What happened next remains controversial. Some economists say the policy upheaval reduced overall poverty in the nation, particularly helping single mothers. Others point out that the poorest of the poor, those who can’t work, suffered: People living on $2 a day or less in cash have since increased more than twofold.
A new study highlights a different group that sank slightly as others rose: Young, low-skilled white men.
Lincoln Groves, a fellow at the University of Wisconsin-Madison’s Institute for Research on Poverty, believes this is an unexplored story in the much-discussed aftermath of welfare reform.
Workforce data from 1989 to 2002, he said, show white men with a high school diploma or less, ages 16 to 29, started losing economic ground as single mothers of the same age and educational background made significant gains.
Using econometric modeling, he looked at the change in labor force participation for low-skilled mothers that could be attributed to welfare reform. Then he examined simultaneous shifts in labor force participation for several other groups. The only cohort that exhibited statistically significant changes, he said, were the young, low-skilled white men.
For every 10 percentage-point increase in labor force participation among single mothers, Groves found, the rate for young white men dropped by 3.7 percentage points. That, he said, represents a departure of 150,000 men.
As states adopted the Temporary Assistance for Needy Families program, most single mothers had to find work or enroll in job training to qualify for the new benefits. U.S. welfare caseloads fell by 56.5 percent from 1994 to 2000, and the labor force participation rate for single mothers with young kids jumped from 68 percent to nearly 78 percent.
Meanwhile, in the years after welfare reform, young black men with a high school diploma or less continued to work at roughly the same rate. The same was true for similarly educated young women without children, black and white, and the broader population of older men.
So, why did young white men stumble when others saw improvements or appeared unaffected?
Groves presents a theory: The work mandate under welfare reform led to a surge of new low-skilled workers in the job market, possibly driving down wages in industries where low-skilled men and women competed for jobs. Because white men generally earn higher wages than other groups, Groves theorizes that they would have been quicker to leave the labor market in frustration if wages dropped, "especially if these individuals perceived that they had better-paying options in the informal or black market."
Groves notes that his methodology can't identify the exact cause of labor supply declines for young white men. Men's participation in the labor market has been declining since the 1960s, and economists have pointed to various possible causes: the decline of manufacturing, the loss of union power, the offshoring or mechanization of jobs, and the weakening stigma of unemployment, among others.
Still, Heidi Hartmann, president of the Institute for Women's Policy Research, a Washington think tank, said the welfare policies of the '90s were engineered to support society’s most vulnerable: poor children, who tend to live with their moms.
“The goal was to employ single moms and give those children a better standard of living, and [welfare reform] did that,” Hartmann said. “It did have unintended consequences. All public policies do.”
It’s true that poorly educated men in the United States now struggle to find work that once did not require a college degree. But women still lag behind in terms of pay, labor force attachment and leadership roles.
Unemployed men, Groves responded, are more likely to commit crimes and become incarcerated.
“They’re not sitting in their mother's basement playing Nintendo all the time,” he said. “They have to do something for money, and it’s not always good for society.”
Groves's policy proposal to help low-skilled workers, regardless of race or gender: Expand the Earned Income Tax Credit, which, for now, provides comparatively tiny aid to adults without children.
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