WE'RE WORKING.
WE'RE WORKING HARD.
WHY ARE WE STILL POOR?
The goal of the 1996 welfare reform effort
can be summed up in a single word-work. Underlying the Congressional changes
was the assumption that work should replace welfare and would, over time,
help poor families reach economic security, leaving poverty and the need for
assistance behind. With work would come a better life-and escape from the
social degradation associated with being "on the state." A careful
look at Sadie's budget, on the previous page, illustrates that that
assumption needs rethinking-many former TANF families are far from economic
security.
The passage of welfare reform together with a
booming economy sent hundreds of thousands of poor women with children into
the labor force. Five years later, welfare rolls across the country have
dropped to nearly half the levels of the mid-1990s. But what about the
families that left, are they economically secure? How well has the labor
market accommodated the circumstances of low-income single mothers facing
childcare problems, health care difficulties or inadequate transportation?
How are their children faring?
The research shows that many who have left
TANF since the 1996 reforms have experienced persistent poverty and the
grueling hardships that go with it. These families are working hard and
playing by the rules, but a single crisis can send them back to TANF, or to
a homeless shelter or a food pantry. The evidence strongly suggests the need
for more effective, family-oriented policies to help reduce poverty among
those no longer receiving cash assistance.
 | Those leaving TANF for work often
remain poor or very near it. The median wage for Maine welfare
leavers is $8.00 per hour. The average household income for this
group of workers is only $17,610, or just 24% above the federal
poverty level for a family of 3. For households in this group
headed by single parents, the median annual income was $16,000,
or just 13% above poverty.1 This is less than half of Maine's
median family income. |
| Very few employee benefits are
available to them. Less than two-thirds of those leaving welfare
work for an employer offering health insurance benefits. Among
those who are offered a plan, forty-one percent (41%) are not
able to take it, mostly due to cost. Paid sick leave, a benefit
critical to working parents of young children, is available to
less than half of these parents. Just over one-quarter of these
parents have no access to either paid or unpaid sick leave,
meaning that they risk losing their job if they or their
children are sick.2 |
| Low wages mean families can't make
ends meet. Basic needs such as shelter are put at risk-nearly
half of families leaving welfare for work got behind in their
rent or mortgage and 17% had their utilities shut off. Hunger is
a significant problem-a little over one in five skipped meals
for a day or more because they couldn't afford food, and nearly
a quarter had to go to a food bank. Transportation needs are
severe -- seventeen percent (17%) went without transportation
for more than a month.3 |
| Job advancement is minimal; work
is not steady. Income growth among workers who left TANF is
generally slow and unsteady. Most studies show an overall
increase of only about $300-$400 at the end of the first year of
employment. 4 National studies of families leaving welfare for
work indicate that only about half worked in all four quarters
of the year after they left. This is significantly lower than
for all women workers in the U.S.-80% of who work at least 40
weeks a year. 5 Many of these families find themselves churning
in and out of the labor market, off and on TANF. |
| Family income affects children's
well being. The amount of income a parent earns greatly affects
their ability to meet their children's basic needs and the
quality of the environment in which they live. Children in
families with adequate resources tend to be healthier and do
better in school; they are less likely to be involved in
criminal behavior, more likely to graduate from high school and
earn more income themselves as adults.6 |
|
Maine children have much at stake in the
policy decisions that will be made over the next several months. Research
shows that welfare-to-work programs that increase family income have the
potential to improve children's academic progress and their behavior. For
example, programs that provide additional cash supplements to low-income
working families of as little as $1,200 to $4,000 a year have been shown to
have positive impacts on the development of preschool and elementary
school-aged children.7
The evidence suggests that the most effective strategies for families who
have left assistance but remain poor, or nearly poor, involve supplementing
the earnings of low-wage workers, improving access to affordable childcare,
health care, and dependable transportation, and providing opportunities to
access education and training to increase wages. The stories of working
families in the following pages underscore these needs. These challenges are
great, but there is much at stake. The future of thousands of Maine children
and millions more throughout the nation will depend on the policy decisions
made both in Washington and the states over the next several months.
