A Five Year Anniversary Worth Celebrating
August 21, 2001
by Ryan Streeter
On August 22, 1996, the Personal Responsibility and Work Opportunity Reconciliation Act—or welfare reform—became federal law amidst outcries that it would throw welfare recipients into mass unemployment and their children onto the streets. The bill required welfare recipients to begin working by limiting the time they could spend on public assistance. Several officials in the Clinton administration resigned in protest, believing that their boss had caved in to conservative extremists who cared nothing for welfare recipients or their children.
This summer, five years later, two important studies have been released—to little media fanfare—that shed light on the effects of this historical reform.
The first, published by the Center for Budget and Policy Priorities and co-authored by Wendell Primus, one of the Clinton officials who resigned, reports that the number of children living with single mothers dropped 8 percent between 1995 and 2000. The percentage of children living with married parents held constant at 70 percent, halting a previous downward trend in the number of married-with-children households.
This encouraging state of affairs is most strongly felt in low-income and minority communities. The percentage of low-income children living with single mothers has dropped considerably between 1995 and 2000. The proportion of African-American children living with married parents rose from 34.8 to 38.9 percent, while those living with single mothers dropped from 47.1 to 43.1 percent. The proportion of Hispanic children living with single mothers fell 13 percent during this time.
While it would be far too simplistic to credit welfare reform with the recent decline in single mother households, the data certainly suggest that it has made a positive contribution. The number of children from more affluent homes living with a single mother increased between 1995 and 2000, thus making the decrease among low-income households all the more notable.
Welfare reform took away the advantages of being unemployed and unmarried—two conditions required by the old welfare system for public assistance. Marriage is no longer penalized, and work is required. For children from low-income homes, this may make all the difference in their future.
Numerous studies have confirmed that children from two-parent households fare much better economically and socially than children from single parent homes. To the extent that welfare reform has encouraged more two-parent households, it is a victory for children.
And for low-income mothers who have remained single, the second study reports that their real wages are up significantly since the enactment of welfare reform. Published by the Urban Institute, the study claims that the inflation-adjusted median wage of single mothers is 13.9 percent higher than it was at the end of 1996, and the average single mother currently earns 78 percent of what the average worker brings home.
The poorest single mothers, those whose earnings are in the lowest 25th percentile of all working single moms, saw their hourly wages grow by 17.2 percent since 1996. Aside from these impressive wage gains, the employment rate of single mothers has not thus far been negatively affected by our slowing economy, defying yet another prediction by welfare reform skeptics that single mothers would be the first out of jobs in an economic downturn.
Since 1994, the employment rate among single mothers has risen 25 percent. Fifteen percent of presently working single mothers earned nothing in 1996. This is pretty impressive progress for what, in reality, is a short time frame.
Work and marriage were two fundamental values of the 1996 welfare reform act. Critics of welfare reform argued that requiring work was cold-hearted and encouraging marriage was moralistic and paternalistic. Certainly, more marriage and higher wages do not automatically guarantee less poverty, but five years after welfare reform, it is hard to deny that they are contributing to the well-being of more children.
August 22, 2001, marks the five-year anniversary of welfare reform. Anniversaries typically present us with the opportunity to reflect on our successes and our failures and celebrate when the former outweigh the latter. That more children are enjoying greater familial and financial stability at home gives us cause to celebrate.
And as with all anniversaries, we now face the task of building upon our successes to ensure that the next five years are even better.
Ryan StreeterRyan Streeter is Vice President of Civic Enterprises, LLC, a public policy development firm in Washington, DC. Streeter was a research fellow of the Welfare Policy Center at Hudson Institute from 1998-2001.