Welfare Reform As We Know It

There is some good news, which has been trumpeted by politicians, and much bad news, about which we have heard far less. Welfare caseloads are still down dramatically, although with the recession they have begun to climb back up. Low-income single mothers are still in the labor market in unprecedented numbers. Poverty is down somewhat, at least through the year 2000. That's the good news.

For the poorest families life actually got worse even before the recession hit. From 1995 to 1999, roughly 2 million families, with average incomes of about $7,500, lost about 8 percent of their income. This happened because they lost more in benefits, both welfare and food stamps, than they gained in earnings from work.

Most of those who are working are far from out of the woods. Their median income is about $7 an hour, and their median hours of work are about forty a week. The earned-income tax credit and other benefits will lift a full-time minimum-wage worker with two children over the poverty line, but the large number of part-time workers and those with larger families don't even get that far (assuming a poverty line of $14,600 for a family of three has any meaning anyway).

Many families face hard choices between work and their children, but low-income families feel this tension most acutely. Obtaining safe and reliable childcare is a major struggle. And low-wage jobs aren't family friendly--you generally can't take time off to care for a sick child. An important new study by Jody Heymann and others at Harvard shows that mothers who receive welfare for more than two years have children with chronic health problems at twice the rate of mothers who have never been on welfare--41 percent versus 21 percent. But poor parents are far less likely than other parents to have benefits at their jobs that help to meet those greater needs. Thus, "work first," the mantra of TANF, often means that work trumps parental responsibilities.

One of the secrets to the "success" of declining welfare rolls, meanwhile, is shrinking eligibility. Immigrants make up about 20 percent of the low-wage work force today, and our economy gains heavily from their labor and the taxes they pay. But even legal immigrants are barred by TANF from receiving federally financed cash assistance for the first five years they are in the country, and eligibility after that is completely up to the states. More than 60 percent of poor children get no welfare help, and the number of ineligible families is going to rise as more people use up their lifetime eligibility with each passing year (in all but a handful of states the lifetime limit is five years, or even less).

Still, eligibility doesn't mean much. The red tape (multiple appointments, complicated forms, interminable waiting, worker rudeness and murky rules) discourages even the most desperate from seeking help. In many states, the official policy is "diversion"--if the applicant looks fit she is told to seek work.

Benefit levels have gone up a little in some states but are below the poverty line everywhere and below half the poverty line in many states. The price of assistance in some places--such as New York City--is to go to a "workfare" program that teaches no skills, provides no help in finding a job, pays no wage (and therefore allows no access to the earned-income tax credit), often denies necessary safety equipment and applies sanctions for the slightest infraction, real or alleged.

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