Potential Changes to the U.S. Welfare Program

Potential changes to the U.S. welfare program starts with the issue of maintaining a federal safety net as paramount in the focus to reform the current welfare system. The real problem is the perception of current programs as encouraging dependency on welfare and the dissolution of the family. In fact, current federal guidelines provide the working poor with the least assistance for childcare, and numerous tax subsidies and entitlements should be accessed before such programs are cut for families with low income. The most important thing government may do for these impoverished families is keep them from falling further behind the curve with work-oriented measures like childcare, subsidized insurance, minimum wage changes, and the EITC.

The best alternative to welfare is encouraging people to return to work, and this is the focus of virtually every recent reform proposal. Financial incentives may be used to encourage recipients by allowing them to keep more of their welfare pay for maintaining consistent gainful employment. Although not as cost-effective as those requiring people to find a job first and education later, research shows programs promoting education and training get positive results. Congress may block-grant child care programs, the main source of assistance for low-income workers, and cut already insufficient support, crippling the ability of many families to rise above poverty.

Time limits will likely be only an encumbrance on escaping cyclic dependence on welfare. Current proposals permit states to determine their own AFDC time limits, excluding people collecting more than five years. Although individuals are likely to work more under the threat of benefit cutoff, in short term states are responsible for increases to the caseload from a recession or change in demographics as well as expenditures for filling jobs. A more critical issue is recipients who lose all eligibility for welfare, because very few who lose eligibility will be able to find employment.

Preventing dependency on welfare is a growing concern for many who believe it deserves more attention. This means giving focus to the decrease in unskilled job prospects, particularly for men, and gross deficits in the educational system. However, two problems closely linked to welfare dependency are an increase of unwed childbearing and insufficient support from fathers with children on AFDC. Although, there is little correlation between the generosity of the welfare system and unwed birth rate, research indicates early childbearing is often a precursor of future poverty and welfare dependency.

The Number On New York City’s Welfare Rolls Rises Despite Economic Recovery

Although there has been economic improvement for many in today’s NYC economy, the increase in the number on the welfare rolls indicates that the poorest are not benefiting from the so-called recovery. It is commonly held that most of those on welfare suffer the reality of a poor education and little if any job experience. Many recipients receive welfare continuing the intergenerational cycle of poverty.

There are several explanations why the welfare rolls increased even while recovery and new jobs continued to grow throughout the year. Many of the 90,000 new jobs created in NYC in the past year are in fact low skilled positions. These are precisely the jobs one might expect welfare recipients to fill.

Several interesting points presented by Stephen Eide in the Manhattan Institute’s March 2015 “Poverty and Progress in New York III” report includes the number of those on welfare and placed into employment, as reported by HRA. The Human Resources Administration (HRA) is the NYC agency tasked with managing the multibillion dollar welfare organization. It turns out that the number of those placed into employment was overstated by about 50 percent. Many of those on welfare, who obtained employment, returned to the welfare rolls within the year. The explanation for the increase in welfare enrollment over 2014 is that government policy is the driving force, not economic conditions.

There are several reasons offered as to why the fluctuations in the number of welfare recipients is not consistent with economic recovery.

Several explanations are provided:

  • Government policy is the driving force behind the welfare rolls.
  • There is a lag between economic recovery and the impact on the welfare system. One would expect the welfare rolls to diminish at some point after recovery has set in.
  • The target group in the recovery is not the single female head of household with children,
  • New groups of poverty now include the middle class.

Many middle class families have been hit hard by the last recession and real income has declined along with real wages. The loss of employment by the head of household combined with the creation of new jobs with primarily low skill and low wage requirements translates into a new class of welfare recipients, the middle class. Increases in foreclosures, decreases in middle class job opportunities, the decline in real wages, and the expiration of unemployment benefits leaves many previously middle class falling into the ranks of poverty.

Just under a quarter of a million New Yorkers have been added to the poverty lines since the last recession started. Over half of these fell into poverty after the recovery began.

The welfare rolls rise and fall according to criteria other than just economic conditions and more likely a combination of factors affect the shift in number and character of the current welfare recipient.