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Welfare Reform’s Payoff

eye on the news

Welfare Reform’s Payoff

New data from the Census Bureau shows that female-headed households are lifting themselves out of poverty through work. September 11, 2019
Economy, finance, and budgets
Politics and law

On Tuesday, the Census Bureau released its report on the nation’s income, poverty, and health-insurance coverage for 2018. News that the percentage of Americans with insurance took a troubling stumble—the largest since the passage of the Affordable Care Act in 2010—was the angle that most interested frontpage editors. But one other tree in the Census forest of graphs and tables should have been an eye-catcher: poverty in single-mother households sank to its lowest rate . . . ever. What’s more, the decline took place entirely among black and Hispanic single-mother families.

For those plugged in to debates about welfare reform and child poverty over the past 20-plus years, this is a “Wow!” moment. In 2018, median income for households headed by women with “no spouse present” increased by a robust 5.8 percent. The poverty rates for female-householder black families dropped 2.7 percentage points, while the rate for Hispanic families plunged 4 percentage points, to 31.1 percent, in 2018. For blacks in female-householder families, the proportion with family incomes less than $25,000 decreased by 4.1 percentage points, while for Hispanics in female-householder families, the proportion dropped by 3 points.

More black and Hispanic women have jobs and are working more hours. “The rise in full-time, year-round work led to an increase in incomes and earnings at the household level,” the Census Bureau found. Better yet, the growing number of hours worked by single mothers led to a decline in child poverty of 2.5 percentage points. That comes out to 649,000 fewer poor American children. And while white and black child-poverty rates remained stable, the percentage of Hispanic kids living in poverty dropped 7.1 percentage points in one year.

A strong Trump-era labor market is one part of this story, but so is the 1996 welfare-reform law. Remember that the Clinton-period law overturned Aid to Families with Dependent Children, which had entitled poor single mothers to cash benefits. As a result, unemployment among the growing number of single mothers was high. Essentially, welfare reform said no more free lunch, instituting work requirements and replacing open-ended AFDC with a time-limited grant to poor mothers (TANF, or Temporary Assistance to Needy Families). The idea was to promote self-sufficiency among a group depending almost entirely on government funds instead of a job to feed and house their families, to integrate a subculture of isolated outsiders into the mainstream of clocking in and meeting obligations to colleagues and bosses, and to discipline what appeared to be disordered and neglectful households. 

From today’s vantage point, it’s easy to forget that welfare reform led to a dramatic decrease in welfare rolls, more single mothers in the workplace, and a decline in poverty rates among single-parent families. As time passed, progress seemed to stall; both the public and policymakers lost interest. The Great Recession undid whatever advances had been made, and disillusion with the work-and-save Protestant ethic set in. By the 2016 election, welfare reform was policy non grata; Hillary Clinton avoided it during her presidential run, though her husband had signed the bill during his own reelection campaign. A new generation of voters, scarred by the Great Recession and perhaps by ill-informed teachers, were cynical. These days, left-leaning younger Americans consider welfare reform a failure or even a disaster, convinced that all of the reforms of the 1990s—from policing to charter schools—prove once and for all the racism and elite self-interest behind “neoliberalism.” It’s a sure thing that none of the Democratic presidential candidates will be flirting with welfare reform anytime soon.

If we lived in rational times, the new census numbers would at least challenge these convictions. It looks as if full-time, year-round work can reduce poverty and that, racism or no, poor minority women can improve their lives and the lives of their children through nine-to-five labor. Any “welfare-reform-is-a-failure” narrative should collapse under the weight of such demonstrated facts.

But it probably won’t. Not only are Americans in no mood to come out of their ideological bunkers, but there’s also plenty to remind us that welfare realities reflect other macroeconomic and social trends. Though rising a bit, wages at the bottom of the economic ladder remain low enough to keep earners dependent on government through transfer programs like the earned-income tax credit, food stamps, federal supplemental security income, and housing subsidies. Single-mother families are still much worse off than other households, a fact that basic math suggests won’t change. Given that a disproportionate number of those single-mother households are black, that means racial inequality will continue to be a nagging problem. 

The new data confirm the hypothesis that work is a crucial factor to lifting people out of poverty, and as importantly, to breaking the mindset of dependency that mires people in intergenerational poverty. Continued success depends on a healthy economy, because the poor suffer most during downturns. But we should all rejoice in the progress being made in uplifting these female-headed families.

Photo: PhotoInc/iStock

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