When Work is Not Enough...

When Work is Not Enough to End Poverty

by Yvette Moore

It takes more than a paycheck to get out of poverty. That’s a common thread through independent surveys of former welfare recipients since adoption of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 and the Temporary Assistance to Needy Families that came along with it. Welfare caseloads have dropped 31 percent nationally since 1996 for a total decline of 48 percent since states began experimenting with welfare_to_work programs in 1994. That dramatic decrease has been heralded as proof of the success of the welfare-law changes. But research by non_profits and advocates for children and the poor show many families who no longer receive public assistance continue to be mired in poverty and face even deeper hardships.

Much of the tracking of the well_being of families leaving welfare has fallen to concerned non-profit groups. While the new law charged states to create their own welfare programs within federal guidelines, it did not require them to monitor the impact of those programs on families leaving welfare. The legislation did include $200 million in bonuses for states moving the most welfare recipients into jobs, and for those with the highest job retention and earning rates.

Some states have voluntarily surveyed and/or compiled data on leavers, but the information they have chosen to gather, definitions they have used and standards they have opted for vary so drastically that agencies, including the U.S. General Accounting Office, have been unable to compare the results in any conclusive way.

For example, some states set welfare leavers’ employment rates by whether an adult in a family has been employed at any time since leaving welfare, not whether anyone was employed at the time of the survey.

Many of the states did not factor in families who returned to welfare after some period of employment. The percentages of families who had to return to welfare ranged from 19 percent after three months in Maryland to 30 percent after 15 months in Wisconsin, according to a 1999 U.S. General Accounting Office report. Excluding families like these results in higher employment rates, since many former recipients who return to welfare rolls are not employed.

Still, however disjointed, there is some information surfacing about the well-being of families leaving welfare.

Welfare to what?

In a two_part "Welfare to What?" report, The Children’s Defense Fund and the National Coalition for the Homeless examined U.S. Census data, specialized household surveys by state and private researchers, state records and data, and less formal community_based research to find out what’s happening. United Methodist Women-supported Moore Community House in Biloxi, Miss., was a source of community_based information for the study.

Last year The Children’s Defense Fund also released "Families Struggling to Make It in the Workforce: A Post Welfare Report," based on surveys from more than 5,000 families and individuals collected by more than 180 agencies in 65 cities and 16 states that participated in its Community Monitoring Project in 1999.

Many of the reports’ findings are troubling:

Most of the jobs held by adults in families that have left welfare under Temporary Aid to Needy Families pay far below the poverty level. By March 1998, only 8 percent of the previous year’s recipients held jobs paying wages above the three_person poverty line of $13,650.
Many families who leave welfare are losing income or not finding steady work. Nine state studies compiled by the National Governor’s Association and other organizations found 40_50 percent of families who left Temporary Assistance for Needy Families did not have a job at the time of the study.
Extreme poverty is becoming more common for children, particularly those in female_headed and working families. The number of children living in homes with incomes less than half the poverty line grew by 400,000 between 1995 and 1997. That line was $6,401 for a three_person family in 1997.
Many families leaving welfare report struggling to get food, shelter or medical care. A South Carolina study showed one in six former recipients unable to pay for food after leaving welfare, one in four unable to pay housing costs, one in three behind on utility bills and one in 10 without medical care.
Many families are not getting assistance for basic needs such as child care, medical coverage, food and transportation that could help them support their families on low_income jobs, even though they are eligible for these programs. For example, South Carolina reported that 60 percent of former recipients did not know that a parent could get transitional Medicaid.
Many families are denied cash assistance through little or no fault of their own, as states often penalize families without assessing their ability to complete required activities. For example, a Utah study showed sanctioned families loss assistance for one or more reasons 23 percent had no transportation, 18 percent lacked child care, 43 percent had physical health condition that prevented them from working and 20 percent had mental-health issues.

Looking at state studies

Staff of the U.S. House of Representatives Ways and Means Committee reviewed more than 30 state studies on the circumstances of families who have left Temporary Aid to Needy Families (TANF) or its predecessor, Aid to Families With Dependent Children in an October 2000 report. The U.S. General Accounting Office also reviewed and reported on state TANF data in 1999. Highlights of those government assessments include:

The most common reason families leave welfare is that a parent either found a job or was able to work more hours. States that asked found fewer than 5 percent of leavers citing marriage as a factor, although promoting marriage is one of the stated goals of the 1996 welfare law.
Leavers’ employment rates ranged from 50 to 64 percent in the quarter after exits in states using administrative data for their calculations. States using surveys found 35 to 83 percent employment rates for leavers at the time of the surveys.
Some states reported leavers’ average hourly wages ranging from $5.50 to $8.16. These wages are above the federal minimum wage, which has been $5.15 since September 1997, and above the welfare guarantee for the states, but low enough to keep families of three below the poverty level in most states.
Many families that leave welfare for work are not covered by job-related health insurance or Medicaid.
Nine state studies showed 13 to 36 percent of leavers returned to welfare within a year. This count excludes "churners," people who returned within the first two months of departure.

The General Accounting Office also found that many states are requiring more and more welfare recipients to participate in work programs, including some previously exempted because of physical or mental disabilities.

Some states divert people from welfare by requiring them to search for work before they can apply for aid or as soon as the get it. This strategy may have contributed to the large decline in welfare caseloads nationally.

The U.S. General Accounting Office said comprehensive assessment of welfare-law changes and outcomes for families must explore the impact of these practices on families. It also noted that strong economic conditions have facilitated implementation of the welfare law’s work component, but it is not known how state programs will perform under weaker economic conditions.

The U.S. General Accounting Office said much remains unknown about the well_being of former welfare families nationwide.

Sen. Paul Wellstone (D_Minn.) has said it is critical for the federal government to be able to make such assessments if welfare reform is to meet its stated objective of helping people out of poverty. He introduced legislation to require the U.S. Department of Health and Human Services to report annually to Congress information about what has happened to families that have been dropped from the welfare rolls. Under the legislation, states would have had to collect and report data about the effects of welfare changes on poor families and former recipients, including their employment status, wages, health-insurance status and child-care information.

The measure failed.

"If you ask about welfare reform, they say it’s a success," Mr. Wellstone said during a U.S. Senate hearing in January. "If you ask for empirical evidence -- when you ask, ‘Where are these women and children?’ -- there’s no answer. All of us have become guilty of not wanting to look at the data. A lot of time we don’t know what we don’t want to know. It does not suffice to say Temporary Aid to Needy Families is a big success because we cut the welfare roles. What we have to do is reduce poverty."

Mr. Wellstone’s office said recent drops in participants in the food-stamp program suggest that many poor families are not getting services to which they are entitled.

He cited the U.S. General Accounting Office’s report that the average monthly food-stamp participation in April 1999 was 18 million people, representing a decline of 7.5 million since 1996. The office reported children’s participation in the food-stamp program dropped more sharply than the number of children living in poverty, indicating a growing gap between need and assistance.

Some states have directed caseworkers not to inform families leaving Temporary Aid to Needy Families that they may still be eligible for food stamps, Medicaid or child-care assistance unless former recipients inquire about such assistance.

For example, The Children’s Defense Fund report quotes Wisconsin’s W-2 welfare-to-work caseworker manual as saying:

"The new system should provide only as much services as an eligible individual asks for or needs. Many individuals will do better with just a light touch."

A 50-state survey of child-care administrators by Children’s Defense Fund found that two-thirds of the states were not confident that all of the families eligible for child-care subsidy knew they could get it. Nine states said they had no outreach efforts.

A Wellstone Family Nutrition Study provision was added to an agricultural bill adopted last year. It allocates funds to study families who are eligible for food stamps but are not getting them.

Children and welfare

Children are the vast majority of welfare recipients, but the unfortunate truth seems to be that no one knows how the welfare law is impacting them. Anyone seeking to find out how children are faring must play detective and make educated guesses.

Analyzing U.S. Census Bureau data, The Children’s Defense Fund reported an overall decline in the child poverty rate, but an increase in extreme child poverty.

"Extreme poverty –- defined as families receiving income below half the poverty-line amount – is a particularly revealing measure of what is happening to welfare families," said The Children’s Defense Fund report.

Testifying before a U.S. House of Representatives Ways and Means subcommittee in May 1999, U.S. General Accounting Office executive Cynthia M. Fagnoni said early state studies on people leaving welfare provided little information on how children of former welfare recipients are doing relative to key indicators of well-being such as housing, health, education and nutrition.

Compared to what?

A study by the Urban Institute, a nonprofit policy research organization established in Washington, D.C., in 1968, compares the economic well-being of former recipients with that of poor mothers who have not been on welfare in the last two years. Pamela Loprest, senior researcher for the Urban Institute, is author of the study, "How Families That Left Welfare Are Doing: A National Picture." She said few people would call the 1996 welfare law a success if families are leaving welfare simply to join the ranks of the unassisted poor.

The report is based on data from the institute’s 1997 National Survey of American Families, which surveyed a large national sample of poor families. It compares welfare leavers with:

Near-poor families, defined as families with children under 18 and incomes under 150 percent of the poverty level, and
Low-income families, defined as families with children under 18 and incomes under 200 percent of the poverty.

While the report does not reveal how many families leaving welfare are slipping through what’s left of the safety net, it does note that about 20 percent of former recipients are not working, do not have a working spouse and are not relying on government disability benefits. It was not known what they are living on.

The report also notes that about 30 percent of families who left welfare for at least a month from 1995_1997 returned and received benefits in 1997. The author questions what will happen to such families as welfare time limits expire and cash assistance is permanently terminated.

According to the report, women who are former welfare recipients, near poor or low income have many things in common:

Sixty-one percent of leavers worked, compared with 50 percent of near-poor mothers and 54 percent of low-income mothers.
More than 25 percent of former recipients, near-poor and low-income mothers worked mostly at nights, and more than half had difficulty juggling work schedules with child care. A third or less had job-related health insurance, whereas more than half of all workers under 65 have such coverage.
Welfare leavers, near-poor and low-income mothers worked in the same industries with about two-thirds employed in service, sales or clerical/administrative positions, and about three-quarters in service or trade industries.
Former recipients were more likely to use public help other than Temporary Aid to Needy Families than near-poor and low-income mothers.

Ms. Loprest said the focus of public policy should be expanded to poor families generally, rather than specifically directing services only to former welfare recipients, since non-welfare families may also be slipping through the cracks.

Yvette Moore is managing editor of Response.