With welfare reform in the news again because of a tussle on the issue between Pres. Barack Obama and former Massachusetts Gov. Mitt Romney, here is a study worth looking at.
The University of Michigan’s National Poverty Center studied the impact of 1990s welfare reform on the very poor, who the study’s authors define as people earning less than 50 percent of the federal poverty line.
“Overall, these results suggest the circumstances of the poorest families targeted by reform have diminished over time with these families experiencing both economic and material stress,” write the authors, H. Luke Shaefer at the University of Michigan and Marci Ybarra at the University of Chicago.
The authors’ key point is that average income among the very poor decreased, “likely a result of reductions in cash assistance.”
It is sad to see incomes among some poor people declining, but there is a glimmer of hope peeking out from their data for at least some.
The authors report a drastic increase in the percentage of very poor families with at least one member working, up from 26 percent in 1992 to 41 percent in 2005.
Families with slightly more income saw the likelihood at least one member would have a job rise from 55 percent to 70 percent. Families just above the poverty line saw only a slight increase in the likelihood of working, but nearly 90 percent of them have jobs.
The increase in employment among the very poor points to the possibility at least some of the families in this category are on their way out of it.
The authors note the study is limited by its view of income groups as unchanging. “Finally, we do not examine transitions over time in and out of income groups, but rather consider income as a static characteristic.”
The authors recommend future studies look at exactly this question.
This study also suggests “poor” families are not all the same, not poor to the same degree and not poor for the same reasons. Failing to recognize this is just one reason why some (many?) bureaucratic programs fail to meet the needs of these families.