Designed to boost the earnings and job prospects of low-income Americans, proposed work requirements for food stamp recipients could have another unexpected effect: causing deep poverty rates to spike among those who lose their benefits and can’t find work, researchers say.
That’s what happened to nearly 1 million single mothers in the years after the 1996 welfare reform legislation imposed work requirements and time limits on cash benefits provided through Temporary Assistance for Needy Families, at a time when the U.S. economy was similarly thriving.
While many welfare recipients found work and earned their way out of poverty after the work requirements were enacted, others lost their TANF benefits when they couldn’t meet the new law’s required work activities.
For those mainly single mothers, “there was little or no safety net to catch them anymore and they fell” into deep poverty, with income below 50 percent of the federal poverty level, said Arloc Sherman, a senior fellow at the left-leaning Center on Budget and Policy Priorities.
Among female-headed families with children, the deep poverty rate more than doubled from 2.7 percent, or about 800,000 people in 1995, to 5.7 percent, or roughly 1.7 million people in 2005, according to a 2015 CBPP analysis.
“The data show it was the decline in government assistance and not changes in people’s paychecks and other private income that drove the increase in deep poverty,” Sherman said.
Deep poverty rates could rise again under new work requirements that Congress is considering for the Supplemental Nutrition Assistance Program, formerly known as food stamps, said Robert A. Moffitt, an economics professor at Johns Hopkins University.
“There almost certainly will again be quite a large fraction of those recipients who will have difficulty finding earnings to make up for all those benefits … And they will probably be worse off,” said Moffitt, who studies economic issues facing low-income Americans. “Whether that’ll be 5 percent or 25 percent is really difficult to predict. But on the basis of what we know from that 1996 experience, it’s probably likely to be a pretty substantial minority.”
For SNAP recipients who have already lost TANF benefits, “food assistance might really be their last best safety net and taking that away might drop them further toward zero income,” Sherman said.
One of the nation’s most effective anti-poverty programs, SNAP reduced the number of people in deep poverty by more than 4.6 million, or nearly 28 percent, in 2015, according to Urban Institute estimates based on census data.
But Robert Doar, resident scholar in poverty studies at the American Enterprise Institute, said it’s “a little rash to predict with certainty that the outcome of this will be more poverty” for some SNAP recipients.
“I think that the increased attention to employment for nonworking recipients of food stamps would help those families and is more likely to lead them out of poverty than to keep them in poverty,” said Doar, who formerly administered the New York state and New York City SNAP programs.
“It’s unclear to me whether the effect of work requirements has an impact one way or the other” on deep poverty, he said.
“I think it’s just as likely that increased work, as a result of work requirements, could lead to less deep poverty, not more. … A lot depends on the economy and right now the economy is very strong,” Doar added.
As Congress and the Trump administration ponder new work requirements for SNAP, subsidized housing and other public assistance programs, Sherman and Moffitt said the strong job market doesn’t ensure that those who leave public assistance because of work requirements will be better off once they do.
Last week, the Senate passed its version of the farm bill after the House proposal called for able-bodied adults without dependents between ages 18 and 59 to either work 20 hours per week or participate in 20 hours of education or training activities in order to keep their SNAP benefits.
House and Senate negotiators must now merge the bills into one. That will be a tall task since only the House version of the bill contained SNAP work requirements, even though many Senate Republicans are pushing for them.
“We know the conference committee is going to be a wild and wooly debate as we go forward,” said Democratic Sen. Debbie Stabenow of Michigan, ranking member of the Senate Agricultural Committee.
Republican Sen. Joni Ernst of Iowa said the Senate farm bill’s lack of a SNAP work requirement “misses an opportunity to help able-bodied SNAP recipients rise up out of poverty” at a time when jobs are plentiful.
But economist James Ziliak, founding director of the Center for Poverty Research at the University of Kentucky, said “there’s just no evidence to suggest that just because it’s a good economy, now’s the time to do it. Because we don’t really have the compelling evidence to say that these work requirements (actually) work,” to get people out of poverty, Ziliak said.
Doar said the new work proposals for SNAP are perfectly reasonable.
“In households where there’s no other income, we should do something to help them get to work,” he said. “We shouldn’t be saying ‘oh no, SNAP can’t do that. That’s not their job.’ I don’t think that’s helpful to those households.”
When President Bill Clinton signed The Personal Responsibility and Work Opportunity Reconciliation Act in 1996, it triggered a dramatic decline in welfare caseloads as many TANF participants left and found work. Their efforts got a boost from hikes in federal minimum wage and heftier tax credits for working-poor families that increased earnings for low-wage workers.
“That whole combination (of factors) was enough to raise some people out of poverty and keep them out of poverty,” said Harry Holzer, a professor of public policy at Georgetown University who studies the low-wage labor market.
In 1996, 5.2 percent of Americans got more than half their total income from TANF, food stamps or Supplemental Security Income, according to government data. By 2000, that figure had fallen to 3 percent and 5.4 million fewer people were dependent on welfare, the government reported. The declining welfare dependency also helped shrink the U.S. poverty rate from 13.7 percent in 1996 to 11.3 percent in 2000.
A 2000 study by researchers Rebecca Blank and Robert Schoeni found that “the (welfare) policy changes of the 1990s reduced caseloads, but also increased income (and) reduced poverty.”
But later research found the early success of welfare reform declined over time as people cycled in and out of low-paying jobs that kept many hovering around the poverty level, Moffitt said.
“Most didn’t land in high-paying jobs that pulled them out of poverty,” Moffitt said. “They were able to have earnings that kind of matched the benefits (they) lost. So their income didn’t really go up, but it didn’t go down either.”