Extensive research has been done on poverty, what elements lead to it, and how it can be solved. In June of 2016, Speaker of the House Paul Ryan released his plan, A Better Way, that he hoped would kick-start a GOP led initiative to pull Americans out of poverty. This task force on Poverty, Opportunity, and Upward Mobility has an emphasis on work requirements to cut unnecessary spending and help Americans rise above the poverty line as a replacement for the current system of government assistance. I hypothesize that the GOP led work requirement programs do not adequately prevent poverty rates from rising or help those living in poverty rise above the poverty threshold. I also hypothesize that a significant motivator behind the GOP work requirement initiative is cutting spending rather than reducing poverty. I will draw information from studies conducted on the effects of work requirements compared to non-work requirement safety net programs, and congressional budget data.
Literature review
Jeff Grogger and Lynn A. Karoly came to several main conclusions about the ineffectiveness of work requirements for welfare assistance. Their results showed that most recipients of welfare were just as likely to work whether they were in the “work requirements” group or not, that stable employment was actually the exception, many of those who faced “significant barriers” to finding employment never found work while participating in otherwise successful work requirement programs, the most successful programs involved encouraging education and advancing skills of those who are subject to work requirements, and most in those programs remained poor or became poorer. They also concluded that voluntary employment programs would be the better option because they would allow people to seek employment without taking away benefits from those who cannot meet the work requirements. Will Fischer from the Center on Budget and Policy Priorities found that work requirements for those receiving federal housing assistance would undercut the effectiveness of the program already in existence because 81% of those receiving benefits were disabled, elderly, or already working. Fischer also adds that implementing work requirements has often proven to be ineffective or harmful because many families who cannot find work will also be left without benefits, pushing them deeper into poverty. These studies are informative on the effects of work requirements on families and poverty rates, but do not go into great detail on the what decisions went into making these proposals, such as how consolidating several safety net programs will cut governmental spending.
Theory
A common belief is that those below the poverty threshold found themselves there because of personal decisions or traits. In A Better Way, it states “Work – especially full-time work – is the surest way to escape poverty.” It also reports that in 2014, “only 2.7 percent of full-time workers lived below the poverty level, compared with 32.3 percent of adults who do not work.” This may be an oversimplification of an incredibly complex issue. Although it is hard to pinpoint the actual cause of poverty, there are several factors, such as education, race, low wages, and disabilities, that can make it more difficult for someone to achieve economic success and stability. As of 2014, 29% of Americans with no high school diploma were living in poverty, while the rate was only 5% for those with a Bachelor’s degree or higher (U.S. Census Bureau). Many areas in the United States do not provide proper access to education. Areas with lower levels of education might be more likely to experience higher levels of poverty because those individuals will not have the credentials, knowledge, or skills necessary for jobs with higher wages. Another aspect that appears to have an effect on poverty is race. Minorities, most notably Black and Hispanic, have poverty rates almost double that of White people (U.S. Census Bureau). Statistically speaking, simply living in areas with poor education or being born a
minority automatically leaves you more likely to suffer in poverty.
The GOP has proposed A Better Way, which involves many changes to the current welfare system including adding work requirements in order to receive benefits. This plan will effectively cut spending or consolidate many of the “overlapping programs” among the wide array of government safety net programs in place to protect Americans from falling further below the poverty threshold (abetterway.speaker.gov). Eliminating a large portion of them could potentially harm a vast amount of people living in poverty or at risk of falling below the threshold.
A Better Way highlights the “enormous” amount of money being spent on welfare programs each year, citing the Congressional Budget Office’s analysis that the “federal government will spend more than $1 trillion annually on means-tested programs by 2026.” This high expenditure gives the GOP incentive to cut spending and enforce work requirements, lowering the number of people benefiting from such programs. Although these numbers may be true, according to the Center on Budget and Policy Priorities, safety net programs only made up a fraction of the overall budget in the FY 2016 data. If Grogger and Karoly’s studies are correct about work requirements being harmful and ineffective, then congress could look in other areas to save money that would not drastically effect the lives of Americans living in or at risk of living in poverty.
Data
The current system for combatting poverty relies on safety net programs. This consists of multiple government assistance welfare programs such as Temporary Assistance for Needy Families (TANF), Medicaid, and Housing Assistance. These programs provide assistance to low-income individuals and families who, without the assistance, would most likely fall below the poverty line. These programs often provide training for jobs and make exceptions for those with significant barriers to finding work. Speaker Ryan’s plan involves putting in place work requirements in order to receive access to these assistance programs and consolidating programs with overlapping aspects.
Congress has not passed any significant poverty/welfare legislation since 1996 with the Personal Responsibility and Work Opportunity Act. With this reform came TANF, a popular program which has work requirements for families wishing to receive benefits (aspe.hhs.gov). The number of bills passed since the 111th congress has also decreased significantly. Since the 111th Congress, the majority has switched from Democrats to Republicans.
As congress has become Republican controlled, there has been generally less welfare related legislation introduced and less welfare related legislation passed. As this is happening, the poverty rate is still decreasing. The overall poverty rate in the United States has experienced a steady but minimal decline, without widespread work requirements in place. According to the U.S. Census Bureau, the poverty rate in 2016 was 12.7 percent, down 2.1 percentage points since 2014. Although there is still a poverty issue in the United States, this would suggest the reason for introducing a task force such as A Better Way also has largely to do with decreasing spending on safety net programs.
If congress is aware of the studies done on the ineffectiveness of work requirements, it makes the most sense that they would take a different route to achieving the goal of reducing poverty, unless it is to reduce the amount of spending on safety net programs.
Conclusion
I believe that my hypothesis is true. The United States does not have work requirements set in place for all welfare programs but poverty rates have seen a decline in recent years. Studies also suggest that without work requirements, most people living in poverty either cannot work due to disabilities or being elderly, are actively seeking employment or are already employed. When work requirements are put in place they put families in danger of losing necessary assistance which would only cause the poverty rate to rise. A Better Way appeared to be a way to efficiently cut spending on government programs but did not accurately take into account the complexity of the issue that poverty is. A Better Way would decrease the amount of governmental spending by consolidating or cutting programs congress deems unnecessary or redundant, but this may be to the detriment to those who rely on those programs for the sake of saving money that could be saved elsewhere. In Grogger and Karoly’s study, they found that work requirements were more successful when the government also provided job training and educational resources. Further studies on the effectiveness of those programs could be resourceful to legislators should they wish to pass any welfare/poverty related bills that would substantially lower the poverty rate in America.