Economics for Today 9th Edition by Irvin Tucker

Exercise 26

PULLING ON THE STRINGS OF THE WELFARE SAFETY NET
Applicable Concept: welfare reform
It may be surprising that welfare reform can be argued to be a success. The number of recipients on welfare has fallen from 12.3 million in 1996 to 4.2 million in 2014. 1. U.S. Census Bureau, Statistical Abstract of the United States , 2014, http://www.census.gov/compendia/statab/, Table 563. In contrast, other entitlement programs, such as SNAP (formerly food stamps), have increased sharply from 17.2 million participants in 2000 to 40.3 million in 2014. 2. Ibid., Table 570. The following is a sampling of articles describing the evolution of welfare after the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
As reported in The Washington Post , Los Angeles County provides a striking contrast of welfare before and after reform in 1996. Prior to 1996, Los Angeles County had a traditional welfare program that provided education and job training without work requirements. After the welfare reform act of 1996, independent researchers found that 43 percent of poor families who were required to participate in the city's new welfare reform program with work requirements got jobs, while only 32 percent of families randomly selected to remain in the traditional welfare program did. This represented an increase of one-third over the old welfare program. The typical welfare family subject to the new reform initiatives earned $1,286 in the first six months of the program, while "control group" families earned $879, a difference of 46 percent.
A 2002 article in the Los Angeles Times concerned the new approach of the federal government providing block grants to states and mandating that the needy find jobs rather than just handing them welfare checks:
Before 1996, when the nation's welfare laws were radically altered, welfare families might have gotten a monthly welfare check for the rest of their lives. Martha Soria's job would have been mostly to shuffle their paperwork. But with welfare reform came time limits on such benefits and strict new work requirements. And while Soria still shuffles a lot of paperwork, her job as well as the jobs of welfare caseworkers across the state and nation have changed. They have had to master hundreds of new rules and regulations under welfare reform and take on new responsibilities as guidance counselor, job finder, cheerleader, and taskmaster.
The following article argues that the states must do more to avoid racial bias:
Under the 1996 law, states have the option to enforce time limits of their choosing. Because of this flexibility, states are left open to discriminate freely. Across the board, race was the determining factor affecting time limit lengths and their application. Observation of the enforcement of time limits shows that states with a higher proportion of African Americans or Latinos possess shorter time limits than the five-year guideline of the law. Over20 states have opted to not allow exemptions to these time limits. Over 50 percent of African American families under welfare are subject to time limits shorter than the federal cutoff, as opposed to 30 percent of whites under welfare.
Reforms continue: A new federal rule in 2008 made it easier for welfare recipients to attend college by counting a year's worth of study, including homework time, as work. And in 2013, a bill was introduced in Congress, but not passed that would require states to randomly drug test people who receive TANF payments. At the state level in 2014, a U.S. Circuit Court of Appeals upheld a lower court ruling that Florida's testing requirement violated the Constitution's ban on unreasonable search. In 2015, at least 12 states have passed legislation requiring drug testing for welfare recipients.
The current approach to welfare reform is to cut the growth of welfare by shifting control from the federal government to the states. The idea is that because state and local officials are closer to the people, welfare programs will improve. Analyze the results presented above based on work disincentives, inefficiencies, and inequities.