What Welfare Reform Has Wrought

By Randy Albelda

This article is from the January/February 1999 issue of Dollars and Sense: The Magazine of Economic Justice available at http://www.dollarsandsense.org

This article is from the January/February 1999 issue of Dollars & Sense magazine.

issue 221 cover

"Ending welfare as we know it" was just a campaign slogan for Bill Clinton in 1992, but its human effects are now being felt. Consider "Fern," a single mother in Connecticut with children ages twelve, five, and four. Under the old welfare law, Fern was attending school almost full-time, trying to get a B.A., and getting by on welfare, food stamps, and child care assistance. But under welfare reform, as of November 1997 Fern had to quit school or risk being "sanctioned" and losing her food stamps and child care, reports the Welfare and Human Rights Monitoring Project of the Unitarian Universalist Service Committee (UUSC).

A California woman named "Joyce," whose children are ages one and three, told the UUSC: "I took a terrible job because my [social] worker told me if I didn't he would cut me off benefits. I have been sexually harassed at this job and I told the worker about this. I told him I could not keep dealing with this kind of thing. He said it was my decision. I could quit and lose my benefits or keep the job."

Those wondering why the public assistance rolls have dropped drastically over the last five years should talk to Fern and Joyce before celebrating the success of state and federal welfare reform. Congress and Clinton abolished the welfare program AFDC (Aid to Families with Dependent Children) in August 1996 and replaced it with TANF (Temporary Aid to Needy Families), which requires people receiving assistance to find employment or be placed in unpaid jobs for 20 hours a week or more as quickly as possible. Long term training and education are discouraged and in some states are virtually prohibited. Over 80% of the states also reformed their systems over the last decade and many have stricter requirements than those imposed by TANF.

Families are sanctioned—meaning they lose all or part of their assistance—if they do not comply with welfare rules, which are plentiful. And, perhaps most important, TANF caps a parent's assistance at five years during their lifetime. All but three states have set their own time limits, ranging from as little as 21 months to the 60 month federal limit.

Research on the effects of welfare reform suggest that its main effect so far has been to increase the ranks of the working poor. And as bad as that might be, it's actually worse than it sounds. That's because the new working poor are mostly single mothers, laboring at paid jobs for large chunks of the day, while also raising young children. This brings a whole new meaning to the tradeoff between paid work and caring for one's family.

Prior to TANF, when any state changed its welfare provisions, the state was required by law to evaluate the impact. The resulting studies provided little, if any, evidence that the new emphasis on work by the feds and most states will alleviate poverty or the need for welfare. This helps explain why the 1996 law focuses on time limits—since "reform" cannot eliminate the need for welfare, the only way to keep people from returning to the rolls is to ban them from receiving assistance.

Researchers found that short-term employment programs caused women to leave welfare quicker, but they returned at the same rates as before, and increased their earnings only slightly compared to women who also received welfare but did not participate in work requirements. Women who engaged in longer-term education and employment programs earned more, for more time, than those in the traditional welfare program. They tended to stay on welfare longer (since their education and training took longer), but had slightly lower return rates.

TANF: Less Welfare, Just as Much Poverty

With the passage of TANF, poverty researchers and liberal foundations got very nervous. Few had anticipated such sweeping reforms, and the law did not require evaluations of the new welfare rules. As a result, foundations, independent researchers, university and policy centers, and states have launched a whole host of welfare-related research. While many of the findings have not yet been published, the results are beginning to paint a clear picture.

In February 1998, the National Conference of State Legislatures (NCSL) summarized the results of studies completed in nine states that look at people who have left the welfare roles. Some people leave because they are sanctioned, some because they earn too much and are no longer eligible, and others because they no longer want to receive assistance. The NCSL concluded that while most former recipients are finding employment, most are not earning enough to bring their families out of poverty.

One study, in South Carolina, surveyed more than 500 adult former welfare recipients. Three out of every five were employed, working an average of 34 hours a week, and making $6.34 an hour. Of those not working, 20% said they couldn't find a job, another 17% reported lack of child care, 15% had an injury or illness, and 12% lacked transportation. Perhaps it was a great victory for reform that 60% of welfare moms had found jobs?

Not really, because their lives had, if anything, gotten worse. When asked about providing for their families while off welfare versus on it, 50% said they currently were behind in paying their rent or utilities—versus 39% when they were on welfare; 14% now could not pay for medical care versus 3% while on welfare; and 16% said they now had periods without enough money to buy food, versus 7% while on welfare.

A forthcoming report by Sharon Parrott for the Center on Budget and Policy Priorities summarizes studies of former welfare recipients in 12 states. Analyses in Indiana, Maryland, South Carolina, Ohio, and Wisconsin found that between one-half and two-thirds of parents were employed soon after leaving the welfare rolls, regardless of why they left. In Florida, Indiana, Minnesota, Oregon, and Washington state, researchers found that most former recipients are nearly fully engaged in the paid labor force and work 30 hours or more a week when they are employed.

Below-Poverty Wages

Those who argue that welfare reform is a success point to the large number of mothers who now have paid jobs. What they don't like to tell us is that mothers and their children are still poor. In Pensacola, Florida, for example, three-quarters of former and current recipients with earnings made less than $7.00 an hour; the average wage for city dwellers who had been on welfare for many years in Minnesota was $6.55 an hour; recipients who found jobs averaged $7.34 an hour in Portland, Oregon; and former working recipients averaged $6.44 in South Carolina. Not nearly enough to support a family.

When researchers looked at total earnings received over several months (rather than their hourly wages), they found that most fell well below the poverty level. In Milwaukee, 75% of former recipients had earnings below the poverty line. In Maryland, the average earnings amounted to $9,500 a year. Researchers in Delaware, Minnesota, and Oregon, and in the cities of Los Angeles and Pensacola, Florida found that the earnings of current participants in states' work demonstration programs averaged two-thirds of the official poverty line.

These earnings levels come as no surprise when you look at the kinds of jobs recipients find. More than one-third of former recipients in Maryland were working in wholesale or retail trade. Almost half of those in South Carolina were in service occupations, mostly at food preparation, temp work, or in hotels and motels. Close to one-third of the employed former recipients in Milwaukee found jobs through temp agencies.

And there is no such thing as "family-friendly" policies at the workplaces of recipients who are supporting their families. In the four states that researchers checked, only 40% to 60% of employers offered health insurance. Two of the studies asked about vacation time and sick leave policies: only about one-third of employees were eligible for sick days and less than half received paid vacation time. A sick kid can often translate into a missed day of work and lower earnings, and several sick days can often result in losing a job.

Note that the findings reported here are only for those who did find jobs. Over one-third of women who leave welfare are not showing up in employment records, and much less is known about them. Many have moved out of the state which was conducting the study. Many others may have found a partner or moved in with family members or a boyfriend—situations that could be dangerous or undesirable. And while food pantries and homeless shelters are reporting increased use, we don't yet know how many women and their children are subsisting in horrible conditions, without adequate food, shelter, clothing, or medical care.

Resources: "Is It Reform? The 1998 Report of the Welfare and Human Rights Monitoring Project," May 1998, Unitarian Universalist Service Committee, Cambridge, MA; "Tracking Recipients After They Leave Welfare," National Conference of State Legislatures, February 1998, available on the web at: www.welfareinfo.org; "Welfare Recipients Who Find Jobs: What Do We Know About Their Employment and Earnings?," Sharon Parrott, forthcoming from the Center on Budget and Policy Priorities.
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