Welfare reform has depressed the income of some of the nation's poorest families in recent years despite a robust U.S. economy, according to a new study.
The report released yesterday cautioned against "pronouncing welfare reform an unqualified success" even though there have been dramatic declines in the welfare rolls and an overall increase in employment and earnings among poor families. It concluded that "too much emphasis has been placed on caseload reduction and insufficient attention paid to income and poverty outcomes."
One of the main problems, many analysts have said, is that some families eligible for food stamps are not getting them after they leave the welfare rolls, although it is not clear why. In 1995, 88 percent of poor children received food stamps, compared with 70 percent last year.
"I think we need a midcourse correction," said Wendell Primus, lead author of the study, which he called the most comprehensive look to date at family income and child poverty under the reforms. A former official in the Department of Health and Human Services, Primus resigned to protest President Clinton's signing of the welfare bill three years ago today.
The study was released by the Center on Budget and Policy Priorities, a nonpartisan research and policy institute. It found that the average earnings and overall incomes of low-income families with children headed by females rose substantially between 1993 and 1995, as the economy expanded. But from 1995 to 1997, despite continued economic growth, the average incomes of the poorest 20 percent of female-headed families fell. This occurred as welfare system changes took effect on a large scale because of changes in state rules and enactment of the 1996 federal welfare law. The center based its analysis on census and caseload data.
The income of the poorest 20 percent of female-headed families--a group that includes two million families and six million people--fell an average of $580 per family between 1995 and 1997, the center found. The study included in the definition of income food stamps, housing subsidies, the Earned Income Tax Credit and similar benefits. Still, including those benefits, those families had incomes below three-quarters of the poverty line.
While the number of poor children has fallen throughout the period studied, the decline was much bigger between 1993 and 1995, when 2.4 million children left poverty, than between 1995 and 1997, when poor children declined by 360,000.
Among the poorest 10 percent of female-headed families with children, income fell an average of $810 between 1995 and 1997. That decline, which represented about one-seventh of their income, wiped out the gains these families had secured in the previous two years.
These developments were caused largely by sharp reductions in means-tested government cash and food assistance provided to the families, according to the study. For example, between 1995 and 1997, the number of people living in poverty fell 3 percent, while the number receiving food stamps dropped 17 percent.
"It is disturbing," Primus said, "that substantial numbers of children and families are sinking more deeply into poverty when we have the strongest economy in decades and when substantial amounts of funds provided to states to assist these families are going unused."
A report from the House Ways and Means Committee, which oversaw the reforms, and testimony from administration officials earlier this year, acknowledged that the poorest families are losing ground. And experts across the spectrum appear to agree that the least capable people may need more help after they leave the welfare rolls.
"In the old days . . . [t]hey just stayed on welfare forever," Ron Haskins, staff director for the committee's welfare panel, told the Associated Press. "Now, even to stay on welfare you need a certain level of competence. There are things you must do. If not, they cut your benefits."
President Clinton expressed a similar concern earlier this month.
Although he said the administration does not know why the food stamp rolls are declining, some experts suggest families simply do not know they remain eligible after they leave welfare. And, Primus said, in some cases, states make compliance difficult for a working mother who may have trouble with transportation or scheduling.