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Steven Malanga
The Road Out of Poverty
Welfare reform has lowered New York’s poverty rate, but rising illegitimacy threatens these gains.
12 September 2007

The latest income and poverty statistics for New York City, released in late August by the U.S. Census Bureau, provide a glimpse of what happens when government policy works as intended. More than a decade after the city initiated welfare reform—requiring able-bodied recipients to work and putting time limits on welfare—the poverty rate in the city continues to decline, especially among households headed by women. The reason is clear: the reform, begun during the Giuliani years and carried through effectively by the Bloomberg administration, has resulted in an increase in the number of women who are employed full-time.

The data mark a sharp turnabout from the early 1990s, when New York City faced a welfare crisis. Some 1.1 million residents, nearly one-seventh of the city’s population, were on welfare, and the city was projecting that the number could climb as high as 1.6 million. But Mayor Rudy Giuliani, understanding that work was the way out of poverty, crafted reforms that focused on getting recipients back into the workforce. The federal welfare legislation that Congress passed in 1996 gave states and cities more latitude to use programs that emphasized work, making the city’s job easier. Welfare rolls shrank to about 500,000 by the end of Giuliani’s term. Mayor Michael Bloomberg continued this emphasis on getting recipients into jobs, making further progress. Since Bloomberg took office, welfare rolls have fallen below 365,000, an accomplishment that even optimists would never have imagined. Meanwhile, since 1999, when the effects of welfare reform really began to kick in, the number of women employed full-time in the city has increased by 27 percent. The increase in full-time employment is significant because it represents the road out of poverty: only 3.4 percent of adults working full-time in the city are in poverty.

As these numbers would suggest, a significant drop in poverty among families has accompanied the welfare decline, especially among female-headed households, which constitute nearly two-thirds of the impoverished both in New York and nationally. In the early 1990s, before the reform efforts began, more than 35 percent of all female-headed households in the city lived below the poverty line. That number is now down to about 30 percent after years of steady decline. While that’s still high, the 5-percentage-point drop effectively means that nearly 27,000 fewer female-headed households are in poverty in the city. That decline is behind a larger drop: the city’s percentage of families living in poverty has fallen from 18.5 percent in 2000 to 16.3 percent. Hard economic times, especially the recession that followed 9/11, have occasionally slowed this progress, but it has never really stopped; the long-term trend is now unmistakable.

The decline is also a reminder that poverty over the last 25 years has often been a function of social and cultural changes—above all, an increase in single-parent households—rather than of economic shortcomings. Though Gotham’s economy didn’t rebound as strongly or as quickly after 9/11 as the nation’s did, the city has made comparable progress reducing family-centered poverty over that period—a testament to the city’s welfare-to-work policies.

Even as poverty rates decline here and nationwide, however, cultural trends threaten to pull us back in the other direction. New York faces a growing out-of-wedlock birth rate that could upend its families’ economic gains. Today, one-third of all births in New York are to women without husbands, many in no position to keep their kids out of poverty. In fact, nearly half of all out-of-wedlock births in the city are to women who already are impoverished.

Rising out of poverty will be difficult for many of these women: one-third of them have only a high school diploma, while another third don’t have even that. Under such circumstances, succeeding in our economy—which often requires starting in entry-level jobs—while also trying to raise children alone is exceedingly difficult. True, some overcome these obstacles. But many others can’t: 74 percent of New York women heading families still stuck in poverty have a high school education or less.

Of course, there’s another road out of poverty: waiting until marriage to have children. In the vast majority of out-of-wedlock births, if the fathers of the children had married the mothers, dad’s earnings would have kept the family out of the poorhouse. In New York, in fact, only 3.5 percent of married families in which the husband works full-time are poor.

It has taken New York City more than a generation to find the political will to reform welfare, ending its legacy as a program that encourages lifetime dependence. Now the city and the nation face new challenges, as the decline of the traditional family threatens those least able to cope with economic hardship. The next wave of reform must focus on getting men to support the children they father (as Mayor Bloomberg argued in a Washington, D.C. speech last month), discouraging out-of-wedlock births, and—dare any government official undertake this one?—promoting marriage.

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More by Steven Malanga:
Borrowing Trouble
Why the State and Local Pension Problem Will Get Worse
Grassroots Soccer Mania
More . . .
This story was cited in:
New York Sun
Ed Driscoll
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