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What Really Happened?

Welfare Reform Turns Fifteen

by STEPHEN PIMPARE

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) — the controversial welfare reform law of 1996 — turned fifteen years old this month. If someone suggests to you that it has been a success, don’t believe them. But you also need to be skeptical if they tell you that it’s failed, for despite assertions by opponents and supporters alike that the PRWORA would have profound consequences, the law seems to have had only modest effects.

Reform reduced the welfare rolls, researchers agree (by some 70 percent nationwide, and even more in some states) and, at least for its first few years, it increased the employment rate among poor women with children. But well over a decade of sophisticated analysis from university scholars, think tank analysts, and government agencies has failed to consistently find any other significant results, positive or negative, confounding everyone’s expectations. How can it be that we were all so wrong?

But we should have expected this: the effects of reform have been limited because the reach of welfare itself was so limited. While public and political rhetoric might lead you to believe that welfare use was widespread, long-term, and that its benefits were overly generous, the truth is that most recipients received aid for about 18 months while they cared for a newborn child, looked for a new job, escaped an abusive relationship, or finished school. And even then, many worked (often at “under-the-table” jobs) because welfare benefits were so low: never in the history of AFDC, the pre-reform welfare program now known as TANF, were benefits in any state, even when combined with the value of food stamps, enough to lift a family above the poverty line, and welfare was almost never the only source of income in poor households. It was rarely even the main source. As a result, even at its peak, welfare had a marginal effect upon the national poverty rate, reducing it by, perhaps, one percent overall.

It’s worse now, to be sure. By 2006, the median maximum monthly benefit for a family of three brought them to 29 percent of the poverty line, compared to 35 percent in 1996 and 52 percent in 1981, according to data from the House Ways & Means Committee. But the decline long preceded the PRWORA: the real value of AFDC benefits had already fallen 51 percent between 1970 and 1996.

Moreover, to focus solely on welfare is to miss the larger and more important story of the broader erosion of American social policy: adjusted for inflation, average welfare benefits reached their peak value in 1968, the same year the minimum wage reached its peak; it was 1972 for unemployment insurance, 1981 for food stamps, and 1982 for disability insurance (although 2000 for the EITC) as analysis by Suzanne Mettler and Andrew Milstein reveals. Welfare reform might be better thought of as the end of a process, rather than the beginning of one.

What we’ve seen since reform is that for most poor families their overall household income hasn’t changed, but the mix of sources for that income has: what they’ve lost in welfare benefits they have, for the most part, made up for with income from other government programs, assistance from family and friends, work in the informal economy, and so on. Already difficult and insecure lives have been made a bit more difficult and a bit more insecure.

The safety net has become less effective at lifting people out of poverty, it is clear; it has become even less effective at lifting children out of poverty, and at lifting children out of deep poverty, as data from the Center on Budget and Policy Priorities have shown. But welfare reform is a small portion of this failure, and absent significant (and unlikely) changes to the PRWORA when it is up for another renewal in September, its impact is likely to remain marginal. After all, for most poor Americans, the program that has been transformed from ADC in the 1930s to AFDC in the 1960s to TANF in the 1990s is now irrelevant, and rather than “ending welfare as we know it,” we have, for all but a few, simply ended welfare, a process made relatively easy because we had allowed it to be quietly whittled away for three decades.

Stephen Pimpare is adjunct associate professor of social work at Columbia University and NYU. He is the author of A People’s History of Poverty in America, winner of the Michael Harrington Book Award.