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Failed “Welfare” Programs and the Web of Poverty

The policies that create paradigms of poverty are often remote and administered with a hidden hand.

Whether by default or conscious implementation, a variety of institutional policies contribute to ongoing poverty. These include federal policies around poverty assistance and student debt, institutional barriers to upward social mobility and criminalization of poverty.

Dr. Martin Luther King, Jr. once noted, “An edifice that produces beggars needs restructuring.” However, though “beggars” are constantly being “produced” in every corner of the country, it is sometimes difficult to determine what the specific edifices that produce them look like, and where they lie. The politics and policies that create paradigms of poverty are often remote and administered with a hidden hand.

Facts and figures on the subject of poverty must be parsed: There are “beggars” living paycheck-to-paycheck, a step away from slipping into poverty. There are “beggars” mired in deep poverty, handed down generationally. And there are those in even deeper poverty, faced with homelessness and starvation.

In 2011, according to a US Census Bureau report, the official poverty rate in the United States was 15 percent, amounting to 46.2 million people in poverty. The poverty rate for children under 18 was even more sobering, with more than one in five kids living in poverty.

Further, the numbers indicate that things have gotten worse over the past decade: Poverty hit a 17-year high in 2010, and remained at that rate in 2011. Rates are substantially worse for blacks and Latinos, more than a quarter of whom live in poverty.

It’s clear that the edifice – the socioeconomic and political framework that drives these trends – has failed. But what would a true restructuring look like?

Federal Poverty Programs Do Not Lift the Poor out of Poverty

Across the US government, most programs intended to eradicate poverty have served only to perpetuate it.

Sixteen years ago, President Clinton signed off on a piece of welfare reform legislation called the Personal Responsibility and Work Opportunity Reconciliation Act (PRWOR), which bore the colloquial nomenclature “welfare to work.” The Department of Health and Human Services web site states that PRWOR welfare recipients were required to “work in exchange for time-limited assistance.” Clinton’s welfare-to-work program also included “comprehensive child support enforcement” that claimed to be “the most sweeping crackdown on non-paying parents in history.” Clinton’s PRWOR welfare-to-work program is now called Temporary Assistance to Needy Families (TANF).

For a short while in the late 1990s, the program did appear to reduce poverty. Whatever successes may have been achieved, however, were short-lived, according to a recent report from the Center on Budget and Policy Priorities (CBPP):

Over the last 16 years, the national TANF caseload has declined by 60 percent, even as poverty and deep poverty have worsened. While the official poverty rate among families declined in the early years of welfare reform, when the economy was booming and unemployment was extremely low, it started increasing in 2000 and now exceeds its 1996 level.

These opposing trends – TANF caseloads going down while poverty is going up – mean that a much smaller share of poor families receive cash assistance from TANF than they did prior to welfare reform.

According to Arloc Sherman, a senior researcher at CBPP, TANF has hastened a restructuring that ultimately exacerbated conditions for the poorest people. “It was about cutting different groups of people; for example, immigrants were cut from food stamps,” he told Truthout.

Sherman noted that “welfare to work” programs have, in some cases, helped folks living just below the poverty line to climb above it. However, he said, the change in structure “very much created a sink-or-swim world.”

“The number of children and parents who fell below (the poverty line) increased by more than a million in the ensuing decade, and that is very directly tied to the weakening of the safety net for families who happened to be without work,” Sherman said, adding that the programs proved to be “a real weakening of the safety net for those at the bottom, in deep poverty.”

He added that the difficult economic climate of recent years has compounded these effects: When there’s little work available, the “welfare-to-work” approach falls flat.

Though changes could likely be made to make TANF more just, the underlying principle of the welfare-to-work approach inevitably tosses some of the neediest people to the sidelines: Making aid contingent on a particular (sometimes impossible) involvement with the work force means that many people for whom that specific participation is not viable (many of them single mothers) simply “fall” off the rolls.

In a piece in In These Times, reporter Michelle Chen attributes worsening poverty to the “cruel” welfare-to-work policies of both Republicans and Democrats.

“[B]oth parties have gutted the welfare system as a whole to conduct a cruel social experiment on impoverished families,” she states, adding that welfare “reform” amounts to a “punitive approach to poverty [that] has driven poor mothers of color further to the margins of the economy, making them even more politically invisible.”

There Are No Policies to Increase Social Mobility

The ideal of “the American dream” has been slipping away quickly, even for those who aren’t living in poverty. According to a recent Federal Reserve survey cited in The New York Times, “The median American family’s net worth dropped by nearly 40 percent from 2007 to 2010 – from $126,400 to $77,300 – wiping out 18 years’ worth of accumulated wealth.” Perhaps it is this kind of data that led even financial self-help guru Suze Orman to declare in a 2010 Forbes magazine article, “The American dream is dead.”

In an October 2012 story in Der Spiegel, Nobel Prize-winning economist Joseph Stiglitz echoed Orman, saying, “The American dream has become a myth.” Stiglitz, former chief economist to the World Bank, continued:

There has been no improvement in well-being for the typical American family for 20 years. On the other side, the top one percent of the population gets 40% more in one week than the bottom fifth receive in a full year. In short, we have become a divided society. America has created a marvelous economic machine, but most of the benefits have gone to the top.

The ongoing loss of the middle class in inner cities further evidences the fact that current policies favor a wealthy few, resulting in the return of once-modestly-integrated cities to near apartheid-like economic segregation. In the San Francisco Chronicle, Tyche Hendricks wrote in 2006, “The gentrification of San Francisco’s neighborhoods reflects one facet of a national trend: the decline of middle-income neighborhoods in metropolitan America.”

The acceleration of economic inequity and social immobilization is not an artifact of nature or natural forces; like poverty itself, it stems from the powerful “edifice” King describes.

Changes in tax policies have allowed an elite few to escape the forces of gravity in terms of wealth and income, permitting large corporations to escape taxes almost altogether. A parallel trend is also seen in trade policy, where a failure to enforce antitrust laws and unregulated finance has promulgated business models that undermine the viability of the independent small- to medium-size businesses that were once the bedrock of communal prosperity across America. These conjoined policies have also resulted in the creation of lower paying “McJobs”, increasing the ranks of the working poor.

Changes in bankruptcy laws over the last 20 years have made it harder to declare personal bankruptcy and to escape certain kinds of debts – discouraging entrepreneurs and students, and condemning many people to perpetual debt servitude. This punitive personal debt, in fact, is a crucial, often downplayed issue in the landscape of economic injustice, according to economist Dean Baker, co-founder of the Center For Economic Policy and Research (CEPR) and regular Truthout contributor.

“[T]here were never very many people who made a successful run with a small business,” Baker told Truthout. “The vast majority fail…. The bigger issue here is the new [Bush administration] bankruptcy laws, which leave many people in debt for decades.”

Other government policies that reduce access to education – once the great driver of social mobility – make the prospect of escaping from poverty even more difficult.

A case in point: The University of California (UC), California State University (CSU) and California Community Colleges (CCC) are the primary systems that constitute the (public) higher education system for the State of California. These systems used to receive far more state funding than did correctional facilities (prisons). However, higher education now receives slightly less funding than California’s prison system.

This shift in both state and federal policies is traceable through the shift in budgetary priorities. Instead of providing the poor with an opportunity to learn their way out of poverty, the poor are being offered to the prison-industrial complex as commodities: When it comes to education funding in impoverished neighborhoods, “security” measures often take precedence over teaching and learning.

“From metal detectors to drug tests, from increased policing to all-seeing electronic surveillance, the public school of the twenty-first century reflects a society that has become fixated on crime, security and violence,” Annette Fuentes wrote in her book, Lockdown High: When The Schoolhouse Becomes A Jailhouse, published last year. In an interview with me last year, Fuentes commented on how the current public education system is failing America’s youth – especially kids of color – in achieving a better life:

It’s clear that kids from certain demographics, including income, background, race and ethnicity, that we can look at that and predict how good the schools are, and rate of racial suspensions and zero tolerance policies. Part of that demographic is income, so when you look at that indicator that means that all those kids that come from the poverty level, generally speaking, can determine a kid’s prospects in school; determine dropout rates and incidents with the criminal justice system. We know that African-American students will face a disproportionate experience with zero tolerance policies. These kids are more likely to drop out. It’s like a daisy chain of circumstances that relate to a kid’s background.

The problem of educational access overlaps with the personal debt debacle: As the need for student loans has steadily increased, so has the number of borrowers who have fallen behind on making payments. According to The New York Times, “Nearly one in every six borrowers with a loan balance is in default.” This is a number “greater than the yearly tuition bill for all students at public two- and four-year colleges and universities.”

More and more loans have become necessary to finance a higher education, as Pell grants and other government sources of funding for lower-income students have decreased – and as states, including California where the public higher education system was once a public pride and glory – have significantly reduced funding to universities. Meanwhile, debt relief options are increasingly scarce: Dean Baker pointed to “the tightening of rules on relieving student loan debt” as one of the most important factors contributing to the widespread personal debt dilemma.

Break the Chains of Poverty

When viewed exclusively through a capitalistic lens, poverty may seem an individual failing instead of a systemic ill: Capitalists have long promulgated the idea that the poor are undeserving, lazy, morally inadequate. The governmental policies we’ve deconstructed – policies that assure the continuation and proliferation of poverty – tacitly (or, sometimes, straightforwardly) endorse this view. However, as we critique these policies, we must also highlight the many efforts directed toward true economic justice that have sprung up around the country in recent years: Grassroots organizations are finding alternative ways to combat poverty outside of the politics of lobbying the government. One inspiring example is the Ella Baker Center (EBC) in Oakland, California.

The Center, named for Ella Jo Baker, an “unsung hero of the civil rights movement,” works through service and advocacy to combat poverty and confront the unjust “justice” system that criminalizes poor people.

According to EBC’s website, California’s Division of Juvenile Justice has “an 81 percent recidivism rate and a cost of over $200,000 per youth, per year.” I asked Jennifer Kim, EBC’s senior policy analyst, how the funds could be better spent on poor, disenfranchised youth, in ways that might have a long-lasting impact.

“When the state spends $200,000 to lock up a youth in a broken system, it’s a divestment away from creating opportunities and lifting up impoverished communities,” Kim said, speaking specifically of California. “Other states have provided real rehabilitation programs that not only improve youth outcomes but they do it at a fraction of the cost.”

When the costs of incarceration are so high, reducing the corrections budget and reinvesting significantly in rehabilitation programs can still save states considerable money, making it an attractive option for all groups involved, according to Kim.

“In a time where we have to tighten our budgets and figure out innovative ways to serve communities, it’s helpful to know that other states are doing it, and they are doing it well,” Kim said. “Instead of cutting health and human services or education that provide vital services, we should look at our bloated corrections budget, figure out what’s not working, cut it out or close it down, and invest in alternatives that enhance public safety, improve outcomes – all at a savings.”

Innovative advocacy groups are increasingly questioning – and pushing back against – the “welfare” programs that have entrenched the cycle of poverty. It remains to be seen whether, over the coming years, policymakers will begin to see the writing on the wall.

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