Remember the warnings about welfare reform being the most brutal act of social policy since Reconstruction? Remember those Dickensian images of starving urchins lying in the gutters? Census data showing a plunge in child poverty after welfare reform became lawfrom 20.8 percent in 1995 to 16.3 percent in 2001should have put paid to the gloomy prophecies. But now we have even more evidence that welfare reform, far from brutalizing poor women and their kids, is improving their lives.
The most compelling new proof comes from a Manhattan Institute study, conducted by CUNY profs June ONeill and the late M. Anne Hill, called Gaining Ground, Moving Up: The Change in the Economic Status of Single Mothers Under Welfare Reform. The study shows that, after welfare reform passed, the poverty levels of single mothers fell precipitously, from 41.9 percent in 1996 to 33.6 percent in 2001. The study also dispels worries about the hardest cases: the poverty rate among single mothers who are black and Hispanic, never married, and high school dropoutshistorically the most entrenched welfare casesfell 17 percentage points between 1996 and 2001.
The reports most original finding, though, may be that poverty drops steadily after single mothers leave the welfare rolls. Using longitudinal data, ONeill and Hill demonstrate that former welfare mothers are much like other workers: the more years they work, they more they earn. Those who left the rolls in 1996, for instance, saw their poverty rate fall 50 percent over the next four years; their hourly pay increased by 2 percent annually in real terms (and another 1 percent a year on top of that if they stayed with the same employer). Only 4 percent of single mothers earned the minimum wage or less. Even among high school dropouts, just 8 percent failed to beat the minimum wage.
Gaining Ground even offers some reason for optimism in the face of the economic slowdown. Yes, the poverty rate for single-mother former welfare recipients increased in the recession year of 2001, the last year the report covers, but only by 1 percent. And high school dropouts continued to gain ground even as the economy sputtered. That former welfare recipients are still doing well in a downturn isnt so surprising, however, when you consider another key ONeill and Hill finding: 44 percent of the increase in work participation over the years studied resulted from welfare reform and only 9 percent from the late-nineties boom.
Gaining Ground follows another report trumpeting good results from welfare reformthis time concerning children. Published in early March in Science and based on interviews with more than 2,000 families in three cities, the study found no evidence that either preschool kids or teens suffer significant psychological ill effects when their mothers move from welfare into the workplace, as some reform critics had predicted. Teens even showed a small decline in their anxiety levels if mom was working instead of on the dole. The study also found that the self-esteem of former welfare mothers who went to work often significantly increased.
In other words, when you work, you make more money, you do well by your kids, and you feel pretty good about it. Now, why was that so hard to predict?