[On this, its 10th anniversary]
You Call This Reform?
By Randy Albelda and Heather Boushey, TomPaine.com Posted on August 24, 2006, Printed on August 24, 2006 http://www.alternet.org/story/40732/
This week marks the 10th anniversary of the Personal Responsibility
and Work Opportunity Reconciliation Act -- commonly known as "welfare
reform." The much hailed legislation abolished a cornerstone of the
New Deal known as the Aid to Families with Dependent Children program
which was criticized for discouraging work. But 10 years later, we
know that the program Congress put in its place -- Temporary
Assistance to Needy Families -- encouraged work, but many remain in
poverty and struggle to make ends meet.
Since welfare reform was passed, poor women have moved into jobs in
record numbers. In 1996, more than half (54 percent) of low-income
mothers with children under 6 years old were in the labor force. By
2002, that share jumped to over two-thirds (67 percent).
But, the workplace has not adapted to the needs of the millions of new
working single mothers. Studies of people leaving welfare consistently
find that the wages of those leaving welfare average between $7 and $8
per hour , which are above the minimum wage but leave families close
to or even below the poverty threshold. Further, most people found
jobs that do not offer the kinds of benefits middle- and upper-class
workers take for granted. Only about half of those leaving welfare
report having employer-sponsored health insurance and no more than
half had paid sick leave or pension coverage. Most do not have access
to paid maternity/paternity or family leave and many do not even have
access to unpaid leave.
In short, welfare reform was effective in getting more mothers to
work, but not at making jobs work for low-wage mothers.
And, don't be fooled by the higher employment numbers into thinking
that welfare reform eliminated poverty. Around the time of welfare
reform's passage, Congress increased some of the benefits of working
-- raising the minimum wage and expanding the Earned Income Tax Credit
in 1996, and creating the Child Health Insurance Program in 1997. Yet
it has not significantly expanded benefits in recent years. Rather, as
states struggled to balance their budgets in the early 2000s, many
work-support programs have been cut. Meanwhile, the real value of the
minimum wage is lower today than it was when welfare reform passed,
and so far Congress has resisted raising it at every turn.
Welfare recipients are virtually all single-parent families and they
now face the same problems faced by millions of low-income working
families: not enough time and not enough income. For working parents,
gainful employment requires not only a good job, but also reliable
child care. While the wages of most parents leaving welfare are
relatively low, child care costs remain high -- more expensive than
attending the state university in most states -- and subsidized slots
continue to be elusive.
For many families, moving to work has meant become "working poor,"
rather than "welfare poor." Work supports are available for some
low-income workers, but evidence indicates that the percentage of
eligible families receiving food stamps, earned income tax credits,
housing assistance or child care vouchers is quite small relative to
the need. Those lucky enough to access work supports find that they
often phase out too rapidly, as each rise in income reduces benefit
levels. Thus, employment creates the "running in place" dilemma: Every
additional dollar earned means close to a dollar lost in benefits.
And, those finding jobs are the lucky ones. While the poverty rate has
fallen dramatically since 1996, welfare caseloads have fallen even
more. Between 1996 and 2004 , the poverty rate for single mothers fell
from 42 to 36 percent, a 14.3 percent decline, but the percentage of
families using welfare fell by close to 60 percent, meaning that far
fewer poor families are being served by welfare. Families who face
enormous barriers to employment still need cash assistance, especially
when family circumstances preclude a single parent from holding any
job or a full-time job.
Nobody liked the old welfare system. It provided disincentives to
employment, treated people poorly, and didn't provide enough income to
support a family.
But, the current system isn't working very well, either. Too many
families struggle too hard in a country that has enormous wealth. Ten
years later, many low-income working families are wondering when we
will insist that work should work for families -- that jobs pay enough
to afford the basics, that they come with health care and access to
paid sick leave, and that every parent has access to safe, affordable
and enriching child care for their children while they're at work.
Randy Albelda is a professor of economics at the University of
Massachusetts Boston. Heather Boushey is a senior economist at the
Center for Economic and Policy Research.
© 2006 Independent Media Institute. All rights reserved. View this story online at: http://www.alternet.org/story/40732/