Income Money and Poverty Status - Welfare Reform

Minorities have long accounted for a major portion of the welfare rolls across the United States. Over the years, the welfare system grew into a major political issue, especially during presidential election years. In 1996 a Republican-led House of Representatives passed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PL 104-193), which was signed into law by President Bill Clinton. The purpose of the legislation was to cut the welfare rolls by moving recipients into the work force, thereby improving the standard of living of poor children. Because welfare generally serves poor families with young children, the new welfare-to-work programs required support in such areas as childcare and transportation.

In some respects welfare-to-work has been successful, as reflected in a major drop in welfare caseloads across the country and an initial drop in child poverty. However, critics maintain that the success is deceptive. One reason caseloads decreased was simply that the eligibility FIGURE 5.2
Full-time, year-round workers with annual earnings of $35,000 or more by detailed Hispanic origin, 2001
(In percent) requirements were stiffened. As a result, many legal immigrants, especially Hispanics who were working poor, were denied aid, adversely affecting their children, who were U.S. citizens. Furthermore, many Hispanics who were eligible for aid were intimidated or confused by the new regulations. The economic boom of the late 1990s was also responsible for much of the gains, according to critics, and a subsequent recession brought an increase to poverty rates and unemployment. Moreover, the type of work available to families on welfare was generally low paying, offering no health insurance or other benefits and doing little to lift welfare-to-work participants above the poverty level. Very often the work was not accommodating to the needs of single mothers, resulting in a number of adverse consequences attributed to welfare reform. For instance, there was a rise in the number of African-American children who lived with neither parent and were raised instead by grandparents, other relatives, or in foster homes. Such children fared far worse than children from single-parent homes in terms of delinquency, school dropout rates, and mental health problems. According to Harvard University welfare analysts, cited by Nina Bernstein in "Side Effects of Welfare Law: The No-Parent Family" (New York Times, July 29, 2002), the percentage of urban African-American children "living without their parents more than doubled on average, to 16.1 percent from 7.5 percent" since the late 1990s. Bernstein further reported, however, that, according to economists at the University of California and the Rand Corporation, "Hispanic mothers were more likely to be married after welfare changes, and Hispanic children somewhat less likely

TABLE 5.4
Three-year-average median household income and poverty rates by race and Hispanic origin, 1998–2000
Three-year average needed for reliable estimates for American Indians and Alaska Natives

	Income	Poverty rate
United States	$41,800*	11.9%*
White	$43,800*	9.9%*
White non-Hispanic	$45,500*	7.8%
Black	$28,700*	23.9%*
American Indian and Alaska Native	$31,800	25.9%
Asian and Pacific Islander	$52,600*	11.3%
Hispanic (of any race)	$31,700*	23.1%*
*Denotes statistically significant increase (income)/decrease (poverty) from 1998–99 to 1999–2000.
Note: Income rounded to the nearest $100. Income in 2000 dollars.
SOURCE: "Three-Year-Average Median Household Income and Poverty Rates by Race and Hispanic Origin: 1998–2000," in Income and Poverty, U.S. Census Bureau, Washington, DC, September 2001 [Online] http://www.census.gov/Press-Release/www/2001/PressBri.pdf [accessed March 11, 2004]

to live in a single-parent home but no more likely to live without their own parents."