Did Welfare Reform Work?
By Great post by Brad Plumer on the subject of the 1996 welfare reform bill. The key point is that most assertions that welfare reform has “worked” reference nothing more than the fact that fewer people on welfare. And as Brad notes, this is just a tautology; fewer people receiving welfare benefits isn’t a test of whether the policy worked; it was the policy. It’s like saying that the Medicare drug plan “worked” because, in fact, more government money went to pharmaceutical companies. The meaningful test is whether the policy was better for poor people, and as Brad notes on that score the evidence that the reform has been effective is scant-to-nonexistent: even people who got jobs aren’t making more money on average, poverty rates have stayed the same despite considerable economic growth, and children aren’t faring noticeably better either. While it may have been a political success, as policy while it hasn’t been catastrophic it also hasn’t been effective.
His punchline is worth quoting as well:
Many liberals will say that welfare reform can and will be a stunning success story if only we increase the Earned-Income Tax Credit and raise the minimum wage and provide heaps more funds for child care and heaps more money for job-training and so on. Well, no kidding. Cup Noodle makes a great meal if it comes with a side of steak. If people are going to be forced to work then the government should make work pay. If society isn’t willing to do this, then cash assistance is the way to go.
It may be that indirect subsidies and tax credits are more viable politically than welfare payments, and perhaps they’re even better policy. But welfare reform won’t be effective until the government gets more serious about providing the funds.