Poorest Miss Out On Benefits, Experience More Material Hardship, Since 1996 Welfare Reform, USA

 

From the 17 September 2011 article at Medical News Today

Although the federal government’s 1996 reform of welfare brought some improvements for the nation’s poor, it also may have made extremely poor Americans worse off, new research shows.

The reforms radically changed cash assistance – what most Americans think of as ‘welfare’ – by imposing lifetime limits on the receipt of aid and requiring recipients to work. About the same time, major social policy reforms during the 1990s raised the benefits of work for low-income families.

In the wake of these changes, millions of previous welfare recipients, largely single mothers, entered the workforce. At the same time, welfare has become more difficult to obtain for families at the very bottom, who often have multiple barriers to work. As a result, in the new welfare system, the working poor may be doing better while the deeply poor are doing worse..

..

“This is the first study to use nationally representative survey data to compare the material hardships of deeply poor households with children to other low-income groups of lower-income households with children, before and after the 1990s welfare reforms,” Ybarra writes. The scholars studied data from the Census Bureau’s Survey of Income and Program Participation from 1992 to 2005 to determine how the deeply poor fared compared to the near poor. They found:

• While the amount of public aid received by deeply poor households fell dramatically, it increased substantially for near poor families, particularly through expansions of the Earned Income Tax Credit, a benefit that reduces income taxes for certain people with low or moderate wages.
• Among deeply poor households with children, 48 percent reported in 2005 they did not have enough money to cover most of their essential household expenses, compared with 45 percent in 1992 and 37 percent in 1995.
• In contrast, among near poor households with children, 30 percent reported in 2005 that they had difficulty meeting their household expenses, down from 37.9 percent in 1992.
• Even among deeply poor households, 41 percent of household heads were working in 2005. But this is well below the proportion for near poor households, in which 88 percent of household heads work. This may be because household heads among the deeply poor were more likely to report a work-limiting disability.

Among deeply poor households with children, a rising proportion are surviving on virtually no income – $2 a day or less in any given month, according to a companion study released by Shaefer and Kathryn Edin, professor of public policy and management at Harvard University. In fact they found that 1.46 million households with children fall under this metric, used to measure poverty in developing nations….

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