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Welfare Isn’t Dead

books and culture

Welfare Isn’t Dead

Many eligible and truly needy families don’t apply for TANF, as a new book inadvertently demonstrates. December 7, 2015
Photo by Spencer Platt/Getty Images

$2.00 a Day: Living on Almost Nothing in America, by Kathryn J. Edin and H. Luke Shaefer (Houghton Mifflin Harcourt, 240 pp., $28)

Welfare reform destroyed the social safety net—that’s the thesis of Kathryn J. Edin and H. Luke Shaefer’s $2.00 a Day: Living on Almost Nothing in America. “Welfare is dead,” as the title of the first chapter has it. This phrase turns out to mean not that there literally is no federal welfare program—there is; it’s called Temporary Aid to Needy Families (TANF)—but that the nearly 60 percent decline in the welfare rolls has caused the number of families with a daily cash income of $2 or less per person to more than double, to about 1.5 million households by 2011. The authors conclude that welfare reform, long pointed to by Bill Clinton and conservative Republicans as a policy success because it greatly reduced the number of people on welfare without many apparent ill effects, has in fact been a failure.

The authors present two types of evidence to back up their claim. Working with the Census Bureau’s Survey of Income and Program Participation (SIPP) database, Shaefer produced the estimate of 1.5 million $2-a-day families noted above. Edin, using an ethnographic methodology she developed in earlier publications, provides case histories of eight such families (out of 18 that she followed). The details, needless to say, are grim. No one could read these accounts and not be disturbed that there are still such very poor families in America. Nonetheless, the claim that welfare is dead—or “now nearly moribund” as the authors eventually qualify it—turns out to be quite an exaggeration. In fact, welfare reform looks to be much more successful than the authors paint it.

First, note that the estimate of 1.5 million $2-a-day families looks at only cash income. Food stamps—now rechristened SNAP for marketing purposes—aren’t counted because they are in-kind assistance. When the value of SNAP is counted as income, the number of extremely poor families drops by about half, to around 800,000. This adjustment is entirely appropriate, despite the authors’ demurrals, because very-low-income families do and should spend a large portion of their incomes on food. Counting the cash value of tax credits and housing subsidies, the authors acknowledge, lowers the estimate still further, though we are not told to exactly what number.

The authors acknowledge in passing that the SIPP database may underestimate true household income. Indeed, about 30 percent of TANF and 20 percent of SNAP benefits are not captured by SIPP. Further, calculations of poverty based on consumption data are usually lower than calculations based on income data such as those provided by SIPP. Adjusting for these biases, which the authors don’t do, would likely have reduced the estimated number of $2-a-day families considerably.

Second, close reading of the book’s qualitative evidence raises questions that go unanswered. The family stories that Edin and Shafer present are undoubtedly true. Presumably, however, they were selected from the 18 families that were followed for the purpose of proving the claim that welfare is dead. The poverty of the profiled households is so profound that they are all undoubtedly eligible for welfare—that is, TANF. (Coauthor Shaefer confirmed this in personal correspondence.) Yet, for some reason, none of them are receiving welfare. Why not?

It’s a mystery that gets more mysterious as you read. Jennifer Hernandez is a mom of two young children. We are told that she “rejects the idea of taking ‘handouts,’ even now in her third spell of $2-a-day poverty in as many years and she won’t even apply for welfare.” When Susan Brown, whose family includes a baby, is “[a]sked if she plans to apply for welfare . . . [she] recoils a bit, shaking her head emphatically, as if to say Of course not. When pressed to explain her reluctance, she explains ‘I just don’t want to get rejected again.’” It’s crucial to note that the rejections Brown refers to are job applications, not applications for welfare. In other words, Brown is desperately poor and diligently looking for work but refuses to apply for welfare.

Equally puzzling is the account of Modonna Harris. We are told that when she became unemployed “she managed to submit dozens upon dozens of job applications, pounding the pavement week after week.” Only after she and her daughter ended up in a homeless shelter did a “deeply reluctant” Harris agree to go downtown to apply for welfare. After waiting in line more than an hour—part of the time in the rain—she was told to come back the next day because there were no more open appointments with case workers available. This is an egregious example of bureaucratic ineptitude, but one is surprised when, apparently, Harris doesn’t come back. The reader is left feeling compassion for Harris, but also bewilderment. What is going on here?

It turns out that non-receipt of TANF by eligible households is quite common. In fact, in 2007, only 36 percent of eligible households received TANF benefits, so the families described here are in the majority. Why is the “take-up” rate for TANF so low? There are several possible explanations, but the authors settle on one: plunging welfare rolls made “TANF receipt . . . rare enough among the poor that it has simply faded from view.” But the logic is circular: TANF receipt is so low because eligible families don’t apply when they look around and see . . . TANF receipt is so low.

Other explanations look more plausible. One is what used to be called “bureaucratic disentitlement.” That is, states may deliberately surround welfare applications with yards of red tape in order to frustrate potential applicants and drive welfare rolls down. No doubt such deterrence is at work here. As the authors point out, the federal government gives states TANF money as a block grant with considerable discretion on how to spend it. Thus, if states can drive down the welfare rolls, TANF money can be spent on other, more politically popular, programs.

If bureaucratic obstacles are indeed depressing welfare take-up rates—and they probably are—then the federal government could press states to make applying for TANF somewhat less daunting for those who truly need the help. The authors recommend this approach, but in doing so they undermine their claim that welfare is dead. Welfare is alive; it just isn’t used by the very poor as much as they could be using it.

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