Reports document the impact of US welfare reform

By Alan Whyte
14 March 2001

While politicians across the United States have hailed the recent cuts in the welfare rolls, very little attention is being paid to what actually happens to those individuals who lose their public assistance. The Federation of Protestant Welfare Agencies (FPWA) has attempted to answer this question in a recent document consisting of two separate reports. The first report was conducted by the FPWA itself and deals with poverty rates in America. The second involves their summary of over 30 studies conducted by various organizations dealing with the consequences of welfare cuts in New York City.

The FPWA begins its own report by making the point that since the federal welfare reform act of 1996 the reduction in welfare rolls has been greater than the reduction of poverty. In 1999 there were 3.4 million fewer children on welfare than in 1996, but there were only 2.2 million fewer poor children.

Many politicians also point to recent official statistics that indicate a drop in the national poverty rate in recent years. The report comments on this data. First, the official poverty rate in 1999, 11.8 percent, was close to the 12.1 percent rate that existed in 1969. Second, the report contends that the approximate 2 percent drop in poverty is not the result of the 1996 law, but rather the relative job growth in the recent period.

The report also explains that, according to the government, a family of four with an annual income of more than $17,029 is not considered to be poor. As the FPWA explains, this figure “understates the true extent of poverty: the line was set at a low percentage of average income when established, and [with rising costs] over time has dropped further and further below the average income.” If the official income level of the poor were adjusted for inflation it would be impossible to claim that there has been a 2 percent decline in poverty.

The FPWA's second report, which is a summary of about 30 different studies in New York City, analyzes the impact of the reduction of the city's welfare rolls under Mayor Rudolph Giuilani. The number of welfare recipients has been reduced from 1.1 million in July 1995 to 560,000 in July 2000, and the report examines what has happened to these people who have lost their benefits.

The report concludes: “Hunger and homelessness remain at high, apparently growing levels, despite the economic boom and a substantial decline in unemployment.” In support of this conclusion, they point to a 24 percent increase in emergency food assistance from January 1997 to January 1998, and a 36 percent increase in emergency food assistance from January 1998 to January 1999. As a whole, 71 percent of soup kitchens and food pantries in the city reported an increase in demand since the enactment of the federal welfare law in 1996.

One of the main reasons for this growth of hunger is that “Between a third and half (or more) of welfare leavers are unemployed, most report very modest or no income, and up to a majority (or more) have also been cut from food (food stamps) and health care (Medicaid) assistance.” The report concludes that one of the reasons for this growth in poverty in New York City is that “thousands upon thousands of eligible people have been denied entry to welfare or kicked off.”

The report summarizes a class action suit in which the court found that, beginning in 1998, the city began implementing procedures that discouraged qualified applicants for welfare, food stamps and Medicaid from seeking benefits. In February 1999 the federal civil rights office found that city welfare offices discriminated against both those applicants who had difficulty communicating in English, as well as those who were hearing-impaired. Furthermore, a study issued in July 2000 focused on the fact that about 60 percent of applicants who were denied welfare two or more times were not informed that they had the right to request a hearing.

The FPWA also examined the city's workfare program that compels welfare recipients to work for their benefits. The report found that parents are frequently forced to leave their children in unregulated and uninspected care out of fear they will be removed from welfare if they claim lack of proper child care as a reason why they cannot work. More than half of the parents interviewed stated that their caseworkers gave them no assistance in finding proper child care facilities. Caseworkers were often unaware that parents can be excused from working if they cannot find appropriate child care.

The report also found that individuals on the city's workfare program have been used to replace civil servant employees who were doing the same work. For example, the overall “acceptability” of city parks increased from 57 percent in 1992 to 89 percent in 2000, even though the number of park employees decreased. The reason for this is simple: the number of welfare recipients laboring in the parks rose from 182 in 1991 to 2,237 in 2000.

According to one estimate, a person on workfare could receive as low as one-fifth the wages of even a very low-paid civil servant for doing the equivalent work. One study estimated that welfare recipients have replaced 20,000 union workers in the municipal workforce. Furthermore, forcing welfare recipients onto workfare has forced many young people to drop out of school or training programs.

A copy of the report is available from the FPWA at: http://www.fpwa.org/publications/pov-welf.html.

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