "In 1996 Congress emphasized the need to cut welfare caseloads and states responded impressively." The states should next be challenged, and given sufficient resources, to meet "a national goal of reducing, and ultimately eliminating, child and family poverty."