Two decades after welfare reform, more deep poverty and fewer college degrees (rerun)

The Pump Handle is on a holiday break. The following, which was originally published on August 29, is one of our favorite posts from 2016.

by Liz Borkowski, MPH

Two decades ago, President Bill Clinton signed the “Personal Responsibility and Work Opportunity Reconciliation Act” (PRWORA) and heralded the end of “welfare as we know it.” The law lived up to that promise, but the outcomes for families who depend on it have been problematic. "If the goal of welfare reform was to get rid of welfare, we succeeded," the University of Wisconsin’s Timothy Smeeding told Vox’s Dylan Matthews. "If the goal was to get rid of poverty, we failed."

(A bit of background: PRWORA replaced the old Aid to Families with Dependent Children, or AFDC,  with Temporary Assistance to Needy Families, or TANF, which limits federally funded lifetime benefits to a total of five years. The federal government now gives block grants to states and requires them to use the funds for certain kinds of activities, like cash benefits and promoting work preparation, and subject to certain requirements, like mandating that beneficiaries engage in work activities. For more details, check out this Introduction to TANF from the Center on Budget and Policy Priorities.)

Matthews’ in-depth look at PRWORA and its consequences explains that an earlier version of the proposal combined the new five-year limit on benefits with an assurance for each welfare recipient of “a subsidized job if needed, along with child care and transportation assistance and everything else they might need to thrive in the workforce.” Congress soon balked at the cost of such supports, though, and in the economic boom times of the 1990s, a critical mass of legislators might have convinced themselves that welfare recipients would all be able to find jobs that would pay enough to support their families. Several members of Congress and administration appointees strongly opposed the bill, though, and some HHS officials resigned in protest. Many of their concerns have been borne out. Matthews reports that while the overall US poverty rate has declined, deep poverty has increased:

If you try to isolate the effects of welfare reform, it appears that if anything it probably increased deep poverty in the US. The most disturbing evidence in this regard comes courtesy of the University of Michigan's Luke Shaefer and Johns Hopkins's Kathryn Edin, who have documented an increase in the share of Americans living on $2 a day or less in cash income.

Using data from the Survey on Income and Program Participation (SIPP), they found that the share of households with less than $2 per day, per person, shot up from 1996 to 2011, from 1.7 percent of households with children to 4.3 percent. That's a 153 percent increase.

The growth is much smaller if you throw food stamps, tax credits, and housing subsidies into the mix, but it's still an increase of more than 45 percent: from 1.1 percent of households to 1.6 percent. That just underscores Edin and Shaefer's main point, which is that more and more families are being forced to get by without a reliable source of cash income.

And cash matters. You can't pay the rent with food stamps. You can't buy clothing for your children, or refill a subway card, or pay the car bill, or refill your gas tank either. You can't eat housing subsidies (and very few of the poor get them, in any case).

Even for welfare recipients who have the talent and drive to improve their skills and obtain better-paying jobs — which welfare reform ought to help them do — current policies can get in the way. Amanda Freeman reports in The Atlantic on the dilemma many single mothers face when trying to earn a degree: Most states don’t consider college classes to count as “work,” so single parents who return to school can lose access to childcare vouchers and cash benefits. To qualify for PRWORA’s definition of work, programs typically have to last only a year and be vocationally focused. And even in states that allow parents to count college classes as work, caseworkers may discourage beneficiaries from taking this route. This is despite the fact that a college degree is one of the best routes to a job that pays enough to stop relying on various forms of public assistance.

As the Marketplace podcast series “The Uncertain Hour” explains, these limitations on educational programs have meant many welfare recipients end up in short programs for cosmetology or auto repair, even if some of them would be better off in different careers that require more schooling. (The whole seven-part series, which explores various aspects of welfare reform, is well worth a listen.)

This is not to say that welfare as we now know it hasn’t worked as intended for some beneficiaries. But it’s a system that leaves recipients more vulnerable to deep poverty or other poor outcomes if something goes wrong — a layoff during an economic downturn, a serious illness or injury, or a disruption in childcare. In fact, given that welfare is available only to families with children, the shortfall in affordable, high-quality childcare is especially problematic.

Anna W. Jacobs of Vanderbilt University and her colleagues studied employment outcomes and mental distress among more than 2,000 low-income women with children in Boston, Chicago and San Antonio. In a study published recently in Women’s Health Issues (disclosure: I’m the journal’s managing editor), they report that women who gained employment during the course of the study had greater reductions in mental distress than those who didn’t get jobs — except when employed women experienced childcare conflicts. The women who got new jobs but experienced childcare conflict actually experienced worsening mental health over the course of the study. “Policies that focus on moving low-income women off of government assistance and into paid work could be more effective if greater resources were devoted to increasing access to quality child care,” Jacobs and her co-authors conclude.

To read even more about what's happened to US families in the 20 years since President Bill Clinton signed PRWORA into law, check out the Welfare Reform Syllabus at the Anna Julia Cooper Center.

Poverty is terrible for public health. A welfare system that did a better job helping beneficiaries improve their employment situations could mean healthier futures for millions of parents and their children.