Employment and Poverty Among the Homeless - Welfare Reform And The Poor

In 1996 the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PL 104-193), the most sweeping welfare legislation since the 1960s, ended Aid to Families with Dependent Children (AFDC) and gave the states control over the administration of benefits in the form of Temporary Assistance for Needy Families (TANF) grants. In addition, the law made significant changes to Supplemental Security Income (SSI) and Medicaid.

Returning Local Control

The TANF block grant legislation (the welfare reform initiative) was designed to fulfill two primary objectives:

• To return more control of relief assistance programs to the state governments—this granted the states great flexibility to design whatever mix of services and benefits they thought would reduce dependency and provide for the needy
• To limit the amount of time a person spends on public assistance—specifically, the 1996 law contained a five-year lifetime limit on receipt of federally funded cash assistance and authorized states to impose shorter time limits at their discretion; and required that, by the year 2002, 50% of all recipients who had received cash aid for two years work at least thirty hours a week in order to continue receiving benefits

Many people argued that these were worthy goals. First, they believed local authorities would be better equipped to determine the needs of the people in their area than a distant federal government. Second, they believed the focus on encouraging the poor to work rather than receive public assistance was important because the old system unintentionally discouraged welfare recipients from working, since most welfare recipients could not meet the increased expenses incurred while working (transportation and child care) with their low-paying jobs. Supporters of the reform also pointed out that the welfare-to-work initiative had another, residual benefit: the likelihood that the children of the recipient would be impoverished as an adult were lowered.

However, critics of the reform bill pointed out that local responsibility for the poor has historically proven to result in discriminatory practices and lends itself to subjective and/or punitive practices. The second objective—to put people to work—resembled the deserving/undeserving moral judgments of the poor in the nineteenth century. It was in applying these same qualifications that the poorhouses were born.

These attitudes and their results continue to provide a basis for concern regarding welfare reform. While local control makes it easier to address the specific needs of the poor in particular areas, it also makes it possible for localities to restrict benefits in ways that a nationwide program would never be able to do. The welfare reform laws also contain an inherent assumption that anyone who really wants work can find it, and that anyone who cannot find work within a specified period must not really be trying and therefore does not deserve government aid. This assumption ignores the fact that many people on welfare, and poor people in general, lack the skills or education necessary for most jobs. The homeless, who do not have a fixed address or telephone number and may not have clean clothes for an interview, are especially vulnerable in this system.

LIFE AFTER WELFARE REFORM.

Welfare reform proved to be more successful at removing individuals and families from welfare rolls than its many critics expected. Welfare rolls had declined by roughly half since the early 1990s and employment rates had risen for most former (and many current) welfare recipients. How much of these positive results were due to the economic boom of the 1990s, with the accompanying increase in jobs, remains to be determined. Since the economic downturn in 2001, when the most recent recession began, the number of welfare recipients continued to decline from 5.3 million in 2001 to 4.7 million in June 2004, according to the Administration for Children and Families of the U.S. Department of Health and Human Services.

Researchers know that there have been declines in the welfare rolls, but as of yet they do not know what happened to the people who are no longer aid recipients. Major studies are now underway. To get a look at what information is available and what the welfare reform act meant to people whose lives were directly affected, Sheila Zedlewski and Donald Alderson of the Urban Institute analyzed current data and presented the following preliminary results of the AFDC-to-TANF reform measures (Families on Welfare in the Post-TANF Era: Do They Differ from Their Pre-TANF Counterparts? Paper presented at the American Economics Association meeting, New Orleans, January 2001). They based their analysis on a comparison of 1,831 families on TANF in 1997 and 850 families in 1999, representing 2.2 million and 1.5 million families, respectively. The characteristics and work activities presented were obtained from interviewing the adult most knowledgeable about the children in the family, usually the mother.

The researchers found:

• The proportion of single mothers on welfare who reported living with partners increased.
• The proportion of African-Americans on welfare who reported living with partners increased.
• The proportion of adults on welfare who worked for pay rose.
• The proportion of recipients who were new entrants to the welfare system was about the same, despite some new state programs that attempt to divert adults from enrolling in TANF.
• Adults on TANF in 1999 were no more disadvantaged than those on TANF in 1997.
• Longer-term welfare recipients were significantly more disadvantaged than the new entrants.
• The proportion of recipients with less than high school education, and therefore less employable, was the same (2%) in 1997 and 1999.