Playing by the Rules and Still Losing Ground

Welfare, at least as we have known it for the last five years, expires on Sept. 30, 2002. The reauthorization process is well under way and will set the direction for social and family policy for the foreseeable future. It seems a suitable time, therefore, to evaluate the 1996 reform—“the first significant conservative welfare policy of the postwar period,” according to Robert Rector, senior research fellow with the Heritage Foundation. How did it do, for example, in terms of reducing poverty? A reasonable question. But not a fair one, according to the supporters of welfare reform.

This is not a fair question because poverty reduction was not a statutory goal of welfare reform. The primary goal was to reduce the number of people dependent on government support in lieu of employment. Many Americans assumed, from the resulting emphasis on self-sufficiency through employment, that wages were the way out of poverty. They were wrong.


Many also still think that poverty reduction should be the benchmark for assessing the reform’s success. In a national survey recently released by the Packard Foundation, 74 percent of respondents said that decreasing the number of families in poverty should be very important in judging welfare reform. “The public agrees,” states the report, “that improving conditions for families and children should be an important part of assessing the success of welfare reform.”

But there is little agreement about the existence of poverty in the United States to begin with, let alone its cause and meaning. The Heritage Foundation, for example, argues that poverty does not exist to the extent believed and claims that it is just the result of how the government processes the numbers. Mr. Rector finds that America’s “poor” suffer from behavioral rather than fiscal deficits. “The culture of the underclass,” he stated in an essay in 2000 titled “Broadening the Reform,” “is marked by a cluster of behavioral pathologies, eroded work ethic, collapse of marriage, indifference to education, drug and alcohol abuse, and pervasive crime.” Offering a different perspective, Network, a national Catholic social justice lobby, notes the following in its own report, Welfare Reform: How Do We Define Success:

The long-term health of the U.S. economic system depends on whether the basic needs of all people in the country are met. Until and unless this nation attends to the needs of people who do not benefit from economic progress, millions of people in the U.S. will continue to live in poverty.

Those who hold the poor-as-pathological view to one degree or another see welfare itself as the problem. They assert that these social pathologies would not exist if it were not for the welfare policies established since Lyndon B. Johnson first declared war on poverty in 1964. They are partially correct.

Welfare as We Knew It

Under the old system, the rules of eligibility barred recipients (usually mothers and children) from working or from marrying an employed male. If a mother did either of these, she lost her welfare check. Period. Working and receiving welfare at the same time was cheating, breaking the law, fraud. Interestingly enough, Mr. Rector’s own studies show that over one-third of welfare fraud under the old system was illegal employment—thereby casting doubt on his view that pathological laziness causes poverty. The general pattern under the old system was for recipients to receive welfare for a few years, leave and then return after a few more years, because they were unable to find a steady economic footing. There was a clear cycle of moving on and off the rolls.

Few would disagree that this system had a degenerative effect on recipients—many argued that opinion throughout its 42-year run. The cause of those effects, however, continues as a matter of debate. Was it because welfare fed the poor’s pathological tendencies, or because the system trapped recipients into life at a subsistence level in the midst of surrounding wealth? Was it the poor who were pathological, or poverty, or the system itself?

Personal, not social, responsibility was the reform cry in 1996 that yielded the Personal Responsibility and Work Opportunity Act of 1996 (P.L. 104-193). The act was based on assumptions of laziness, sloth, malintent and a tendency among the poor to cheat. The poor-as-pathological stance had become public policy. While the surrounding debate acknowledged the prior system’s structural bar to self-sufficiency, it blamed recipients for poverty in the United States. Thus welfare reform, as embodied in the Temporary Aid to Needy Families program (TANF), included severely punitive measures like full-family sanctions (termination of cash assistance because a parent violated a requirement), rigid time limits even if recipients were employed but poor and limits on education and training.

Past welfare restrictions, racism, lack of a livable wage, downsizing, unstable employment, lack of access to equal justice, inadequate health care and housing were not acknowledged as objective causes of poverty. Poverty was seen as a matter of personal pathology, one that responded best to punitive measures. Thus caseload reduction became the goal. In short, having demonized welfare recipients as pathological parasites, the law focused on getting them off our national, tax-paying back. This we have largely accomplished.

Are Children Better Off?

According to Wade Horn, assistant secretary of health and human services, the right question to ask of welfare reform is: “Are children better off?” Mr. Rector, a proponent of a yes response to this question, points out that “the decline in welfare dependence has been greatest among the most disadvantaged and least employable single mothers—the group with the greatest tendency toward long-term dependence.” He sees in this a confirmation that welfare reform affected the entire welfare caseload, not merely the most employable mothers. And one could reasonably conclude that if the children of the most disadvantaged are better off, surely the children of the less disadvantaged are that much more so.

What this logic fails to note is that participation in TANF assistance fell much more rapidly than did poverty, partly because of the states’ use of full-family sanctions. Indeed, it was precisely the group mentioned by Mr. Rector who were the most sanctioned. Significant also is the fact that the majority of people leaving TANF for employment entered low-wage jobs and continue there.

The typical “leaver,” someone previously on TANF, is a single woman with two children. She is working full time at minimum wage and receives $10,300 in wages annually, or $178 per week. The poverty level for a family of three is currently $14,600. The government subsidizes her employer by making up the difference between her wage and a livable wage through food stamps, Medicaid, CHIP (Children’s Health Insurance Program) and other government benefits. One could reasonably wonder why taxpayers are subsidizing business in this manner.

While caseloads fell by roughly 50 percent between 1995 and 2000, the number of children in poverty fell 22 percent. As noted in a study released by the Center for Law and Social Policy in January 2002, “In 1994, 62 percent of poor children were receiving assistance through Aid to Families With Dependent Children; by 1999 only 40 percent of poor children were receiving TANF assistance.” There were not fewer poor children, only fewer of them receiving assistance. There is no essential connection between a family leaving TANF and a family leaving poverty. Many of those least employable mothers mentioned by Rector remain just that, least employable, but now without assistance.

What is the relationship between the drop in caseloads and the goal set out by Mr. Horn? At the moment that is an unanswerable question. It is simply not clear how TANF has affected children. There are, however, studies of pre-TANF programs in states whose welfare reform experiments were later incorporated into the federal model. Two findings are of particular interest in relation to Mr. Horn’s question.

First, TANF’s positive effects depend on improved income, not just increased employment. Without increased income, the academic achievement and behavior of young and adolescent children were negatively affected. TANF programs that led to increased earnings but not increased incomes—because benefit losses offset earnings gains—showed no clear positive effect on children. In other words, increased employment alone is not sufficient to foster healthy development of children. Increased income is the key. Second, red flags were raised by these studies regarding the impact of TANF-type policies on rates of child maltreatment, particularly neglect.

Between 1995 and 1999, the estimated number of children in foster care grew from 483,000 to 568,000, an increase of 85,000. Regarding Mr. Rector’s comment about the most disadvantaged leavers, it is important to note that as more single mothers went to work, there was an increase in child neglect, a pattern concentrated among the most disadvantaged—those with the fewest resources to overcome the combined effect of low-wage work and welfare loss. Studies to date show a trend indicating that TANF grant reductions increased entries into the child welfare system, a phenomenon strongest among families who had been sanctioned. Trends also showed an increased delay in family reunification, because mothers were overwhelmed by the stress of poverty coupled with welfare requirements. Employed mothers who experienced TANF grant reductions were reunified with their children nine times more slowly than other mothers. In short, the loss of benefits combined with low-wage employment appears to increase neglect.

Playing by the Rules and Still Losing Ground

One would not be completely out in left field if one wondered whether the real agenda of the 1996 reform was to create and sustain a pool of low-wage labor. How else can we call the reform a success when 60 percent of employed leavers are living at or below the poverty level—the majority in jobs that do not carry health insurance? In 1999, 59 percent of single mothers in families with incomes below 200 percent of the poverty level were working. And studies that track leavers over longer periods show no significant earnings growth after leaving welfare. In 1999, amid a booming economy, the poorest 700,000 single mothers living only with their children had lower earned income than similar women in 1985, even though their earnings increased. In other words, the lowest-income single mothers had become poorer.

A review of current conservative literature on welfare and its reform shows literally no mention of the term “salary” or its equivalents: “wage,” “fair wage,” “living wage” or “sustainable wage.” It is the missing link in welfare reform, just as poverty reduction was the missing goal. While President Bush’s reauthorization proposal, “Working Toward Independence,” would increase the number of required work hours per week for TANF recipients, it is silent on the issue of a living wage. But to clarify the administration’s concern about wages, Tommy G. Thompson, secretary of health and human services, stated on March 6, 2002: “This administration recognizes that the only way to escape poverty is through work, and that is why we have made work and jobs that will pay at least the minimum wage the centerpiece of the reauthorization proposal....”

“At least the minimum wage,” as we have seen, does not raise a family out of poverty, no matter how hard a mother works.

That same day, The Los Angeles Times reported that President Bush was “moving to allow states to place welfare recipients in jobs that pay less than minimum wage,” as a form of “supervised work experience.” Replacing the term “employment” with that of “supervised work experience” removes the recipient from any minimum-wage requirement and labor protections. And this is the plan for those with the greatest barriers to employment, such as mental, physical or emotional handicaps, care for a disabled or sick family member, child care, lack of transportation and other drawbacks to independence. Yet the Bush proposal does not give states adequate flexibility in terms of counting education and training as work activity, thus lessening the already inadequate attention to these factors needed to obtain a job that pays a living wage.

One escapes poverty by hard work that pays a livable wage. The number of families that have left welfare since 1996 is 2.3 million. But most have yet to leave poverty. Is it not time to turn our attention to making work pay, so that poverty drops as well as the caseloads? When you think about it, the only fair question is, how has the 1996 reform done at reducing poverty?

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