New Report Sows Confusion About Welfare, Poverty

COMMENTARY

WASHINGTON (WOMENSENEWS)–Ready or not, it’s time to take stock of welfare reform.

The historic 1996 law comes up for reauthorization next year, and the debate over its impact has already begun to heat up. During the coming months, the public will depend on reports from policy organizations to clarify what we know about the 1996 law. Unfortunately, a new policy brief from the Brookings Institution suggests that such reports are not doing all they should to dispel the fog of unwarranted assumptions that surrounds welfare reform.

The Brookings report, “Welfare Reform and Poverty,” is co-authored by Ron Haskins, an influential Republican player in the 1990s welfare debate, and Wendell Primus, a former Clinton appointee who left the administration to protest the 1996 law. The report offers readers an informative survey of poverty trends and policy issues. Unfortunately, it also seems likely to sow confusion as a result of misleading language in its abstract.

The abstract says: “The 1996 welfare reforms that emphasized work and the dramatic increase in work by single mothers that resulted, a hot economy, and increased government benefits that support working families all contributed to the sharp decline in poverty.”

By lumping welfare reform in with other factors that allegedly “all contributed to the sharp decline,” the authors imply that the new welfare policies have, in fact, reduced poverty. Mushy language of this sort also shows up in the body of the report, where we are told, “Child poverty has fallen substantially under the 1996 welfare reforms.”

One could just as easily say that child poverty has declined under the career of the pop group Backstreet Boys, which, like welfare reform, has run from 1996 to the present. The real question is whether there is evidence of cause and effect.

Haskins and Primus never directly ask what effect welfare reform has had on the number of poor people in the United States. If they did, they would surely mention that no one so far has provided even a good guess at welfare reform’s overall impact on poverty.

Thankfully, the number of poor people in the United States has declined since 1993. At present, however, there is no reliable evidence that welfare reform has contributed significantly to this development. We think it remarkable that this lack of evidence is not mentioned even once in the Brookings report.

New welfare policies have helped some families escape poverty, while pushing others in the opposite direction. In the aggregate, are there good reasons to believe that welfare reform has reduced poverty? We have our doubts.

Myth #1: Welfare Reform Has Reduced Poverty by Putting Poor Women to Work

Over the past five years, a lot of poor women have left welfare and added wage-paying employment to the work they do at home. But two points about this fact should be kept in mind:

First, increased work participation owes a lot to tighter labor markets, higher wages, and the Earned Income Tax Credit; welfare reform is only part of the story.

Second, most women who have left welfare for work have not escaped poverty. Increased earnings or not, few of these families are rising above the poverty line.

Myth #2: Welfare Reform Means Notably Higher Income for Poor Single Moms

As the Brookings report helpfully points out, government programs became “much less effective in reducing poverty after 1993”–so much so that increases in earnings for poor single moms have been almost completely offset by losses in welfare benefits.

The report states: “The poorest 40 percent of single-mother families increased their earnings by about $2,300 per family on average between 1995 and 1999. But their disposable income increased on average only $292. … Increased earnings are not translating into greater disposable income because these families are losing most of their cash welfare income and much of their food stamp income as well.”

Unlike the claim about poverty reduction that is prominently displayed in the abstract, this bad news is accompanied by clear evidence. Unfortunately, it is also buried in the middle of the text, where it will receive considerably less attention. Worse yet, the authors understate the problem by ignoring work-related expenses such as child care.

Myth #3: Lower Caseloads Demonstrate Successful Policies, Self-Sufficient Families

Under reform, cash welfare benefits have remained meager. As a result, the only way for reform to reduce poverty would be for it to move women off the rolls and into jobs. The problem is that the more we’ve learned about declining caseloads, the harder it has become to interpret their origins and meaning.

How much of the drop is due to women leaving welfare, and how much to restricted access for families in need? How much is due to policies that encourage and assist women to work outside the home, and how much to policies that simply cut families off the rolls?

At present, we can’t answer these questions with much confidence. In fact, recent analyses suggest that, relative to other factors, welfare policies may have played a surprisingly small role. A recent review by the Urban Institute finds that policy changes have had only meager and inconsistent effects on caseloads.

There is one aspect of reform that has had a relatively clear impact on the welfare rolls: sanction policies that allow administrators in some states to terminate a family’s benefits in response to rule infractions. Between 1997 and 1999, 540,000 families lost their entire check as a result of this policy–and of all the families who have left welfare in recent years, this group is among the poorest.

As the reauthorization debate moves into high gear, we expect to see a lot of vague statements about the positive effects of welfare reform. Given the stakes involved, we think the public deserves clarity in the questions being asked and answers being offered.

Has welfare reform reduced poverty in America? We know of no reliable research that would lead us to answer this question with a “yes.”

Joe Soss is associate professor of government at American University. Sanford Schram is visiting professor of social work and social research at Bryn Mawr College.