The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) -- more commonly referred to as "welfare reform" -- radically changed federal policies for assisting needy individuals and families throughout the United States. Most media coverage in the years immediately following its implementation hailed welfare reform as a success based on the reduction of government costs and because the policy appeared to reform the highly unpopular earlier program, Aid to Families with Dependent Children (AFDC). But there is growing evidence that the neediest families are falling through the cracks under the new regime, especially in this weak economy. A recent New York Times article, "Safety Net is Fraying for the Very Poor," described a new study by the Center on Budget and Policy Priorities that has found that public assistance programs have provided less help to the most desperately poor since the mid-1990s, even before the current recession. The most desperately poor are mainly non-working families with children, most of which are headed by single mothers with limited education and few marketable skills.
Part of the problem with welfare reform was that it was based on false premises: lawmakers at the time were focused on what they saw as the moral failures of the poor, rather than on assisting them out of poverty. The PRWORA was premised on the idea that if poor single mothers worked outside the home, and if poor women would get married before having children and stay married after, then there would be no poverty. Never mind that someone working a full-time job 50 weeks a year earning the soon-to-be minimum wage ($7.25/hour, as of July 24, 2009) earns less than the poverty threshold for one adult and one dependent child, or the fact that the women who become poor single mothers tend to couple with men who lack marketable skills and stable full-time employment. Welfare reform envisioned two primary options for women to leave welfare: leaving welfare through employment (which Sharon Hays called the "Work Plan" in her 2003 book, Flat Broke with Children: Women in the Age of Welfare Reform), and leaving welfare through marriage (which Hays called the "Family Plan").
In promoting these strategies for exiting welfare, policy-makers seemed to assume that marriage and paid employment would offer similar economic benefits to poor single mothers who rely on public assistance as they do to women who are not in poverty. Researchers who study poor families and welfare have contested this assumption, arguing that the employment and marriage prospects that are available to low-income women offer much smaller economic benefits than those available to women who are not poor. With a graduate student, Katrina Running, I have used the Survey of Program Dynamics, Third Longitudinal File, to test the differential effects of paid employment and marriage on the economic well-being of women who have received public assistance versus those who have not. The data was designed for longitudinal analyses of the effects of welfare reform on individuals, families, and households. We examined the impact of marriage and employment (hours worked in the last week and weeks worked in the last year) on women's household income as a percent of the federal poverty line, adjusted for family size. Marriage and paid work both increased the household economic well-being of women who received welfare at some point in time far less than they increased the relative incomes of women who did not collect welfare during the survey period. The relative increase associated with marriage was about half as large for women who were needy. The relative increase in economic well-being associated with full-time work was also half as large for women who needed public assistance. It is clear that law-makers based their theories about how to improve the economic well-being of single mothers with dependent children on the experiences of middle-class families. Rather than increasing the range of choices for women on welfare, welfare reform has pushed many poor women into the workforce without improving their opportunities to rise out of poverty.
Time limits in the PRWORA also mean that some of the poorest families are not eligible for any cash assistance at all, even as their already narrow job opportunities have shrunk even further. The data in the Survey of Program Dynamics encompass the strong economy of the 1990s and end in 2001, so imagine how much less effective the Work Plan and the Family Plan are now. As a result of the 1996 welfare reform policy, when this recession began in late 2007, the social safety net was already weakened for the poorest families in America. It was weakened for ideological reasons, and under assumptions about work and family structure that are demonstrably false.