Public Programs to Fight Poverty

Chapter 3
Public Programs to Fight Poverty

There are many methods which the federal government and the states use to combat poverty. There are a variety of programs that provide assistance to those in or at risk of poverty. These are often referred to as welfare. Some of these programs, like Temporary Aid for Needy Families (TANF), are designed to help people improve their situation so they will no longer be poor. The Supplemental Security Income (SSI) program provides assistance to people who have conditions that make it difficult to earn a living. A number of programs, including Food Stamps and Medicaid, are intended to help those in poverty meet their basic needs for food, shelter, and medical care (these programs are discussed in Chapter 7). Besides welfare programs, the government has established programs and policies like the minimum wage and unemployment compensation that are intended to help people avoid poverty in the first place.

The most far-reaching welfare law is the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). First enacted in 1996 and renewed since, PRWORA replaced a welfare system based primarily on the Aid to Families with Dependent Children (AFDC) program with one centered on TANF. Critics of AFDC felt that the system produced welfare dependency rather than temporary assistance to help recipients move into a job and off welfare. TANF was specifically designed to limit the amount of time individuals could receive benefits, and to require that they work. The intention of the law was to reduce the number of people receiving welfare by bringing them into the workforce and out of poverty. PRWORA also changed some other welfare programs to place greater emphasis on these priorities.

According to the U.S. Department of Health and Human Services (HHS), in Temporary Assistance for Needy Families Program (TANF): Sixth Annual Report to Congress (November 2004, http://www.acf.hhs.gov//programs/ofa/annualreport6/chapter10/chap10.pdf), the welfare caseload fell from a monthly average of 4.5 million families during fiscal year (FY) 1996 to an average of 2.1 million families per month during FY 2002, a drop of 53%. This represented the largest welfare caseload decline in history. Observers agreed that some of the decline was the result of a strong economy in which unemployment was around 4%, an unprecedented low, rather than welfare reform. For example, a study conducted by the City University of New York and cited by the HHS in Temporary Assistance for Needy Families Program (TANF): Fourth Annual Report to Congress (April 2002, http://www.acf.hhs.gov/programs/ofa/opreweb/ar2001/indexar.htm) attributes 60% of the reductions in caseloads to welfare reform and 20% to the effects of a robust economy.

Critics of PRWORA question if the reduction in welfare caseloads are really a good thing. They are concerned that the system's time limits and its focus on moving people off of welfare and into work forces some individuals off of benefits even if they have a genuine need for them. For instance in states that are unable to provide jobs with a living wage the PRWORA system may merely move the poor population from welfare into low-wage work and deeper into poverty. In the fact sheet "TANF at 10" (August 17, 2006, http://www.cbpp.org/8-17-06tanf.htm), Sharon Parrott and Arloc Sherman note that the share of poor children who received TANF benefits dropped by half from 1995 to 2003, from 62% in 1995 to 31% in 2003. Parrott and Sherman state, "More than half57%of the caseload decline during the first decade of welfare reform reflects a decline in the extent to which TANF programs serve families that are poor enough to qualify, rather than to a reduction in the number of families who are poor enough to qualify for aid." As a result of these concerns, modifications to welfare legislation continue to be proposed.

PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT

Title I: Block Grants

Under the PRWORA each state receives a single block grant (a lump sum of money) for TANF programs. The amount of money available under TANF has remained steady at about $16 billion per year. However, Gene Falk points out in Temporary Assistance for Needy Families (TANF) Block Grant: FY2007 Budget Proposals (March 3, 2006, http://www.nationalaglawcenter.org/assets/crs/RS22385.pdf) that in constant dollars federal welfare spending has steadily decreased since 2001.

States have considerable control over how they implement the programs covered by the block grant, but the act requires that:

  • Families on welfare for five cumulative years no longer receive further cash assistance. States can set shorter time limits and can exempt up to 20% of their caseload from the time limits.
  • To count toward meeting the work requirement, a state must require individuals to participate in employment (public or private), on-the-job training, community service, work experience, vocational training (up to twelve months), or child care for other workers for at least twenty hours per week. State and local communities are responsible for the development of work, whether by creating community service jobs or by providing income subsidies or hiring incentives for potential employers.
  • Unmarried parents under the age of eighteen must live with an adult or with adult supervision and must participate in educational or job training to receive benefits. In addition, the law encourages second-chance homes (discussed later in this chapter) to provide teen parents with the skills and support they need. The law also provides $50 million per year in new funding for state abstinence education activities, geared toward discouraging teen pregnancy through abstinence rather than through birth control.

None of the block grant funds can be used for adults who have been on welfare for over five years or who do not work after receiving benefits for two years. However, states are offered some flexibility in how to spend their TANF funds.

Title II: Supplemental Security Income

The PRWORA redefined the term disability for children who receive Supplemental Security Income (SSI). A child is considered disabled if he or she has a medically determinable physical or mental impairment that results in marked and severe functional limitations that can be expected to cause death or has lasted or can be expected to last at least twelve months. The PRWORA removed "maladaptive behavior" as a medical criterion from the listing of impairments used for evaluating mental disabilities in children.

Title III: Child Support

To be eligible for federal funds, each state must operate a Child Support Enforcement program that meets federal guidelines. The state must establish centralized registries of child support orders and centers for collection and disbursement of child support payments, and parents must sign their child support rights over to the state to be eligible for TANF benefits. The state must also establish enforcement methods, such as revoking the driver's and professional licenses of delinquent parents. The HHS's Administration for Children and Families notes in the fact sheet "Office of Child Support Enforcement" (October 2006, http://www.acf.hhs.gov/opa/fact_sheets/cse_factsheet.html) that in FY 2005 the program collected $23 billion at a cost of $5.4 billion. Federal funding for this program continues to increase; in FY 2005, $3.5 billion in federal funding was provided to states to help fund their programs; in FY 2006, $3.9 billion was provided.

To receive full benefits, a mother must cooperate with state efforts to establish paternity. She may be denied assistance if she refuses to disclose the father.

Title IV: Restricting Welfare and Public Benefits for Noncitizens

The PRWORA originally severely limited or banned benefits to most legal immigrants who entered the country on or after the date on which the bill became law. Ineligibility continued for a five-year period or until they attained citizenship. In addition, states had the option of withholding eligibility for Medicaid, TANF, and other social services from legal immigrants already residing in the United States. Refugees, including those who had come for political asylum or other sanctuary, veterans, and Cuban/Haitian immigrants were exempted from the five-year ban.

Illegal immigrants no longer had any entitlement to benefit programs, such as TANF or Medicaid. They could receive emergency medical care, short-term disaster relief, immunizations, and treatment for communicable diseases (in the interest of public health). They could also use community services such as soup kitchens and shelters, some housing programs, and school lunches/breakfasts if their children were eligible for free public education. States established programs to verify the legal residence of immigrants before paying benefits and may elect to deny Women, Infants, and Children (WIC) benefits and other child nutrition programs to illegal aliens.

The Balanced Budget Act of 1997 and the Noncitizen Technical Amendment Act of 1998 invested $11.5 billion to restore disability and health benefits to 380,000 legal immigrants who were in the United States before welfare reform became law on August 22, 1996. The Balanced Budget Act also extended the SSI and Medicaid eligibility period for refugees and people seeking asylum from five years after entry to seven years to give these residents more time to naturalize.

Title V: Child Protection

The PRWORA gave states the authority to use current federal funds to pay for foster care for children in child care institutions. It extended the enhanced federal match for statewide automated child welfare information systems through 1997 and appropriated $6 million per year (FY 1996 to FY 2002) for a national random sample study of abused and neglected children.

Title VI: Child Care

The law required that states maintain spending for child care for low-income families at the level of FY 1994 or FY 1995, whichever was greater, to be eligible for federally matched funds. Mandatory funding was set at $13.9 billion through June 30, 2004, with states receiving an estimated $1.2 billion per year before matching began. The remainder of the funds was available for state matching at the Medicaid rate. Total federal and state expenditures on child care totaled $3.2 billion in 2000, an increase of 60% over 1999 ($2 billion). The Congressional Budget Office (CBO), in Cost Estimate (January 27, 2006, http://www.cbo.gov/ftpdocs/70xx/doc7028/s1932conf.pdf), states that the Deficit Reduction Act of 2005, which reauthorized the PRWORA, provides for increased annual federal funding for child care by $11.7 billion by 2010.

As under prior law, states must establish standards for prevention and control of infectious diseases, such as immunization programs, and for building codes and physical safety in child care institutions. Child care workers must also receive minimal training in health and safety. However, many low-income people rely on informal sources of child care, including relatives and friends.

Pamela Holcomb et al. indicate in Child Care Subsidies and TANF: A Synthesis of Three Studies on Systems, Policies, and Parents (2006, http://www.urban.org/UploadedPDF/311302_synthesis.pdf) that despite increased federal funding for child care, the need outweighs the resources available under the law. As a result of more parents working while still on welfare or leaving welfare to work, the critical need for child care has become more pronounced. In The Changing Role of Welfare in the Lives of Low-Income Families with Children (August 2006, http://www.urban.org/UploadedPDF/311357_occa73.pdf), Pamela Loprest and Sheila Zedlewski report that only 21.4% of families who received TANF monies in 2002 received help paying for child care in that year. Even though the child care support system gives priority to families leaving welfare for work over other low-income families, only four out of ten families (40.8%) that had recently stopped receiving TANF monies received help paying for child care.

Title VII: Child Nutrition Programs

The PRWORA continued existing child nutrition programs, such as the school lunch and breakfast programs. Maximum reimbursement was reduced, however, for the Summer Food Service Program and for some institutional food programs. States were allowed to decide whether to include or exclude legal immigrants from these programs. According to the U.S. Department of Agriculture (USDA), in FY 2007 Budget Summary and Annual Performance Plan (2007, http://www.obpa.usda.gov/budsum/2007/fy07budsum.pdf), the budget for FY 2007 child nutrition programs was $13.8 billion, an increase of $439 million over the previous year.

Title VIII: Food Stamps and Commodities

The law reduced maximum benefits to the level of the Thrifty Food Plan, the index set by the USDA that reflects the amount of money needed to purchase food to meet minimal nutrition requirements. Benefits were indexed to the rate of inflation so that they increase as inflation rises.

The law also restructured the way certain expenses and earnings were counted in establishing eligibility for food stamps. Under the PRWORA, when recipients' benefits are calculated, their countable monthly income is reduced by several deductions, including a standard deduction, a deduction for excessively high shelter expenses, a dependent care deduction, and medical expenses for the elderly and disabled. These deductions raised food stamp allotments. In the fact sheet "Food Stamp Program" (January 4, 2007, http://www.fns.usda.gov/fsp/applicant_recipients/fs_Res_Ben_Elig.htm), the USDA reports that through September 30, 2007, the maximum monthly allotment for a household of one was $155, for a household of two was $284, for a household of three was $408, and for a household of four was $518.

By law, all food stamp recipients who are eighteen to fifty years old and without children (known as able-bodied adults without dependents [ABAWD]) must work at least part time or be limited to three months of assistance in a thirty-six-month period. Recipients who were in a workfare program (a welfare program that usually requires recipients to perform public-service duties) for thirty days but lost their placement may qualify for an additional three months of food stamps. (This provision was revised to allow states to exempt 15% of ABAWD recipients from this restriction.)

PRWORA Reauthorization

Since 1996 many changes have been made to the PRWORA. The PRWORA was reauthorized through 2010 when President George W. Bush signed the Deficit Reduction Act of 2005 in February 2006. This bill did not increase funding for TANF programs and further restricted eligibility requirements. The Communications Workers of America noted critically in "TANF Reauthorization" (March 2, 2006, http://www.cwa-legislative.org/fact-sheets/page.jsp?itemID=27482970) that the basic TANF block grant did not increase with inflation but remained capped at $16 billion. Funding for child care was set at $2 billion for each year between 2006 and 2010. Child support enforcement funding was reduced. Drug testing became required for every TANF applicant and recipient. Finally, the bill allowed TANF funds to be used to promote the value of marriage through public advertising and high school and adult classes and mentoring programs.

ELIGIBILITY FOR TANF AND BENEFIT PAYMENTS

Under TANF, states decide how much to aid a needy family. No federal guidelines exist for determining eligibility, and no requirement mandates that states aid all needy families. Though TANF does not require states to have a need standard or a gross income limit, as the AFDC did, many states have based their TANF programs in part on their earlier practices.

The maximum benefit is the amount paid to a family with no countable income. (Federal law specifies what income counts toward figuring benefits and what income, such as child support, is to be disregarded by the state.) The maximum benefit is to be paid only to those families that comply with TANF's work requirements or other program requirements established by the state, such as parental and personal responsibility rules.

Although most states vary benefits according to family size, some eliminate or restrict benefit increases because of the birth of a new child to a recipient already receiving benefits, in effect penalizing poor families for having children. Instead, benefits depend on family size at the time of enrollment in sixteen states. Idaho pays a flat monthly grant that is the same regardless of family size. Wisconsin pays benefits based on work activity of the recipient and not on family size. Five states provide an increase in benefits to TANF families following the birth of an additional child.

Most states did not change their maximum benefits between July 1994 and January 2003, despite the major changes brought about by the PRWORA. When taking inflation into account, the value of benefits in most states has actually declined. (See Table 3.1.)

Most families receiving TANF benefits are also eligible for food stamps. A single benefit determination is made for both cash and food assistance. Though the eligibility and benefit amounts for TANF are determined by the states, food stamp eligibility and benefit amounts are determined by federal law and are consistent in all states.

Food stamp benefits, which are administered by the USDA, are not counted in determining the TANF cash benefit. However, TANF benefits are considered part of a family's countable income in determining food stamp benefits, which are reduced $0.30 for each dollar of countable income. Therefore, food stamp benefits are higher in states with lower TANF benefits and vice versa. As of January 1, 2003, combined monthly benefits for a family of three were lowest in Mississippi ($525), Puerto Rico ($532), Tennessee ($535), Texas ($546), and Arkansas ($549). (See Table 3.2.) Alaska ($1,157) and Hawaii ($1,012) had the highest combined benefit for a family of three. (Poverty guidelines are higher in these two states because of higher costs of living.) Other states that paid the most in benefits included Vermont ($902), California ($881 in region 1), and New York ($898 in Suffolk County).

Who Gets TANF Benefits?

In 2003 an average of 3.7 million people, or 1.3% of the population, received TANF benefits each month. (See Table 3.3.) Some groups in the population were more likely to receive these benefits than others. Children under eighteen years old were more likely than adults to receive TANF benefits3.4%compared with only 0.7% of adults aged eighteen to sixty-four years and 0.1% of adults aged sixty-five and older. Women were more likely than men to receive TANF benefits (1.5% and 1.1%, respectively), reflecting their role as the primary caretakers of children.

A higher proportion of African-Americans (3.7%) received TANF benefits each month in 2003 than any other racial or ethnic group. (See Table 3.3.) Among other groups, 2.7% of Hispanics, 1.5% of Asians and Pacific Islanders, and 0.5% of non-Hispanic whites received benefits, on average, each month.

Single female-headed families were by far the most likely family group to receive TANF benefits each month in 2003. More than one out of twenty of these families (5.6%) received TANF benefits each month, compared with 1.3% of single male-headed families and 0.5% of married-couple families. (See Table 3.3.)

Adults who had a high school education or less were much more likely than their better-educated peers to receive TANF in 2003, reflecting the difficulty of earning a living wage without some higher education. In that year 1.4% of adults who had not received a high school diploma received TANF assistance each month, compared with 0.5% of high school graduates and 0.2% of adults who had attended college. (See Table 3.3.)

TABLE 3.1
Maximum AFDC/TANF benefita for a family of three (parent with two children), by state, selected years 19942003
State July 1994 July 1996 July 1998 January 2000 January 2002 January 2003 Percent real change from July 1994 to January 2003b
aThis table presents maximum benefits generally available to families without income. Some states pay larger benefits to certain categories of recipients. For example, Hawaii and Massachusetts have a separate benefit schedule for persons whom they exempt from work. Also, some states supplement benefits for families with special needs.
bThe inflation factor used to convert July 1994 dollars to January 2003 dollars was 1.2244 (representing the change in the Consumer Price Index for all urban consumers).
Notes: AFDC is Aid to Families with Dependent Children. TANF is Temporary Assistance for Needy Families.
Source: "Table 7.10. Maximum AFDC/TANF Benefit for a Family of Three (Parent with Two Children), July 1994January 2003," in The Green Book, U.S. House of Representatives, Committee on Ways and Means, 2004, http://waysandmeans.house.gov/media/pdf/greenbook2003/Section7.pdf (accessed January 11, 2007)
Alabama 164 164 164 164 164 215 7.0
Alaska 923 923 923 923 923 923 18.3
Arizona 347 347 347 347 347 347 18.3
Arkansas 204 204 204 204 204 204 18.3
California 607 596 565 626 679 679 8.6
Colorado 356 356 356 356 356 356 18.3
Connecticut 680 636 636 636 636 636 23.6
Delaware 338 338 338 338 338 338 18.3
District of Columbia 420 415 379 379 379 379 26.3
Florida 303 303 303 303 303 303 18.3
Georgia 280 280 280 280 280 280 18.3
Hawaii 712 712 570 570 570 570 34.6
Idaho 317 317 276 293 293 309 20.4
Illinois 377 377 377 377 377 396 14.2
Indiana 288 288 288 288 288 288 18.3
Iowa 426 426 426 426 426 426 18.3
Kansas 429 429 429 429 429 429 18.3
Kentucky 262 262 262 262 262 262 18.3
Louisiana 190 190 190 190 240 240 3.2
Maine 418 418 439 461 485 485 5.2
Maryland 373 373 388 417 472 473 3.69
Massachusetts 579 565 565 565 618 618 12.8
Michigan-Washtenaw County 489 489 489 489 489 489 18.3
Minnesota 532 532 532 532 532 532 18.3
Mississippi 120 120 120 170 170 170 15.7
Missouri 292 292 292 292 292 292 18.3
Montana 416 438 461 469 494 507 0.5
Nebraska 364 364 364 364 364 364 18.3
Nevada 348 348 348 348 348 348 18.3
New Hampshire 550 550 550 575 600 625 7.2
New Jersey 424 424 424 424 424 424 18.3
New Mexico 389 389 439 439 439 389 18.3
New York-New York City 577 577 577 577 577 577 18.3
New York-Suffolk County 703 703 703 703 703 703 18.3
North Carolina 272 272 272 272 272 272 18.3
North Dakota 431 431 440 457 477 477 9.6
Ohio 341 341 362 373 373 373 10.7
Oklahoma 324 307 292 292 292 292 26.4
Oregon 460 460 460 460 460 460 18.3
Pennsylvania 421 421 421 421 421 421 18.3
Rhode Island 554 554 554 554 554 554 18.3
South Carolina 200 200 201 204 205 205 16.3
South Dakota 430 430 430 430 469 483 8.3
Tennessee 185 185 185 185 185 185 18.3
Texas 188 188 188 201 201 201 12.7
Utah 414 416 451 451 474 474 6.5
Vermont 650 633 656 708 709 709 10.9
Virginia 354 354 354 354 389 389 10.3
Washington 546 546 546 546 546 546 18.3
West Virginia 253 253 253 328 453 453 46.2
Wisconsin 517 517 673 673 673 673 6.3
Wisconsin-W2 Transitions 517 517 628 628 628 628 0.8
Wyoming 360 360 340 340 340 340 22.9

Because TANF is designed to help those most in need, it is not surprising that most people who received TANF in 2003 were poor. In that year 6.1% of people below the poverty line received TANF assistance each month, compared with 0.5% of people who lived in families with incomes above the poverty line. (See Table 3.3.)

TABLE 3.2
Maximum combined TANF and food benefits for single-parent family from one to six persons, January 1, 2003
State Family size
1 2 3 4 5 6
Alabama $294 $429 $556 $676 $789 $926
Alaska 597 952 1,157 1,455 1,526 1,732
Arizona 322 488 649 797 939 1,106
Arkansas 220 409 549 678 797 945
California-region 1 414 679 881 1,071 1,241 1,436
California-region 2 402 660 859 1,044 1,210 1,402
Colorado 329 492 655 807 955 1,126
Connecticut 460 655 851 1,023 1,181 1,367
Delaware 319 485 642 790 929 1,094
District of Columbia 346 504 671 829 970 1,152
Florida 305 464 618 760 895 1,054
Georgia 287 460 602 736 861 1,000
Hawaii 503 762 1,012 1,244 1,460 1,711
Idaho 395 512 622 721 813 929
Illinois 335 500 683 809 953 1,113
Indiana 276 456 607 747 880 1,037
Iowa 307 548 704 851 980 1,140
Kansas 366 542 706 853 987 1,146
Kentucky 309 453 589 734 865 1,015
Louisiana 261 427 574 704 826 969
Maine 340 550 745 932 1,110 1,312
Maryland 326 557 737 905 1,060 1,223
Massachusetts 471 658 838 1,004 1,165 1,351
Michigan-Washtenaw County 392 576 748 920 1,079 1,288
Michigan-Wayne County 372 555 727 899 1,058 1,267
Minnesota 354 602 778 939 1,085 1,254
Mississippi 249 398 525 641 749 882
Missouri 274 460 610 744 868 1,015
Montana 388 578 761 932 1,097 1,286
Nebraska 334 501 661 809 951 1,117
Nevada 340 498 649 790 923 1,080
New Hampshire 521 685 843 986 1,120 1,293
New Jersey 292 521 703 846 983 1,144
New Mexico 340 513 678 833 980 1,152
New York-Suffolk County 491 699 898 1,082 1,261 1,440
North Carolina 305 461 596 713 823 957
North Dakota 376 560 740 906 1,066 1,250
Ohio 335 509 667 827 974 1,133
Oklahoma 305 453 610 757 892 1,051
Oregon 396 572 728 900 1,059 1,241
Pennsylvania 329 527 700 865 1,022 1,194
Puerto Rico 271 405 532 648 756 889
Rhode Island 408 610 794 949 1,096 1,269
South Carolina 260 410 549 678 800 945
South Dakota 426 598 744 878 1,005 1,158
Tennessee 234 395 535 663 781 926
Texas 223 418 546 673 784 929
Utah 371 562 738 893 1,039 1,200
Vermont 531 719 902 1,061 1,216 1,375
Virginia 348 522 678 820 973 1,124
Washington 423 604 788 954 1,115 1,302
West Virginia 423 576 723 863 989 1,142

Most states have imposed a lifetime limit of five years for the receipt of TANF benefits for adults, although states are allowed to extend benefits for hardship cases or victims of domestic violence. Some states have set limits less than five years. Families in which there is no adult head of household are exempt from time limits. The actual median amount of time recipients receive TANF benefits is much lower than the lifetime limit. Between 2001 and 2003 TANF recipients received benefits for a median of 4.9 months. (See Table 2.17 in Chapter 2.) Children under eighteen years old tended to received TANF for a longer period; they received benefits for a median of 6.3 months, compared with a median of four months for adults aged eighteen to sixty-four.

TABLE 3.2
Maximum combined TANF and food benefits for single-parent family from one to six persons, January 1, 2003 [continued]
Family size
State 1 2 3 4 5 6
Notes:
Food stamp calculations assume that the family does not receive an excess shelter deduction. In many states with low TANF (Temporary Assistance for Needy Families) benefits, combined benefits shown reflect the maximum food stamp allotment for the family size, but in some states the excess shelter deduction would increase food stamps (by up to $110 monthly-more in Alaska and Hawaii). Calculations assume a singleparent family with no earned income.
*Wisconsin has no one-person families in its regular W-2 (TANF) program. Pregnant women without children are ineligible and "child-only" recipients have been moved into special programs of kinship care and SSI (Supplemental Security Income) caretaker supplements. The kinship care payment is $215 monthly per child; the SSI caretaker supplement program provides $250 monthly for the first eligible child and $150 for each additional child.
Source: "Table 7-12. Maximum Combined TANF and Food Benefits for Single-Parent Family from One to Six Persons, January 1, 2003," in The Green Book, U.S. House of Representatives, Committee on Ways and Means, 2004, http://waysandmeans.house.gov/media/pdf/greenbook2003/Section7.pdf (accessed January 11, 2007)
Wisconsin-community service (*) 767 877 976 1,068 1,184
Wisconsin-W2 transitions (*) 735 845 944 1,036 1,153

Asians and Pacific Islanders had a much higher median duration of participation in TANF than did other racial and ethnic groups. Between 2001 and 2003 Asians and Pacific Islanders had a median duration of 11.4 months, compared with 6.5 months for African-Americans and four months for Hispanics and non-Hispanic whites. (See Table 2.17 in Chapter 2.)

People in families headed by a single female had a higher median duration of participation in TANF than did other family types. Between 2001 and 2003 these families had a median duration of 5.8 months, compared with 3.9 months for married-couple families and 3.8 months in families headed by a single male. (See Table 2.17 in Chapter 2.)

Teen Mothers

TANF contains provisions to encourage two-parent families and reduce out-of-wedlock births. Several provisions deal specifically with the reduction of births among teen mothers. According to Rebecca A. Maynard, in Kids Having Kids: A Robin Hood Foundation Special Report on the Costs of Adolescent Childbearing (1996, http://www.robinhood.org/approach/KHK.pdf), teen mothers tend to have less education and fewer job skills than older mothers.

TABLE 3.3
Average monthly program participation rates for TANF or general assistance, by selected characteristics, 200103
Characteristic Temporary Assistance for Needy Families(TANF)/General Assistance Participation rates (in percent)
2001 2002 2003
    Total number of recipientsa 3,935 3,584 3,667
As percent of the population 1.4 1.3 1.3
Race and Hispanic originb
White 0.9 0.8 0.8
Not Hispanic 0.6 0.5 0.5
Black 4.2 3.8 3.7
Asian or Pacific Islander 2.0 1.8 1.5
Hispanic 2.9 2.7 2.7
Not Hispanic 1.2 1.1 1.1
Age
Under 18 years 3.7 3.3 3.4
18 to 64 years 0.7 0.7 0.7
65 years and older 0.1 0.1 0.1
Sex
Men 1.2 1.1 1.1
Women 1.6 1.5 1.5
Educational attainment (people 18 and older)
Less than high school graduate 1.7 1.6 1.4
High school graduate, no college 0.6 0.5 0.5
Some college 0.3 0.2 0.2
Disability status (people 15 to 64 years old)
With a work disability 2.1 1.6 1.5
With no work disability 0.6 0.6 0.7
Residence
Metropolitan 1.4 1.3 1.3
Central city 2.5 2.3 2.3
Noncentral city 0.8 0.7 0.8
Nonmetropolitan 1.3 1.2 1.1
Region
Northeast 1.6 1.4 1.5
Midwest 1.2 1.1 1.1
South 1.0 0.9 0.9
West 2.1 2.0 1.9
Family status
In families 1.6 1.5 1.5
In married-couple families 0.5 0.5 0.5
In families with a female householder, no husband present 6.5 5.8 5.6
In families with a male householder, no wife present 1.4 1.1 1.3
Unrelated individuals 0.4 0.3 0.3
Employment and labor force status (people 18 and older)
Employed full-timec 0.1 0.1 0.1
Employed part-time 0.7 0.5 0.5
Unemployed 3.2 2.7 2.6
Not in labor force 1.2 1.2 1.1

Teen mothers have a much higher participation rate in major means-tested government programs than do mothers in other age groups. The U.S. Bureau of the Census finds that in 2001 half (50%) of unmarried mothers aged fifteen to nineteen who had had a child in the last year received some form of government assistance, compared with 16% of all unmarried mothers who had had a child in the last year. (See Figure 3.1.) However, older unmarried mothers were more likely than younger unmarried mothers to receive TANF in particular. In 2001, 68,000 of 670,000 unmarried mothers aged fifteen to twenty-four years who had had a child in the last year, or 10.1%, received TANF, but 54,000 of 365,000 unmarried mothers aged twenty-five to thirty-four years, or 14.8%, received TANF in that year. (See Table 3.4.)

TABLE 3.3
Average monthly program participation rates for TANF or general assistance, by selected characteristics, 200103 [continued]
Characteristic Temporary Assistance for Needy Families(TANF)/General Assistance Participation rates (in percent)
2001 2002 2003
aIn thousands.
bHispanics may be any race.
cFull-time and part-time employment reflect the monthly employment status.
dFamily income-to-poverty threshold ratio reflects the monthly poverty status. A ratio of under 1.00 indicates that a person is in poverty, whereas a ratio of higher than or equal to 1.00 indicates that a person is not in poverty.
Source: Tracy A. Loveless and Jan Tin, Table A-2. Average Monthly Program Participation Rates for Temporary Assistance for Needy Families or General Assistance by Selected Characteristics: 200103, in Dynamics of Economic Well-Being: Participation in Government Programs, 2001 Through 2003: Who Gets Assistance? Current Population Reports, U.S. Census Bureau, P70-108, October 2006, http://www.census.gov/prod/2006pubs/p70-108.pdf (accessed January 2, 2007)
Marital status (people 18 and older)
Married 0.3 0.3 0.3
Separated, divorced, or widowed 0.9 0.7 0.7
Never married 1.2 1.2 1.1
Family income-to-poverty ratiod
Under 1.00 7.2 6.7 6.1
1.00 and over 0.4 0.4 0.5

The birth rate for unmarried teens is high, although it declined in the 1990s. (See Figure 3.2.) Between 1991 and 2003 the birth rate for fifteen- to seventeen-year-olds fell significantly, from a birth rate of 30.8 per one thousand unmarried girls in that age group to 20.3 per one thousand. Births to teenagers represent a concern to society because teen mothers tend to have less education and less ability to support and care for their children. In addition, Maynard indicates that babies born to teen mothers are:

  • More likely to be born prematurely and to be of low birth weight
  • At risk for health problems, lower cognitive skills, and behavioral problems
  • Less likely to grow up in homes with their fathers, possibly causing emotional as well as financial problems
  • At greater risk to be abused

To receive TANF benefits, states are required to submit plans detailing their efforts to reduce out-of-wedlock births, especially among teenagers. To be eligible for TANF benefits, unmarried minor parents are required to remain in high school or its equivalent as well as to live in an adult-supervised setting. One provision in the law allows for the creation of second-chance homes for teen parents and their children, a type of home that already existed in some states. These homes require that all residents either enroll in school or participate in a job-training program. They also provide parenting and life skills classes as well as counseling and support services.

A performance bonus that is separate from the TANF block grant rewards states for reductions in out-of-wedlock births combined with a decline in the abortion rate. Grant money is also available for states to implement abstinence-only education programs. In addition, the welfare-reform law directs the HHS to provide a strategy to prevent unmarried teen pregnancies and to ensure that 25% of the communities in the United States implement a teen pregnancy prevention program. The CBO reports in the Cost Estimate that the 2006 reauthorization of the PRWORA provided an additional $73 million per year for FY 2006 through FY 2015 to fund healthy marriage initiativesa variety of activities designed to promote the value of marriage to the general population and teach interpersonal skills to help ensure the stability of marital relationships.

THE WELFARE-TO-WORK CONCEPT

TANF recipients are expected to participate in work activities while receiving benefits. After twenty-four months of assistance, states must require recipients to work at least part time to continue to receive cash benefits. States are permitted to exempt certain groups from the work-activity requirements, including parents of young children (up to one year) and disabled adults. The TANF law defines the work activities that count when determining a state's work participation rate.

As part of their plans, states must require parents to work after two years of receiving benefits. In 2000 states were required to have 40% of all parents, and at least one adult in 90% of all two-parent families, engaged in a work activity for a minimum of twenty hours per week for single parents and thirty-five hours per week for at least one adult in two-parent families. This work require-

TABLE 3.4
Program participation status of mothers 15 to 44 years with a birth in the last year, by marital status and age, 1996 and 2001
[Numbers in thousands]
Marital status and age of mother Total Participantsb Nonparticipantsd 1996e
Number Participation ratea Total TANF Food stamps WIC Medicaid Housing assistance Otherc Number Participation ratea
Number Percent Number Percent
Represents or rounds to zero.
(B) Derived measure not shown when base is less than 200,000.
aPercent of mothers currently participating or covered by one or more programs.
bCurrently participating in or covered by one or more programs.
cIncludes general assistance and other welfare.
dNot currently participating in any program.
eData for 1996 may vary due to analysis of additional assistance programs.
fIncludes married spouse present, married spouse absent (excluding separated).
gIncludes separated, divorced, widowed, and never married.
Notes: TANF is Temporary Assistance for Needy Families. WIC is Women, Infants and Children (public health program).
Source: Terry A. Lugaila, "Table 2. Program Participation Status of Mothers 15 to 44 Years with a Birth in the Last Year by Marital Status and Age: 1996 and 2001," in Participation of Mothers in Government Assistance Programs: 2001, U.S. Census Bureau, Current Population Reports, P70-102, September 2005, http://www.census.gov/prod/2005pubs/p70-102.pdf (accessed January 11, 2007)
Mothers who had a child in the last year 4,066 29.4 1,194 100.0 171 559 449 767 239 44 2,872 100.0 3,859 41.5
Now marriedf
   Total 2,899 18.2 526 44.1 50 166 248 251 80 21 2,373 82.6 2,730 27.7
15 to 24 years 493 41.7 206 17.2 24 56 100 110 19 12 287 10.0 586 55.4
25 to 34 years 1,840 12.9 237 19.9 21 83 111 102 52 3 1,603 55.8 1,634 21.7
35 to 44 years 567 14.8 84 7.0 5 27 37 39 9 6 483 16.8 510 15.2
Unmarriedg
   Total 1,167 57.2 667 55.9 121 394 201 516 159 23 499 17.4 1,129 74.7
15 to 24 years 670 59.8 400 33.5 68 225 112 310 103 13 269 9.4 672 80.9
25 to 34 years 365 56.0 205 17.1 54 134 73 165 42 5 161 5.6 356 68.0
35 to 44 years 132 (B) 62 5.2 35 17 41 14 5 69 2.4 101 (B)
Mothers who did not have a child in the last year 31,174 17.1 5,334 100.0 577 2,941 449 3,484 1,834 154 25,841 00.0 31,633 21.7
Now marriedf
   Total 20,675 8.4 1,747 32.8 110 808 201 1,011 414 42 18,929 73.3 21,760 11.5
15 to 24 years 1,049 24.3 255 4.8 14 119 46 144 61 3 794 3.1 1,119 34.4
25 to 34 years 6,833 10.7 729 13.7 42 332 101 416 191 7 6,105 23.6 8,061 14.7
35 to 44 years 12,793 6.0 763 14.3 54 357 54 451 162 32 12,030 46.6 12,581 7.5
Unmarriedg
   Total 10,499 34.2 3,587 67.2 467 2,133 248 2,473 1,421 112 6,912 26.7 9,873 44.2
15 to 24 years 1,758 48.6 854 16.0 134 422 131 626 324 25 904 3.5 1,592 63.5
25 to 34 years 3,724 37.9 1,411 26.4 212 919 92 982 551 33 2,314 9.0 3,609 50.1
35 to 44 years 5,017 26.4 1,322 24.8 121 792 25 865 546 55 3,695 14.3 4,672 33.1

ment is becoming stricter. The 2006 reauthorization of PRWORA required 50% of all TANF recipients to work in 2006, increasing by 5% each year to 70% in 2010.

TANF recipients required to work must spend a minimum number of hours per week engaged in one of the following activities:

  • An unsubsidized job (no government help)
  • A subsidized private job
  • A subsidized public job
  • Work experience
  • On-the-job training
  • Job search and job readiness (a usual maximum of six weeks, total)
  • Community service
  • Vocational educational training (a twelve-month maximum)
  • Job skills training
  • Education related to employment
  • High school or a general equivalency diploma completion
  • Providing child care for a community service participant.

Additional provisions apply to young parents who are under the age of twenty and are either household heads or married and who lack a high school diploma. They will be considered "engaged in work" if they either maintain satisfactory attendance in high school (no hours specified) or participate in education directly related to work (twenty hours per week).

Education and Training

Reflecting a work-first philosophy, the 1996 welfare law limits the number of TANF recipients who may get work credit through participation in education and training. No more than 30% of TANF families who are counted as engaged in work may consist of people who are participating in vocational educational training. Vocational educational training is the only creditable work activity not explicitly confined to high school dropouts.

Finding and Creating Jobs for TANF Recipients

Job availability is one of the most difficult challenges facing states in moving recipients to work from welfare. While the national unemployment rate fell from a high of 7.5% in 1992 to 4% in 2000, it then began to rise again, hitting 6% in 2003. In 2006 it had fallen again to 4.6% ("Annual Average Unemployment Rate, Civilian Labor Force 16 Years and Over," U.S. Department of Labor, Bureau of Labor Statistics, February 6, 2007, http://www.bls.gov/cps/prev_yrs.htm). However, even in times of low national unemployment, unemployment in some areas of the country might be much higher, and the skill level of unemployed people may not match the skills required for available jobs. Welfare recipients often lack job skills and work experience. If suitable jobs cannot be found, states must create work-activity placements and may use TANF block grant funds to do so.

Welfare agencies have had to change their focus and train staff to function more as job developers and counselors than as caseworkers. They make an initial assessment of recipients' skills as required by TANF. They may then develop personal responsibility plans for recipients, identifying what is needed (for example, training, job-placement services, and support services) to move them into the workforce.

States have developed a variety of approaches to finding and creating job opportunities. Although most rely on existing unemployment offices, many states have tried other options to help recipients find work:

  • Collaboration with the business community to develop strategies that provide recipients with the skills and training employers want
  • Use of several types of subsidies for employers who hire welfare recipients directly (subsidizing wages, providing tax credits to employers, and subsidizing workers' compensation and unemployment compensation taxes)
  • Targeting state jobs for welfare recipients
  • Financial encouragement for entrepreneurship and self-employment
  • Creation of community service positions, often within city departments, such as parks and libraries (recipients usually participate in this workfare as a condition of continuing to receive benefits rather than wages)

The results of these efforts to find welfare recipients work have been mixed. The Urban Institute reports that in fact, TANF agencies have built relationships with outside agencies in order to fulfill work program requirements, especially with nonprofit agencies; however, building partnerships with the for-profit business community occurred much less often. In addition, local TANF agencies rarely built partnerships with state agencies, but they did involve community-based nonprofit agencies, workforce development agencies, and occasionally other public agencies, like the public school system, in order to find jobs for welfare recipients. However, not all local TANF agencies made even these connections (Karin Martinson and Pamela A. Holcomb, "Reforming Welfare: Institutional Change and Challenges," The Urban Institute, July 2002, http://www.urban.org/url.cfm?ID=310535). In addition, at times of a slower economy, like in the early 2000s, fewer jobs existed for former welfare recipients (Pamela J. Loprest, "Fewer Welfare Leavers Employed in Weak Economy," The Urban Institute, August 2003, http://www.urban.org/url.cfm?ID=310837).

In Building an Employment Focused Welfare System: Work First and Other Work-Oriented Strategies in Five States (June 1998, http://www.urban.org/UploadedPDF/WORKFST.PDF), Pamela A. Holcomb et al. offer in-depth comparative analyses of how well states are adapting to work-oriented welfare systems. This study of five selected states shows that strategies to promote employment, supported by a strong economy, were effective in moving significant numbers of welfare recipients into jobs. Holcomb et al.'s report is based on site visits in early 1997 to Indiana, Massachusetts, Oregon, Virginia, and Wisconsin, states that have experienced large caseload declines. These five states had begun reorganizing their welfare systems to emphasize a work-first approach before Congress passed the 1996 welfare reform law.

According to Holcomb et al., typical practices in all five states included:

  • Making the job search the first and major activity
  • Restricting participation in education and training
  • Imposing stricter participation and work requirements
  • Enforcing heavy penalties for noncompliance
  • Setting time limits on assistance

Nonetheless, despite the similarities, each state had its own unique plan for welfare reform. For instance, Virginia gave recipients the greatest opportunity to combine assistance with employment but also imposed harsh penalties for noncompliance. Both Virginia and Massachusetts required work sooner than the other states and depended heavily on community-service programs to engage recipients in some form of work. Of the states studied, Oregon had developed the most successful program for creating subsidized job opportunities for welfare recipients.

However, Holcomb et al. warn that a work-first approach alone cannot help all welfare recipients. It works best for individuals who are already fairly employable. It is less effective in helping those with significant barriers to employment or in helping recipients stay employed. After tracking a sample of recipients over a one-year period, Holcomb et al. find that, by the end of that year, 31% to 44% of the participants were still receiving cash assistance or were back on welfare, whether they had a job or not.

Norma B. Coe et al., in Does Work Pay? A Summary of the Work Incentives under TANF (December 1998, http://www.urban.org/UploadedPDF/anf28.pdf), look at the welfare-to-work program from the point of view of a benefit recipient. They find that the nation's social service system provides incentive for a single mother with two children to work, even at minimum wage. By supplementing her wage with tax credits, food stamps, and other available public assistance, a single mother can raise her family's income to 120% of the poverty level. However, because of decreasing public programs available to her if she earned more, that same mother would have little incentive to try to increase her earnings to $9 per hour.

States are now turning their attention to the needs of those with barriers to employment, including health problems, low educational and skill levels, difficulties speaking English, substance abuse, mental health problems, and victimization by domestic violence. These are people who require intensive supportive services to obtain employment and for whom a work-first approach is not appropriate.

In "Welfare Reform Mostly Worked" (July 24, 2005, http://www.urban.org/publications/900824.html), Olivia A. Golden, the assistant secretary for children and families in the HHS under President Bill Clinton, presents her thoughts concerning welfare reform. She believes the welfare-to-work model "mostly worked" in the sense that welfare caseloads have dropped and that most low-income parents are now working to support their families. However, even though welfare-to-work was successful, its success brought about additional problems. She states that "in less than a decade, welfare has faded as a means of support for impoverished families. Many of these families are working long hours despite low wages, shrinking health-insurance coverage and serious trade-offs between work and decent care for their children. Yet, neither our politics nor our policies have adjusted to our success at bringing more of these parents into the labor force."

In Assessing the New Federalism, Eight Years Later (2005, http://www.urban.org/UploadedPDF/311198_ANF_EightYearsLater.pdf), Golden identifies many successes of the welfare-to-work policies, including the increase in the percentage of welfare recipients who worked rising from 22% in 1997 to 33% in 1999, while declining as a result of a weaker economy in the early twenty-first century; the rise in work activity among those most likely to use welfare, namely single mothers with a high school education or less; the finding that employers were willing to hire welfare recipients; the fact that most families that left welfare had at least one working adult; and that about one-third of former welfare recipients who worked had health insurance benefits. However, there were also some problems, including that roughly 25% of those who left welfare were back on assistance two years later. In addition, many welfare recipients face multiple barriers to working that need to be addressed.

Support Services Necessary for Moving Recipients to Work

CHILD CARE

The offer of affordable child care is one critical element in encouraging low-income mothers to seek and keep jobs. In Child Care Subsidies and TANF, Holcomb et al. note that "child care is a key work support that can help those leaving cash assistance for work keep their jobs and avoid returning to welfare." According to Karen Schulman and Helen Blank, in Child Care Assistance Policies 2005: States Fail to Make Up Lost Ground, Families Continue to Lack Critical Supports (September 2005, http://www.nwlc.org/pdf/ChildCareSubsidyReport_September2005.pdf), child care for one child costs from $4,000 to $10,000 per year. In other words, child care for one child, at a minimum, would consume more than a third of the income of a family with one adult working full time and earning the minimum wage. As such, subsidies are essential.

The 1996 welfare reform law created a block grant to states for child care. The amount of the block grant was equivalent to what states received under the AFDC. However, states that maintain the amount that they spent for child care under the AFDC are eligible for additional matching funds. The block grant and the supplemental matching funds are referred to as the Child Care Development Fund (CCDF). In addition, states were given the option of transferring some of their TANF funds to the CCDF or spending them directly on child care services. The Urban Institute reports in the fact sheet "Government Work Supports and Low-Income Families: Facts and Figures" (July 2006, http://www.urban.org/UploadedPDF/900981_worksupports.pdf) that the amount allocated for child care through the CCDF and TANF tripled between 1996 and 2002, from $4 billion to $12 billion.

Because states may use TANF funds for child care, they have more flexibility than before to design child care programs, not only for welfare recipients but also for working-poor families who may need child care support to continue working and stay off welfare. States determine who is eligible for child care support, how much those parents will pay (often using a sliding fee scale), and the amount a state will reimburse providers of subsidized care. Children under the age of thirteen are eligible for child care subsidies; depending on the state, families with incomes from 111% to 287% of the federal poverty level in 2005 were eligible, although few states guaranteed payments to all eligible families. For example, the Urban Institute notes in "Government Work Supports and Low-Income Families" that in 2005 twenty states either had waiting lists or had stopped taking applications for child care subsidies.

The Administration for Children and Families reports in the "FFY 2005 CCDF Data Tables" (November 29, 2006, http://www.acf.hhs.gov/programs/ccb/data/ccdf_data/05acf800/list.htm) that in FY 2005 states provided child care subsidies to approximately 1.8 million low-income children in one million families. Approximately 73% of the children were cared for in child care centers or licensed family child care homes. The remaining 27% of children were cared for in more informal settings, including arrangements with friends and relatives. Despite the dramatic increase in the provision of child care to low-income families, many eligible families were still not receiving assistance. About one in five (19%) families served nationally were receiving TANF assistance.

TRANSPORTATION AND ACCESS TO JOBS

According to the U.S. Department of Transportation (DOT), in "Use of TANF, WtW, and Job Access Funds for Transportation" (1998, http://www.fta.dot.gov/printer_friendly/grants_financing_3715.html), transportation is another critical factor facing welfare recipients moving into a job. Recipients without a car must depend on public transportation. Yet two out of three new jobs are in suburban areas, often outside the range of public transportation, whereas three out of four welfare recipients live in rural areas or central cities. Even when jobs are accessible to public transportation, many day care centers and schools are not. Some jobs require weekend or night shift work, when public transportation schedules are limited. Even for those recipients with cars, the expense of gas and repairs can deplete earnings.

To promote employment, the vehicle asset limits under TANF are broader than under the AFDC. Even though each state has the flexibility to determine its own vehicle asset level, all states have chosen to increase the limit for the value of the primary automobile in the family beyond that set under the AFDC. Over half the states now have no limits on the value of one vehicle, while many other states have raised the vehicle asset limit.

The DOT notes that states use a variety of approaches to provide transportation for TANF recipients moving into the workforce, such as:

  • Reimbursing work-related transportation expenses (automobile expenses or public transportation)
  • Providing financial assistance in the form of loans or grants to purchase or lease an automobile
  • Filling transit service gaps, such as new routes or extended hours
  • Providing transit alternatives, such as vanpools or shuttle services
  • Offering entrepreneurial opportunities for recipients to become transportation providers
  • Transferring TANF funds to the Social Services Block Grant to develop the transportation infrastructure for the working poor in rural areas and inner cities

UNEMPLOYMENT COMPENSATION

To qualify for unemployment compensation benefits, an unemployed person usually must have worked recently for a particular employer for some period and for a certain amount of pay. Almost all wage and salary workers and most of the civilian labor force are covered by unemployment insurance. Most of those not covered were people who were self-employed, agricultural or domestic workers, certain alien farm workers, and railroad workers (who have their own unemployment program).

According to the Unemployment Insurance Chart-book (March 5, 2007, http://www.doleta.gov/unemploy/chartbook.cfm), the U.S. Department of Labor's Employment and Training Administration indicates that even though most wage and salary workers were covered in 2006 by the unemployment compensation insurance system, only 35% of unemployed workers received unemployment benefits.

Unemployment compensation varies widely by state. Figure 3.3 shows the percentages of unemployed receiving benefits in each state in 2003. The states with the highest rates of those receiving unemployment compensation were Pennsylvania and Massachusetts; South Dakota and New Mexico had the lowest rates.

Even though the maximum a state may offer is thirty-nine weeks of coverage (except for special programs), all states provide up to twenty-six weeks of benefits, except Massachusetts and Washington, which offer thirty weeks. Benefits vary dramatically from state to state. In 2002 the average weekly benefits in Massachusetts ($357), New Jersey ($336), Rhode Island ($336), Minnesota ($321), and Colorado ($302) were significantly higher than those offered by Puerto Rico ($108), Alabama ($182), Mississippi ($186), Louisiana ($192), Alaska ($194), and Arizona ($195). (See Table 3.5.)

Unemployment insurance helps workers avoid poverty. In Is the Unemployment Insurance System a Safety Net for Welfare Recipients Who Exit Welfare for Work? (June 2001, http://wdr.doleta.gov/conference/pdf/rangarajan.pdf), Anu Rangarajan, Walter Corson, and Robert G. Wood find evidence that the unemployment insurance system was protecting low-wage workers following the enactment of welfare reform in 1996. After examining a group of former welfare recipients who exited welfare between July 1997 and June 1998, Rangarajan, Corson, and Wood find that between 50% and 60% of people leaving welfare for work were eligible for unemployment insurance, compared with 20% to 35% found in earlier studies. Nonetheless, almost 40% of those who left welfare for work were ineligible for benefits. Some of those who left the welfare rolls were ineligible for benefits because they quit their jobs. This study was conducted during a strong economic period, and more research is needed to determine whether unemployment insurance provides a safety net to low-wage workers and those leaving welfare during periods of slower economic growth and recessions.

The unemployment rate of African-American and Hispanic workers is higher than that of white and Asian workers. In 2005 the unemployment rate for white male workers aged sixteen years and over was 4.4% and for Asian male workers of the same age was 4%, compared with 10.5% for African-Americans and 5.4% for Hispanics. (See Table 3.6.) Single men and women have a higher unemployment rate than others. The unemployment rate for single women in 2005 was 8.3%, compared with 5.4% for widowed, divorced, or separated women and 3.3% for married women; the unemployment rate for single men in 2005 was 9.5%, compared with 5.6% of widowed, divorced, or separated men and 2.8% for married men.

FEDERAL MINIMUM WAGE

The federal minimum wage dates back to the passage of the Fair Labor Standards Act of 1938, which established basic national standards for minimum wages, overtime pay, and the employment of child workers. The provisions of the act have been extended to cover many other areas of employment since 1938.

TABLE 3.5
Amount and duration of weekly benefits for total unemployment under regular state programs, by state, 2005
State or area Average weekly benefit for total unemployment Average weekly insured unemployment Average actual duration (weeks)
Amount (dollars)a Percent of average weekly wagesb
   Total 266.62 34.6 2,661,400 15.3
Alabama 182.01 27.9 27,911 11.5
Alaska 193.91 25.8 12,443 14.3
Arizona 194.76 26.8 29,157 15.6
Arkansas 229.61 38.7 27,743 13.9
California 277.46 31.4 362,655 17.4
Colorado 301.77 38.2 25,197 13.9
Connecticut 295.42 29.0 39,624 16.7
Delaware 247.47 28.9 8,151 16.6
District of Columbia 266.67 22.7 4,529 19.5
Florida 226.35 32.3 88,748 15.2
Georgia 244.65 33.0 53,727 11.5
Hawaii 337.42 49.8 6,258 14.1
Idaho 235.25 40.3 13,131 12.7
Illinois 285.38 34.1 136,324 18.2
Indiana 278.07 41.1 54,078 13.0
Iowa 271.26 42.9 24,444 12.5
Kansas 278.47 43.2 20,002 15.3
Kentucky 259.56 40.2 30,330 13.5
Louisiana 192.29 30.2 65,746 12.5
Maine 240.24 38.9 10,683 14.8
Maryland 256.64 31.2 35,939 15.3
Massachusetts 356.64 37.2 82,111 17.9
Michigan 290.13 36.7 139,408 14.3
Minnesota 321.59 41.2 46,797 15.0
Mississippi 186.34 33.2 28,814 11.3
Missouri 205.79 30.1 50,455 15.4
Montana 220.58 40.5 7,436 14.9
Nebraska 225.65 36.6 11,917 13.7
Nevada 258.31 34.9 18,479 13.9
New Hampshire 252.12 32.5 6,550 11.8
New Jersey 336.04 35.5 113,897 18.1
New Mexico 217.70 35.8 11,792 17.5
New York 276.05 27.7 190,686 18.0
North Carolina 257.71 37.6 76,893 12.9
North Dakota 238.41 42.1 3,466 12.1
Ohio 260.99 36.7 100,554 15.2
Oklahoma 221.49 37.2 16,877 15.2
Oregon 261.26 37.5 45,526 15.2
Pennsylvania 291.89 38.6 167,857 16.6
Rhode Island 336.42 45.8 12,400 15.5
South Carolina 216.66 34.6 38,468 13.7
South Dakota 211.49 38.5 2,597 12.3
Tennessee 212.11 31.1 43,657 13.7
Texas 261.34 34.1 127,933 14.2
Utah 263.37 41.9 10,606 12.7
Vermont 267.14 41.1 6,222 13.6
Virginia 245.74 31.1 31,305 12.5
Washington 296.86 38.3 58,771 14.7
West Virginia 225.12 38.4 13,964 15.0
Wisconsin 252.82 37.2 72,716 13.3

The first minimum wage instituted in 1938 was $0.25 an hour. Over the years it gradually increased, reaching $4.25 in 1991. In July 1996 Congress passed legislation that raised the minimum wage to $5.15 in 1997 by means of two $0.45 increases. (See Table 3.7.) In 2007 the mini-mum wage was still $5.15, although twenty-nine states had minimum wage rates higher than the federal rate. Kansas had a minimum wage rate lower than the federal rate for the few jobs not covered by the federal minimum wage. It is worth noting that the minimum wage is a cash wage only and includes no health care or other fringe benefits that higher paid workers typically enjoy.

TABLE 3.5
Amount and duration of weekly benefits for total unemployment under regular state programs, by state, 2005 [continued]
State or area Average weekly benefit for total unemployment Average weekly insured unemployment Average actual duration (weeks)
Amount (dollars)a Percent of average weekly wagesb
aIncludes dependents' allowances for states that provide such benefits.
bBased on average total weekly wage in current year.
Source: Adapted from "Table 9.A2. Summary Data on State Programs, by State or Other Area, 2005," in Annual Statistical Supplement, 2006, Social Security Administration, 2007, http://www.ssa.gov/policy/docs/statcomps/supplement/2006/9a.html#table9.a2 (accessed January 11, 2007)
Wyoming Outlying areas 241.52 38.6 2,791 11.8
Puerto Rico 108.28 25.1 43,118 18.3
Virgin Islands 237.00 37.6 517 16.1

The minimum wage remained unchanged from 1981 to 1990. When inflation is taken into account, the minimum wage actually decreased in value by about $2. The increases in 1996 and 1997 still left the real value of the minimum wage well below the 1978 value. (See Figure 3.4.) A person working forty hours per week for fifty weeks per year at minimum wage ($5.15 per hour) would gross $206 per week, or $10,300 per year, well below the poverty level for a family of three ($16,600 in 2007). (See Table 1.1 in Chapter 1.) For adults, this means that day laborers (those without a permanent job who look for a job every day) and those employed in many service jobs for minimum wages will not be able to earn enough to escape from poverty.

In January 2007 the U.S. House of Representatives overwhelmingly passed a measure to increase the minimum wage from $5.15 per hour to $7.25 per hour, offering hope that the minimum wage would be increased for the first time in a decade. The Senate approved the measure in February but also called for tax breaks for small businesses. As of spring 2007, the measure still required reconciliation between the House and the Senate.

Who Works for Minimum Wage?

After the recession of 199091 and the slow recovery in 1992, 4.2 million workers in 1993 earned the minimum wage or less. In 1996 nearly ten million workers were directly affected by the minimum-wage increase. Often, employers use the minimum wage as a standard for low-paying jobs, perhaps paying $1 or $2 above minimum wage for a particular job.

TABLE 3.6
Unemployed persons by marital status, race, ethnicity, age, and sex, 200405
Marital status, race, Hispanic or Latino ethnicity, and age Men Women
Thousands of persons Unemployment rates Thousands of persons Unemployment rates
2004 2005 2004 2005 2004 2005 2004 2005
Note: Estimates for the above race groups (white, black or African American, and Asian) do not sum to totals because data are not presented for all races. In addition, persons whose ethnicity is identified as Hispanic or Latino may be of any race and, therefore, are classified by ethnicity as well as by race. Beginning in January 2005, data reflect revised population controls used in the household survey.
Source: "24. Unemployed Persons by Marital Status, Race, Hispanic or Latino Ethnicity, Age, and Sex," in Household Data Annual Averages, Bureau of Labor Statistics, 2006, http://www.bls.gov/cps/cpsaat24.pdf (accessed January 11, 2007)
   Total, 16 years and over 4,456 4,059 5.6 5.1 3,694 3,531 5.4 5.1
Married, spouse present 1,466 1,287 3.1 2.8 1,244 1,168 3.5 3.3
Widowed, divorced, or separated 608 563 6.3 5.6 828 768 5.9 5.4
Single (never married) 2,381 2,209 10.5 9.5 1,621 1,595 8.7 8.3
White, 16 years and over 3,282 2,931 5.0 4.4 2,565 2,419 4.7 4.4
Married, spouse present 1,161 1,011 2.9 2.5 996 922 3.3 3.0
Widowed, divorced, or separated 466 415 5.9 5.0 600 548 5.5 4.9
Single (never married) 1,655 1,505 9.1 8.2 969 949 7.1 6.8
Black or African American, 16 years and over 860 844 11.1 10.5 868 856 9.8 9.5
Married, spouse present 200 177 5.6 5.1 149 144 5.3 5.2
Widowed, divorced, or separated 104 119 8.9 9.5 179 166 7.8 7.3
Single (never married) 556 548 18.2 16.9 540 546 14.4 13.9
Asian, 16 years and over 153 141 4.5 4.0 124 118 4.3 3.9
Married, spouse present 64 61 2.9 2.7 62 62 3.4 3.3
Widowed, divorced, or separated 14 11 5.8 3.6 24 23 6.3 5.5
Single (never married) 75 68 7.8 7.2 39 32 5.6 4.5
Hispanic or Latino ethnicity, 16 years and over 755 647 6.5 5.4 587 544 7.6 6.9
Married, spouse present 275 231 4.4 3.6 228 202 6.2 5.4
Widowed, divorced, or separated 85 69 5.8 4.5 130 103 7.9 6.2
Single (never married) 394 347 10.3 8.7 229 239 9.6 9.8
   Total, 25 years and over 2,980 2,617 4.4 3.8 2,531 2,453 4.4 4.2
Married, spouse present 1,399 1,232 3.1 2.7 1,139 1,071 3.3 3.1
Widowed, divorced, or separated 584 538 6.2 5.5 781 730 5.7 5.3
Single (never married) 997 848 8.0 6.6 611 651 6.3 6.4
White, 25 years and over 2,225 1,929 3.9 3.4 1,773 1,699 3.8 3.6
Married, spouse present 1,108 966 2.8 2.5 911 845 3.1 2.9
Widowed, divorced, or separated 447 395 5.7 4.9 563 519 5.3 4.8
Single (never married) 670 567 7.0 5.7 299 335 4.6 4.9
Black or African American, 25 years and over 545 507 8.4 7.6 589 568 7.9 7.5
Married, spouse present 191 170 5.5 5.0 141 133 5.2 4.9
Widowed, divorced, or separated 101 113 8.8 9.2 172 160 7.7 7.2
Single (never married) 253 223 13.5 11.1 276 275 11.1 10.4
Asian, 25 years and over 117 102 3.9 3.3 93 102 3.7 3.8
Married, spouse present 63 61 2.9 2.7 55 60 3.1 3.3
Widowed, divorced, or separated 13 11 5.7 3.6 21 23 5.9 5.5
Single (never married) 41 30 6.6 5.0 17 19 4.2 4.5
Hispanic or Latino ethnicity, 16 years and over 477 401 5.1 4.1 408 372 6.6 5.8
Married, spouse present 253 214 4.2 3.5 202 174 5.9 5.0
Widowed, divorced, or separated 75 63 5.5 4.4 121 98 7.8 6.1
Single (never married) 149 124 7.4 5.7 84 99 6.8 7.7

Even though workers must receive at least the minimum wage for most jobs, there are some exceptions in which a person may be paid less than the minimum wage. Full-time students working on a part-time basis in the service and retail industries or at the student's academic institution, certain disabled people, and workers who are "customarily and regularly" tipped may receive less than the minimum wage.

According to the U. S. Department of Labor's Bureau of Labor Statistics, in Characteristics of Minimum Wage Workers: 2004 (April 2005, http://www.bls.gov/cps/minwage2004pdf.pdf), approximately 2 million American workers are paid at or below the minimum wage. Most of those who work for the minimum wage or below (74.6%) are employed in the service sector. About two-thirds (1.3 million out of two million, or 66.1%) of minimum-wage workers in 2004 were women, whereas 1.2 million of two million workers (61.9%) who earned minimum wage or less were part-time workers. (See Table 3.8.) White workers predominate among minimum-wage workers; 1.7 million of two million workers were white (83.9%), 250,000 were Hispanic (12.5%), 227,000 were African-American (11.3%), and 38,000 were Asian (1.9%).

TABLE 3.7
Federal minimum wage rates under the Fair Labor Standards Act, selected years 193897
Effective date 1938 acta 1961 amendmentsb 1966 and subsequent amendmentsc
Nonfarm Farm
aThe 1938 act was applicable generally to employees engaged in interstate commerce or in the production of goods for interstate commerce.
bThe 1961 amendments extended coverage primarily to employees in large retail and service enterprises as well as to local transit, construction, and gasoline service station employees.
cThe 1966 amendments extended coverage to state and local government employees of hospitals, nursing homes, and schools, and to laundries, dry cleaners, and large hotels, motels, restaurants, and farms. Subsequent amendments extended coverage to the remaining federal, state and local government employees who were not protected in 1966, to certain workers in retail and service trades previously exempted, and to certain domestic workers in private household employment.
dGrandfather clause: employees who do not meet the tests for individual coverage, and whose employers were covered by the Fair Labor Standards Act (FLSA), on March 31, 1990, and fail to meet the increased annual dollar volume (ADV) test for enterprise coverage, must continue to receive at least $3.35 an hour.
eA subminimum wage$4.25 an houris established for employees under 20 years of age during their first 90 consecutive calendar days of employment with an employer.
Source: "Federal Minimum Wage Rates under the Fair Labor Standards Act," U.S. Department for Labor, Employment Standards Administration, http://www.dol.gov/esa/minwage/chart.htm (accessed January 11, 2007)
Oct. 24, 1938 $0.25
Oct. 24, 1939 $0.30
Oct. 24, 1945 $0.40
Jan. 25, 1950 $0.75
Mar. 1, 1956 $1.00
Sept. 3, 1961 $1.15 $1.00
Sept. 3, 1963 $1.25
Sept. 3, 1964 $1.15
Sept. 3, 1965 $1.25
Feb. 1, 1967 $1.40 $1.40 $1.00 $1.00
Feb. 1, 1968 $1.60 $1.60 $1.15 $1.15
Feb. 1, 1969 $1.30 $1.30
Feb. 1, 1970 $1.45
Feb. 1, 1971 $1.60
May 1, 1974 $2.00 $2.00 $1.90 $1.60
Jan. 1, 1975 $2.10 $2.10 $2.00 $1.80
Jan. 1, 1976 $2.30 $2.30 $2.20 $2.00
Jan. 1, 1971 $2.30 $2.20
Jan. 1, 1978 $2.65 for all covered, nonexempt workers
Jan. 1, 1979 $2.90 for all covered, nonexempt workers
Jan. 1, 1980 $3.10 for all covered, nonexempt workers
Jan. 1, 1981 $3.35 for all covered, nonexempt workers
Apr. 1, 1990d $3.80 for all covered, nonexempt workers
Apr. 1, 1991 $4.25 for all covered, nonexempt workers
Oct. 1, 1996e $4.15 for all covered, nonexempt workers
Sept. 1, 1997 $5.15 for all covered, nonexempt workers

SUPPLEMENTAL SECURITY INCOME

SSI is a means-tested income assistance program authorized by Title XVI of the Social Security Act. The SSI program replaced the combined federal-state programs of Old Age Assistance, Aid to the Blind, and Aid to the Permanently and Totally Disabled in fifty states and the District of Columbia. However, these programs still exist in the U.S. territories of Guam, Puerto Rico, and the Virgin Islands. Since the first payments in 1974, SSI has provided monthly cash payments to needy aged, blind, and disabled individuals who meet the eligibility requirements. States may supplement the basic federal SSI payment.

A number of requirements must be met to get financial benefits from SSI. First, a person must meet the program criteria for age, blindness, or disability. The aged, or elderly, are people sixty-five years old and older. To be considered legally blind, a person must have vision of 20/200 or less in the better eye with the use of corrective lenses, have tunnel vision of twenty degrees or less (can only see a small area straight ahead), or have met state qualifications for the earlier Aid to the Blind program.

A person is disabled if he or she cannot earn money at a job because of a physical or mental illness or injury that may cause his or her death, or if the condition lasts for twelve months or longer. Those who met earlier state Aid to the Permanently Disabled requirements may also qualify for assistance.

Children under the age of eighteen (or age twenty-two if a full-time student) and unmarried may qualify for SSI if they have a medically determinable physical or mental impairment that substantially reduces their ability to function independently as well as effectively engage in age-appropriate activities. This impairment must be expected to last for a continuous period of more than twelve months or to result in death.

Because SSI is a means-tested benefit, a person's income and property must be counted before he or she can receive benefits. In The Green Book (2003, http://waysandmeans.house.gov/media/pdf/greenbook2003/Section3.pdf), the Committee on Ways and Means of the U.S. House of Representatives indicates that in 2003 individuals and couples receiving Social Security benefits could not earn more than $572 and $849 per month, respectively. In addition, in 2003 a person could have no more than $2,000 worth of property, and a couple could have no more than $3,000 worth of property (mainly in savings accounts or stocks and bonds). Not included in countable resources are the person's home, as well as household goods and personal effects worth less than $2,000. The first $4,500 of the fair market value of a car is not counted. A car is not counted at all if a member of the household uses it to go to and from work or to medical treatments or if it has been adapted for a disabled person. Someone applying for SSI may have life insurance with a cash value of $1,500 or less and/or a burial policy up to the same value.

Recipients of SSI Benefits

The Social Security Administration's Office of Research, Evaluation, and Statistics reports in Fast Facts and Figures about Social Security (September 2006, http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2006/fast_facts06.pdf) that 7.1 million people received SSI payments in December 2005. Of these, 82% were disabled, 17% were elderly, and 1% were blind. (See Figure 3.5.) Most of those receiving SSI were between the ages of eighteen and sixty-four (57%). Between 1974 and 2004 the number of elderly recipients declined, whereas the number of disabled recipients increased. Table 3.9 shows the annual amount of payments by source of payment and category from 1974 through 2004. About half48.4%of SSI recipients in 2004 were female; 51.6% were male. (See Table 3.10.)

TAX RELIEF FOR THE POOR

Both conservatives and liberals hailed the Tax Reform Act of 1986 as a major step toward relieving the tax burden of low-income families, one group of Americans whose wages and benefits have been eroding since 1979. The law enlarged and inflation-proofed the Earned Income Tax Credit (EITC), which provides a refundable tax credit that both offsets taxes and often operates as a wage supplement. Only those who work can qualify. The amount is determined, in part, by how much each qualified individual or family earned. It is also adjusted to the size of the family. To be eligible for the family EITC, workers must live with their children, who must be under nineteen years old or full-time students under twenty-four years old.

The maximum credit for 2005 was $2,662 for taxpayers with one child, $4,400 for taxpayers with more than one child, and $399 for people with no children. (See Figure 3.6.) Families received less if their income was low because they were also eligible for public assistance. A family of four received the maximum benefit if its earnings were slightly below the poverty line, but many families well above the poverty line received some credit. Single-parent families with one child were eligible for some credit up to an income of $31,030, whereas single-parent families with at least two children were eligible for some credit up to an income of $35,263. Benefits phased down gradually when income surpassed $15,000 and phased out entirely for single-parent families with two or more children that earned more than $35,000.

TABLE 3.8
Workers paid hourly rates at or below minimum wage, by selected characteristics, 2004
Characteristic Number of workers (in thousands) Percent distribution Percent of workers paid hourly rates
Total paid hourly rates At or below $5.15 per hour Total paid hourly rates At or below $5.15 per hour At or below $5.15 per hour
Total At $5.15 Below $5.15 Total At $5.15 Below $5.15 Total At $5.15 Below $5.15
Note: Data exclude all the self-employed, both unincorporated and incorporated.
aDetail for the race groups (white, black or African American, and Asian) will not sum to totals because data are not presented for all races. In addition, persons whose ethnicity is identified as Hispanic or Latino may be of any race and, therefore, are classified by ethnicity as well as race.
bThe distinction between full- and part-time workers is based on hours usually worked. These data will not sum to totals because full- or part-time status on the principal job is not identifiable for a small number of multiple jobholders.
Source: "Table 1. Employed Wage and Salary Workers Paid Hourly Rates with Earnings at or Below the Prevailing Federal Minimum Wage by Selected Characteristics, 2004 Annual Averages," in Characteristics of Minimum Wage Workers: 2004, U.S. Department of Labor, Bureau of Labor Statistics, April 2005, http://www.bls.gov/cps/minwage2004pdf.pdf (accessed January 11, 2007)
Age and sex
Total, 16 years and over 73,939 2,003 520 1,483 100.0 100.0 100.0 100.0 2.7 0.7 2.0
    16 to 24 years 16,174 1,022 272 750 21.9 51.0 52.3 50.6 6.3 1.7 4.6
    16 to 19 years 5,433 497 168 329 7.3 24.8 32.3 22.2 9.1 3.1 6.1
    25 years and over 57,765 982 249 733 78.1 49.0 47.9 49.4 1.7 0.4 1.3
Men, 16 years and over 36,806 680 210 470 49.8 33.9 40.4 31.7 1.8 0.6 1.3
    16 to 24 years 8,305 366 127 239 11.2 18.3 24.4 16.1 4.4 1.5 2.9
    16 to 19 years 2,672 179 78 101 3.6 8.9 15.0 6.8 6.7 2.9 3.8
    25 years and over 28,500 314 83 231 38.5 15.7 16.0 15.6 1.1 0.3 0.8
Women, 16 years and over 37,133 1,323 310 1,013 50.2 66.1 59.6 68.3 3.6 0.8 2.7
    16 to 24 years 7,869 655 145 510 10.6 32.7 27.9 34.4 8.3 1.8 6.5
    16 to 19 years 2,761 319 90 229 3.7 15.9 17.3 15.4 11.6 3.3 8.3
    25 years and over 29,265 668 166 502 39.6 33.3 31.9 33.9 2.3 0.6 1.7
Race, sex and Hispanic or Latino ethnicity
Whitea 59,877 1,681 395 1,286 81.0 83.9 76.0 86.7 2.8 0.7 2.1
    Men 30,255 554 161 393 40.9 27.7 31.0 26.5 1.8 0.5 1.3
    Women 29,621 1,126 234 892 40.1 56.2 45.0 60.1 3.8 0.8 3.0
Black or African Americana 9,417 227 99 128 12.77 11.3 19.0 8.6 2.4 1.1 1.4
    Men 4,243 89 40 49 5.7 4.4 7.7 3.3 2.1 0.9 1.2
    Women 5,174 138 59 79 7.0 6.9 11.3 5.3 2.7 1.1 1.5
Asiana 2,672 38 8 30 3.6 1.9 1.5 2.0 1.4 0.3 1.1
    Men 1,295 15 3 12 1.8 0.7 0.6 0.8 1.2 0.2 0.9
    Women 1,378 23 5 18 1.9 1.1 1.0 1.2 1.7 0.4 1.3
Hispanic or Latinoa 12,073 250 82 168 16.3 12.5 15.8 11.3 2.1 0.7 1.4
    Men 7,183 98 32 66 9.7 4.9 6.2 4.5 1.4 0.4 0.9
    Women 4,890 151 49 102 6.6 7.5 9.4 6.9 3.1 1.0 2.1
Full-and part-time status and sex
Full-time workersb 55,739 760 177 583 75.4 37.9 34.0 39.3 1.4 0.3 1.0
    Men 30,951 300 77 223 41.9 15.0 14.8 15.0 1.0 0.2 0.7
    Women 24,788 460 100 360 33.5 23.0 19.2 24.3 1.9 0.4 1.5
Part-time workersb 18,046 1,240 343 897 24.4 61.9 66.0 60.5 6.9 1.9 5.0
    Men 5,770 378 132 246 7.8 18.9 25.4 16.6 6.6 2.3 4.3
    Women 12,276 861 210 651 16.6 43.0 40.4 43.9 7.0 1.7 5.3

The largest EITC benefits go to families that no longer need welfare. The gradual phaseout and the availability of the EITC at above-poverty income levels help to stabilize a parent's employment by providing additional money to cover expenses associated with working, such as child care and transportation. Research finds that the EITC has been an effective work incentive and has significantly increased work participation among single mothers. The Urban Institute states in "Government Work Supports and Low-Income Families" that eight out of ten low-income working families are eligible to receive the tax credit and that the EITC is the support program with the highest participation rate.

Those who do not owe income tax, or who owe an amount smaller than the credit, receive a check directly from the Internal Revenue Service for the credit due them. Most recipients claim the credit when they file an income tax form. Robert Greenstein concludes in "The Earned Income Tax Credit: Boosting Employment, Aiding the Working Poor" (August 17, 2005, http://www.cbpp.org/7-19-05eic.htm) that the EITC lifted 4.4 million people, including 2.4 million children, out of poverty in 2003. Without the credit, the poverty rate among children would have been almost 25% higher.

Although the Tax Reform Act of 1986 has helped ease the burden of federal taxes, most of the poor still pay a substantial share of their income in state and local taxes. To relieve this tax burden and increase the number of single parents working, eighteen states have enacted a state EITC to supplement the federal credit. These state programs boost the income of families that move from welfare to work and prevent states from taxing poor families deeper into poverty.

OVERLAPPING SERVICES

Not surprisingly, poor households that receive one form of social welfare assistance are likely to qualify for and receive others. For example, during 2002, 37.6% of households receiving TANF also received housing assistance, 62.3% received free or reduced-price school meals, 80.8% received food stamps, and almost all (99.6%) were on Medicaid. (See Table 3.11.) Similarly, among households receiving SSI, 40.2% received food stamps, 17.7% received free or reduced-price school meals, 22.9% lived in public or subsidized rental housing, and 96.4% were on Medicaid. About 18.2% of those receiving Social Security and 17.8% of people receiving Medicare were also on Medicaid.

Among households receiving food stamps, 16.2% received TANF, 30.2% received SSI, 30.5% received Social Security, and 26% were on Medicare. (See Table 3.12.) (The figures do not add up to 100% because some people received more than one benefit.) About 10.8% of those receiving WIC also received TANF benefits.

Between 1984 and 2002 the percentage of AFDC/TANF and SSI households who received other benefits fluctuated, but, generally, the coverage for most nonveteran benefit programs increased initially but then declined following the passage of the PRWORA in 1996. The percentage of households receiving both AFDC/TANF and food stamps declined, from 87.2% in 1995 to 80.8% in 2002. (See Table 3.13.) The percentage receiving both SSI and food stamps also declined over this period, from 50% to 40.2%.

In "Government Work Supports and Low-Income Families," the Urban Institute points out how important the "package of supports" could be to working, low-income families. The package could include Medicaid, food stamps, child care subsidies, and the EITC. According to the Urban Institute, in 2002 a single parent with two children working full time and earning $10,000 (the minimum wage) could receive about $23,600 in work supports. However, most working families did not receive all the supports they could have; in fact, only 7% of families with incomes below the federal poverty level received all four supports in 2002.

TABLE 3.9
Total annual amount of SSI payments, by source of payment and eligibility category, selected years 19742004
[In thousands of dollars]
Year Total Federally administered Federal SSI State supplementation
Total Federally administered State administereda
aIncludes data not distributed by category.
bRevised data.
Note: SSI is Supplemental Security Income.
Source: "Table 7.A4. Total Payments, by Eligibility Category and Source of Payment, Selected Years 19742004," in Annual Statistical Supplement to the Social Security Bulletin, 2005, Social Security Administration, Office of Policy, Office of Research, Evaluation, and Statistics, February 2006, http://www.ssa.gov/policy/docs/statcomps/supplement/2005/supplement05.pdf (accessed January 11, 2007)
All recipients
1974 5,245,719  5,096,813  3,833,161 1,412,558 1,263,652 148,906
1975 5,878,224  5,716,072  4,313,538 1,564,686 1,402,534 162,152
1980 7,940,734  7,714,640  5,866,354 2,074,380 1,848,286 226,094
1985 11,060,476 10,749,938  8,777,341 2,283,135 1,972,597 310,538
1990 16,598,680 16,132,959 12,893,805 3,704,875 3,239,154 465,721
1995 27,627,658 27,037,280 23,919,430 3,708,228 3,117,850 590,378
2000 31,564,439 30,671,699 27,290,248 4,274,191 3,381,451 892,740
2001 33,060,819 32,165,856 28,705,503 4,355,316 3,460,353 894,963
2002 34,566,844 33,718,999 29,898,765 4,668,079 3,820,234 847,845
2003 35,604,829 34,693,278 30,688,029 4,916,800 4,005,249 911,551
2004 36,961,099 36,065,358 31,886,509 5,074,590 4,178,849 895,741
Aged
1974 2,503,407  2,414,034  1,782,742 720,665 631,292 89,373
1975 2,604,792  2,516,515  1,842,980 761,812 673,535 88,277
1980 2,734,270  2,617,023  1,860,194 874,076 756,829 117,247
1985 3,034,596  2,896,671  2,202,557 832,039 694,114 137,925
1990 3,736,104  3,559,388  2,521,382 1,214,722 1,038,006 176,716
1995 4,467,146  4,239,222  3,374,772 1,092,374 864,450 227,924
2000 4,811,048  4,537,914  3,595,384 1,225,603 942,530 283,073
2001 4,958,644  4,664,076  3,708,527 1,250,117 955,549 294,568
2002 5,085,554  4,802,792  3,751,491 1,334,063 1,051,301 282,762
2003 5,147,380  4,856,875  3,758,070 1,389,310 1,098,805 290,505
2004 5,173,378  4,894,070  3,773,901 1,399,477 1,133,324 266,153
Blind
1974 130,195   125,791    91,308 38,887 34,483 4,404
1975 130,936   127,240    92,427 38,509 34,813 3,696
1980 190,075   185,827   131,506 58,569 54,321 4,248
1985 264,162   259,840   195,183 68,979 64,657 4,322
1990 334,120   328,949   238,415 95,705 90,534 5,171
1995 375,512   367,441   298,238 77,274 69,203 8,071
2000 394,484   385,832   312,144 82,324 73,688 8,636
2001 407,371   398,624   323,895 83,476 74,729 8,747
2002 426,409   416,454   335,405 91,004 81,049 9,955
2003 419,352   409,293   325,878 93,473 83,415 10,058
2004 421,817   412,414   327,446 94,371 85,364 9,007
Disabled
1974 2,601,936  2,556,988  1,959,112 642,824 597,876 44,948
1975 3,142,476  3,072,317  2,378,131 764,345 694,186 70,159
1980 5,013,948  4,911,792  3,874,655 1,139,293 1,037,137 102,156
1985 7,754,588  7,593,427  6,379,601 1,374,987 1,213,826 161,161
1990 12,520,568 12,244,622 10,134,007 2,386,561 2,110,615 275,946
1995 22,778,547 22,430,612 20,246,415 2,532,132 2,184,197 347,935
2000 26,189,350 25,764,675 23,399,442 2,844,868 2,365,233 479,635
2001 27,611,303 27,125,707 24,695,630 2,915,673 2,430,077 485,596
2002 28,996,405 28,499,771b 25,811,887b 3,184,518 2,687,884 496,634
2003 29,966,210 29,429,428b 26,606,400b 3,359,810 2,823,028 536,782
2004 31,257,856 30,745,406 27,785,246 3,472,610 2,960,160 512,450
TABLE 3.10
Number and percentage distribution of federally administered awards, by sex, age, and eligibility category, 2004
Sex and age Total Adults Blind and disabled childrena
Aged Blind Disabled
Note:not applicable.
aIncludes students aged 18-21.
bLess than 0.05 percent.
Source: "Table 7.E2. Percentage Distribution of Federally Administered Awards, by Sex, Age, and Eligibility Category, 2004," in Annual Statistical Supplement to the Social Security Bulletin, 2005, Social Security Administration, Office of Policy, Office of Research, Evaluation, and Statistics, February 2006, http://www.ssa.gov/policy/docs/statcomps/supplement/2005/supplement05.pdf (accessed January 11, 2007)
All persons
Number 856,190 105,850 4,070 558,850 187,420
Percent 100.0 100.0 100.0 100.0 100.0
Percentage distribution by sex
Male 51.6 37.6 55.8 49.6 65.1
Female 48.4 62.4 44.2 50.4 34.9
Percentage distribution by age
Under 5 8.3 38.0
5-9 5.8 26.5
10-14 5.2 23.6
15-17 2.0 9.2
18-21 5.4 15.0 7.3 2.8
22-29 6.2 15.5 9.4
30-39 10.5 14.7 16.0
40-49 17.8 17.9 27.1
50-59 20.6 24.3 31.3
60-64 5.6 7.9 8.5
65-69 6.9 54.2 1.7 0.3
70-74 2.6 21.2 1.0 b
75-79 1.5 11.8 1.0 b
80 or older 1.6 12.9 1.0 b
Male
Number 441,560 39,790 2,270 277,420 122,080
Percent 100.0 100.0 100.0 100.0 100.0
Under 5 9.8 35.6
5-9 8.1 29.2
10-14 6.7 24.4
15-17 2.3 8.4
18-21 5.9 15.0 8.3 2.4
22-29 6.5 15.9 10.2
30-39 9.9 16.3 15.6
40-49 16.9 15.9 26.8
50-59 19.5 25.6 30.8
60-64 5.1 8.8 8.0
65-69 5.3 56.6 1.8 0.3
70-74 2.1 22.8 0.9 b
75-79 1.0 11.4 b b
80 or older 0.8 9.1 b b
Female
Number 414,630 66,060 1,800 281,430 65,340
Percent 100.0 100.0 100.0 100.0 100.0
Under 5 6.7 42.4
5-9 3.4 21.3
10-14 3.5 22.1
15-17 1.7 10.7
18-21 4.9 15.0 6.3 3.5
22-29 5.9 15.0 8.6
30-39 11.2 12.8 16.4
40-49 18.8 20.6 27.5
50-59 21.7 22.8 31.8
60-64 6.1 6.7 9.4
65-69 8.6 52.7 1.7 0.4
70-74 3.2 20.2 1.1 b
75-79 1.9 12.0 2.2 b
80 or older 2.4 15.1 2.2 b
TABLE 3.11
Percent of recipients in multiple federal assistance programs, 2002
Other assistance programs Ways and Means assistance programs
TANF SSI Social Security Unemployment compensation Medicare
Notes: Table shows number of recipient households for February-May 2002. Tables read that 80.8 percent of households with TANF (Temporary Assistance for Needy Families) recipients also received food stamp benefits. SSI is Supplemental Security Income. WIC is Women, Infants and Children. VA is Veteran Affairs.
Source: "Table 15. Overview 1. Percent of Recipients in Programs within the Jurisdiction of the Committee on Ways and Means Receiving Assistance from Other Major Federal Programs, 2002," in The Green Book, U.S. House of Representatives, Committee on Ways and Means, 2004, http://waysandmeans.house.gov/media/pdf/greenbook2003/15OVERVIEW.pdf (accessed January 11, 2007)
Food stamps 80.8 40.2 6.7 10.6 6.3
WIC 35.1 5.2 1.2 8.4 0.8
Medicaid 99.6 96.4 18.2 23.5 17.8
Free or reduced-price school meals 62.3 17.7 4.3 16.1 3.0
Public or subsidized rental housing 37.6 22.9 5.6 3.0 5.6
VA compensation or pensions 1.0 3.6 4.6 1.4 4.8
Number of recipients in households receiving benefits (in thousands) 1,393 5,207 31,358 3,209 28,452
TABLE 3.12
Recipients of federal assistance programs receiving aid from multiple programs, by percent and number, 2002
Ways and Means assistance programs Other assistance programs
Food stamps WIC Free or reduced-price school meals Public or subsidized rental housing Medicaid VA compensation or pensions
Note: Table shows number of recipient households for February-May 2002. Tables read that 16.2 percent of households with food stamp recipients also received TANF (Temporary Assistance for Needy Families). WIC is Women, Infants and Children. VA is Veteran Affairs. SSI is Supplemental Security Income.
Source: "Table 15. Overview 2. Percent of Recipients in Other Major Federal Assistance Programs Receiving Assistance Under Programs within the Jurisdiction of the Committee on Ways and Means, 2002," in The Green Book, U.S. House of Representatives, Committee on Ways and Means, 2004, http://waysandmeans.house.gov/media/pdf/greenbook2003/15OVERVIEW.pdf (accessed January 11, 2007)
TANF 16.2 10.8 9.0 10.9 8.0 0.6
SSI 30.2 6.0 9.6 24.8 29.0 7.0
Social Security 30.5 8.1 13.9 36.9 32.9 54.4
Unemployment compensation 4.9 6.0 5.4 2.0 4.4 1.7
Medicare 26.0 5.1 9.0 33.5 29.2 52.3
Number of recipients in households receiving benefits (in thousands) 6,924 4,517 9,620 4,795 17,322 2,639
TABLE 3.13
Percent of households receiving TANF or SSI and also receiving assistance from other programs, selected years, 19842002
Assistance program 1984 1987 1990 1992 1993 1994 1995 199798 2002
Note: Data on households interviewed between February and May 2002. AFDC/TANF is Aid to Families with Dependent Children/Temporary Assistance for Needy Families. WIC is Women, Infants and Children. VA is Veteran Affairs. SSI is Supplemental Security Income
Source: "Table 15. Overview 3. Percent of Households Receiving TANF or SSI and Also Receiving Assistance from Other Programs, Selected Years, 19842002," in The Green Book, U.S. House of Representatives, Committee on Ways and Means, 2004, http://waysandmeans.house.gov/media/pdf/greenbook2003/15OVERVIEW.pdf (accessed January 11, 2007)
AFDC/TANF:
Food stamps 81.4 81.7 82.7 86.2 88.9 88.3 87.2 81.0 80.8
WIC 15.3 18.6 18.7 21.5 18.5 21.4 24.7 30.6 35.1
Free or reduced-price school meals 49.2 55.6 52.7 55.5 56.9 57.5 63.1 60.3 62.3
Public or subsidized rental housing 23.0 19.4 34.7 29.5 33.1 30.3 31.1 21.2 37.6
Medicaid 93.2 95.5 97.6 96.2 97.6 96.4 97.2 97.3 99.6
VA compensation or pensions 2.8 1.9 1.3 1.9 1.1 1.1 0.8 1.1 1.0
Number of households receiving benefits (in thousands) 3,585 3,527 3,434 4,057 4,831 4,906 4,652 3,008 1,391
SSI:
Food stamps 46.5 39.7 41.3 46.2 48.0 50.1 50.0 43.7 40.2
WIC 2.5 2.5 3.0 4.3 3.7 5.4 5.6 5.5 5.2
Free or reduced-price school meals 12.7 11.9 15.3 18.2 21.3 23.8 25.2 18.4 17.7
Public or subsidized rental housing 21.6 20.0 21.4 23.8 23.9 24.9 24.1 23.4 22.9
Medicaid 100.0 99.6 99.7 99.8 99.5 100.0 100.0 95.0 96.4
VA compensation or pensions 4.7 7.7 5.7 4.0 4.5 3.9 3.6 2.8 3.6
Number of households receiving benefits (in thousands) 3,008 3,341 3,037 3,957 3,861 4,223 4,580 4,772 5,207

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"Public Programs to Fight Poverty." Social Welfare: Fighting Poverty and Homelessness. 2008. Encyclopedia.com. 25 Jun. 2016 <http://www.encyclopedia.com>.

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"Public Programs to Fight Poverty." Social Welfare: Fighting Poverty and Homelessness. 2008. Retrieved June 25, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3049500009.html