Welfare Reform Needs Reforming to Move Georgia Families Out of Poverty
By Fred Brooks
In 1996, the federal government radically reformed welfare, including cash aid now called Temporary Assistance for Needy Families (TANF), with the goals of reducing poverty and “helping needy families achieve self-sufficiency.” Reform policies are one thing, but actual change is another.
In 2016, I conducted a study in Georgia with a sample of families who were on TANF and exited the program between 2009 and 2015. One premise of the study: Were these families self-sufficient or at least on a path out of poverty? The results of the study suggest federal and state TANF policies are not delivering on these goals. Four key findings and potential policy implications emerged from my work and are highlighted below.
Key Finding 1
My study, like many others, found most families remained poor even with employment. Although 60 percent of TANF leavers were employed in some fashion, average hourly wages were very modest, ranging from $7.55 (part-time) to $12.18 (full-time). Of families with the parent employed, 52 percent remained below the federal poverty level.
Key Finding 2
Poverty rates fell dramatically when all forms of income and safety net benefits, such as the Supplemental Nutrition Assistance Program (SNAP), once known as food stamps, and Section 8 housing vouchers, were counted as income. Calculated this way, the percentage of the sample in poverty fell from 52 percent to 36 percent. Although the safety net in the U.S. is often disparaged, my study found that safety net benefits had profound impacts on reducing extreme poverty and hardship.
Key Finding 3
While interviewing TANF leavers, we heard a number of stories of “wage theft.” One woman earned only $8.75 an hour fueling aircraft at Hartsfield-Jackson Atlanta International Airport. She said her contract employer was budgeted $16 an hour to pay for her sole position, but rather than pay her a decent wage with $16 an hour, he hired an additional person and halved the hourly wage, hiring two people for the price of one.
Key Finding 4
The average participant had $18,709 in debts. This exceeded the average yearly employment income, which was $17,814. Of the sample, 51 percent had an average of $23,276 in student loan debt, though only 8 percent obtained college degrees. Studies suggest high default rates for people who take out student loans and do not finish college. Among study participants, 38 percent had medical debt averaging $4,179. This finding is not surprising because 29 percent of the adults in the sample had no health insurance.
Our study suggests much more work needs to be done to move a majority of TANF leavers from poverty to self-sufficiency. If the government wants TANF policy to accomplish this, it either needs to help women get affordable education and training for jobs with living wages or make dramatic policy changes, such as raising the minimum wage to $15 an hour, enforcing labor law to prevent wage theft, making it easier to form unions and better supporting women so they can remain in the workforce (for example, expand child care subsidies, allow women to stay home with a sick child without losing a job and expand Medicaid in Georgia).
Because the political climate suggests the above reforms are not likely to happen any time soon, the impact the current safety net is having in Georgia should not be underestimated. Our data suggested that safety net benefits such as SNAP, Medicaid, child care subsidies, housing vouchers, public housing and the Earned Income Tax Credit are helping numerous low-income families avoid homelessness, severe poverty and extreme material hardship. At a minimum, these safety net benefits should not be cut, and if possible they should be expanded.
The full study, “Georgia’s TANF Leavers: How are they faring?” is available at http://cslf.gsu.edu/download/georgias-tanf-leavers-2009-15-faring/.
Fred Brooks is an associate professor in the School of Social Work at the Andrew Young School of Policy Studies and affiliated faculty with the Center for State and Local Finance. His research focuses on issues of poverty and inequality with specific interests in evaluating various community, labor, non-profit and government interventions designed to decrease poverty and inequality.