Happy Birthday, Welfare Reform

Ten years ago today, Bill Clinton signed welfare reform into law. As we look back on the results of those 10 years, it’s worth reflecting on just how wrong the critics were.

At the time the bill was signed, the welfare rights lobby warned that “wages will go down, families will fracture, millions of children will be made more miserable than ever.” One frequently cited study predicted that more than a million children would be thrown into poverty. 

Rep. Jim McDermott wasn’t satisfied with that prediction — he raised the estimate to 2.5 million starving children. Welfare advocates painted vivid pictures of families sleeping on grates in our cities, widespread starvation, and worse.

The New York Times claimed “the effect on our cities will be devastating.” Sen. Frank Lautenberg  (D-NJ) predicted “Hungry and homeless children” would be walking our streets “begging for money, begging for food, even…engaging in prostitution.”  The Nation warned bluntly, “people will die, businesses will close, infant mortality will soar.”

If one listened to the welfare lobbies, you would have expected to be stepping over bodies in the streets every time you left your house.

Now, with 10 years of experience, we can see that those claims were about as correct as claims of weapons of mass destruction in Iraq. Welfare rolls are down. Roughly 2.5 million families have left the program, a 57 percent decline. Undoubtedly, some of this was due to a growing economy, especially in the late 1990s, but welfare rolls remain down despite the post-9/11 economic slowdown.

At the same time, poverty rates today are below the rates before welfare reform was enacted. Child poverty rates declined from more than 20 percent in 1996 to 17.8 percent today. Roughly 1.6 million children were lifted out of poverty. Perhaps even more impressively, the poverty rate among black children has fallen at the fastest rate since figures have been recorded. 

Dependent single mothers, the group most heavily affected by welfare reform, account heavily for this decline. Since the enactment of welfare reform, the poverty rate for female-headed families with children has fallen from 46 to 28.4 percent. The decline in poverty among female-headed households has been greater than for any other demographic group.

Most of those who left welfare found work, and the vast majority of them work full-time.  It is true that most first jobs found by those leaving welfare are entry-level positions — on average, they earn about $16,000 per year. That’s not much, but for many it leaves them better off than they were before. Moreover, studies show that as these former welfare recipients increase their work experience, their earnings and benefits increase. And, for better or worse, many continue to receive other forms of government assistance.

Surveys of former welfare recipients indicate that they believe their quality of life has improved since leaving welfare. And they are optimistic about the future. A majority of former welfare recipients believe that their lives will be even better in one to five years. Many of the former recipients actually praise welfare reform as a stimulus for their beginning to look for work and as an opportunity for a fresh start, and a chance to make things better for themselves and their children. Both the women and their children appear to benefit psychologically from the dignity of working.

Certainly, I’ve had my own criticisms of welfare reform. It didn’t go far enough toward making people truly independent of government. It is too prescriptive, setting too many detailed rules for states to follow. The recent reauthorization of the reform added a worthless $1.7 billion program to encourage marriage. And, Congress has failed to build on welfare reform to restructure other federal anti-poverty programs.

Still, by almost any measure you can think of, it is clear that the critics of welfare reform were quite simply wrong.

That’s worth keeping in mind when those same Chicken Littles raise similar scare stories about the proposed reform of other government programs, from Medicare and Medicaid to Social Security. Once again, we are hearing that any changes, reductions, or “privatization” of these programs will lead to widespread poverty, suffering, and other disasters. For example, they claim that allowing younger workers to privately invest a portion of their Social Security taxes through personal accounts will leave seniors eating cat food. But given their track record, maybe we should be a little bit skeptical the next time they predict the sky is falling.