20 Years Ago, Welfare Reform Was Signed Into Law

Poverty in America after 20 years of welfare reform

image

Source: Did Welfare Reform Increase Extreme Poverty in the United States?

image

Source: Did Welfare Reform Increase Extreme Poverty in the United States?

Poverty Has Declined a Lot Over the Past 30 Years in the USA

image

Source: Poverty Has Declined a Lot Over the Past 30 Years | Mother Jones from Poverty After Welfare Reform | Manhattan Institute.

@BillClinton was not triangulating on welfare reform

This @amprog conservative antipoverty dictionary does not add up

The only alternative offered by the Centre for American Progress is send them on a course. This response, which is the standard policy response to any labour market crisis, will not solve poverty, mush less inequality.

1996 US welfare reforms & single mother employment rates @garethmorgannz @geoffsimmonz

image

Source: Ron Haskins (2015).

@GarethMorgannz is repeating Bob Hawke’s mistake that child poverty can be solved by more money

Jess Berentson-Shaw’s series on child poverty in the Dominion Post on child poverty had two major flaws. She argues that the solution to child poverty is to give more families more money.

The first flaw is she does not discuss previous failed attempts to solve poverty with more money. For example, Bob Hawke promised in the 1987 election that no child need live in poverty by 1990. Raising the family allowance to $1 above the family poverty line did not fix child poverty. That promise was the one Hawke later said he regretted most in his public life.

During the 1987 Australian Federal election campaign, Labour Party Prime Minister Bob Hawke announced a Family Allowance Supplement that would ensure no Australian child need live in poverty by 1990. These changes in social welfare benefits and family allowance supplements would ensure that every family would be paid one per week dollar more than the poverty threshold applicable to their family situation. I know child poverty was to be done in this way because I worked in the Prime Minister’s Department at this time.

About 580,000 Australian children lived in poverty in 1987. In 2007, at least 13 per cent of children, or 730,000 people, were poor. This was after social welfare benefits and family allowance supplements were increased to $1 above the child poverty threshold.

There is an infallible test of the practicality of Left over Left dreams such as the abolition of child poverty by writing bigger and bigger cheques to those currently poor.

If you could abolish child poverty simply by increasing welfare benefits and family allowances, the centre-right parties would be all over it like flies to the proverbial as a way of camping over the middle ground and winning the votes of socially conscious swinging voters for decades to come. Many people who would naturally vote for the centre-right parties on all other issues vote for centre-left parties out of a concern for poverty and a belief that centre-left parties will give a better deal to the poor.

The notion that poverty is simply the result of a lack of money and giving people more money will abolish child poverty has never worked. As the OECD (2009, p. 171) observed:

It would be naïve to promote increasing the family income for children through the tax-transfer system as a cure-all to problems of child well-being.

Berentson-Shaw’s second major flaw is she does not discuss the success of the 1996 US federal welfare reforms. Any serious participant in discussions of child poverty must address those 1996 US reforms.

These reforms cut Hispanic and black child poverty rates by 1/3rd in a few years by moving single mothers into employment. Time limits on welfare for single parents reduced caseloads by two thirds, 90% in some states.

After the 1996 US Federal welfare reforms, the subsequent declines in welfare participation rates and gains in employment were largest among the single mothers previously thought to be most disadvantaged: young (ages 18-29), mothers with children aged under seven, high school drop-outs, and black and Hispanic mothers. These low-skilled single mothers were thought to face the greatest barriers to employment. Blank (2002) found that:

…nobody of any political persuasion predicted or would have believed possible the magnitude of change that occurred in the behaviour of low-income single-parent families.

Employment are never married mothers increased by 50% after the US well for a reforms: employment of single mothers with less than a high school education increased by two-thirds; and employment of single mothers aged 18 to 24 approximately doubled.

With the enactment of welfare reform in 1996, black child poverty fell by more than a quarter to 30% in 2001. Over a six-year period after welfare reform, 1.2 million black children were lifted out of poverty. In 2001, despite a recession, the poverty rate for black children was at the lowest point in national history.

The only modern welfare reforms to significantly cut child poverty were the US federal welfare reforms. They emphasised helping those who helped themselves, which is the classic Samaritans’ dilemma.

Countless studies show that when comparing the carrot and the stick in welfare reform, the stick is always more effective in reducing poverty and increasing employment.

The best solution to child poverty is to move their parents into a job. Simon Chapple is clear in his book last year with Jonathan Boston:

Sustained full-time employment of sole parents and the fulltime and part-time employment of two parents, even at low wages, are sufficient to pull the majority of children above most poverty lines, given the various existing tax credits and family supports.

The best available analysis, the most credible analysis, the most independent analysis in New Zealand or anywhere else in the world that having a job and marrying the father of your child is the secret to the leaving poverty is recently by the Living Wage movement in New Zealand.

According to the calculations of the Living Wage movement, earning only $19.25 per hour with a second earner working only 20 hours affords their two children, including a teenager, Sky TV, pets, annual international travel, video games and 10-hours childcare.

This analysis of the Living Wage movement shows that finishing school so your job pays something reasonable and marrying the father of your child affords a comfortable family life. In the USA this is called the success sequence.

More evidence of the success of the 1996 US federal welfare reforms

@Greencatherine 1996 US welfare reforms and the employment of single mums who were high school dropouts

https://twitter.com/hamiltonproj/status/659776768094547968

There was a step increase in the employment rate of single parents and in particular high school dropouts straight after the implementation of the 1996 US federal welfare reforms.

These single mothers who dropped out of high school were thought to be least employable and most at risk to the 1996 US welfare reform. There was a large increase in their employment and this massive improvement in their rates of employment is enduring to this day.

There were massive reductions in black and Hispanic child poverty rates after 1996 US welfare reforms

The interesting part of this chart is the white child poverty rate didn’t change much after the US 1996 federal welfare reforms. It was black and Hispanic child poverty rates that dropped by 1/3rd.

Previous Older Entries

Bruner the Anarchist

The State is merely a legalized mafia claiming a monopoly on violence

Helen Joyce

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Inequalities

Research and reflection from both sides of the Atlantic

freer lives

A socialist critique of gender ideology

200-Proof Liberals

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Darwinian Business

A blog exploring business from an evolutionary perspective, by Max Beilby

Spin, strangeness, and charm

Politics, media bias, science, and psychology

Family Inequality

by Philip N. Cohen

What Paul Gregory is Writing About

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Woman's Place UK

Violence against women and sex discrimination still exist. Women need reserved places, separate spaces and distinct services.

TVHE

The Visible Hand in Economics

Kids Prefer Cheese

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

George Mason Economics Society

Provoking discussion by publishing economic writing

Offsetting Behaviour

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

JONATHAN TURLEY

Res ipsa loquitur - The thing itself speaks

single sex spaces

Single sex spaces are a question of consent

Adventures of a Tudor Nerd

Tudor History from the Wars of the Roses to the Death of Elizabeth I

Weapons and Warfare

History and Hardware of Warfare

No Punches Pulled

Laughter – the best medicine

TannerOnPolicy

Politics and Policy with a Libertarian Twist

Notes On Liberty

Spontaneous thoughts on a humble creed

Map Dragons

Written by map lovers for map lovers

New Historical Express

(Formerly Hatful of History)

CONVERSABLE ECONOMIST

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

Barrie Saunders

Thoughts on public policy and the media

The Victorian Commons

Researching the House of Commons, 1832-1868

Coyote Blog

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

American Enterprise Institute – AEI

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

The History of Parliament

Blogging on parliament, politics and people, from the History of Parliament

Catallaxy Files

Australia's leading libertarian and centre-right blog

Books & Boots

reflections on books and art

Legal History Miscellany

Posts on the History of Law, Crime, and Justice

Sex, Drugs and Economics

Celebrating humanity's flourishing through the spread of capitalism and the rule of law

The Long Run

the EHS blog

Vincent Geloso

Economics, History, Lots of Data and French Stuff

Climatism

Tracking Anthropogenic Climate Alarmism

%d bloggers like this: