Showing the Way to Self-Sufficiency

Tarren Bragdon

Imagine a Midwest adult who had been on food stamps for 22 years. One year after an intervention, her income had almost doubled. Now imagine a woman in that state’s largest city who had been on food stamps for almost five years, with no income. Ninety days after the intervention, she was earning the equivalent of $41,000 a year.

Is this the result of a new welfare training initiative? Not at all; it was a direct result of a policy change quickly getting these people off of welfare. The examples show how to fix America’s stagnant poverty rate. Welfare and poverty, work and upward mobility: It’s really that simple.

While many think of welfare as aid to those who are in poverty, the truth is that welfare pays people not to work. Yet work is the fastest, best, and most lasting way to get out of poverty and become prosperous.

In post–World War II America, record employment and industrialization pulled Americans out of poverty at unprecedented rates, halving the proportion of people in poverty in less than two decades. In a short generation, the rate of adults in poverty went from almost one in three to just one in seven.

Enter Lyndon B. Johnson’s Great Society. Since 1966 — the start of the so-called War on Poverty — America’s poverty rate has remained flat. This was an abrupt halt to the mid-century progress of free markets, American ingenuity, and the increased productivity of the American worker.

Too many people think welfare is bad because it punishes success. They focus on how the alleged welfare cliff punishes hard work by taking people’s welfare benefits away when they work more hours, get a pay raise, or get a new job. But the facts show something much more insidious: Welfare is destructive because it pays people not to work, automatically giving them a check or a benefit every month even if they don’t work — and so they don’t. The evidence is clear.

Take the State of Kansas. Governor Sam Brownback restored work requirements for able-bodied adults on food stamps in 2013. These are adults with no children under 18 and no disabilities. The reform did not affect grandmothers or the disabled.

At the Foundation for Government Accountability, we wanted to see what would happen when programs stopped paying someone not to work. In partnership with the State of Kansas, we tracked all 41,000 people affected by this policy change by matching them person-for-person through the Kansas Department of Labor’s hiring and earnings database for unemployment insurance.

Before work requirements, these adults were receiving almost $200 a month in food stamp benefits whether they worked or not, so most did not work. In fact, only one in five worked. With the policy change, these adults had to work or train for work 20 hours a week.

The results were inspiring. After reform, three in five went to work (most of them immediately); average incomes increased 127 percent; and the average income of those who were working was above the poverty limit. All of this was within 12 months. Welfare enrollment for this category plummeted 70 percent. [1]

The two people highlighted at the beginning of this discussion are real people from Kansas. Moreover, their story is not exceptional. Temporary Assistance for Needy Families (TANF) welfare cash assistance saw similar results in the late 1990s after work requirements and time limits were instituted.

Back then, work requirements and time limits were the bipartisan consensus of Speaker Gingrich and President Clinton’s welfare reform of 1996. Sadly, since the start of this century, we have moved in the opposite direction.

The number of able-bodied adults on food stamps increased to 15.5 million in 2014, tripling from 2000. Most of that increase has been during the Obama Administration (up from 8.7 million in 2008). [2]
The same is true for able-bodied adults on Medicaid (19 million in 2014 from 10.6 million in 2008 and 6.9 million in 2000). This increase is largely a direct result of streamlining the on-ramp to welfare. [3]

Poverty is a tragedy. Welfare traps families in poverty by paying able-bodied adults not to work, but it does not have to be that way.

America could easily repeat the post–World War II success of cutting the poverty rate by half (or more) simply by instituting the common-sense reforms of work requirements and time limits in all welfare programs — from public housing to food stamps to Medicaid. In a few short years, millions would be freed from poverty and give themselves the hope of a better life through a job.

— Tarren Bragdon is President and Chief Executive Officer of the Foundation for Government Accountability.

Next Up in the Poverty and Dependence Section:

Total Welfare Spending

Endnotes

1. Jonathan Ingram and Nic Horton, “The Power of Work — How Kansas’ Welfare Reform Is Lifting Americans Out of Poverty,” Foundation for Government Accountability, February 16, 2016,
http://thefga.org/wp-content/uploads/2016/02/PowerOfWork-KansasWelfareReform.pdf (accessed June 22, 2016).

2. U.S. Department of Agriculture, Food and Nutrition Service, Office of Policy Support, “Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2014,” December 2015, Table 3.5, http://www.fns.usda.gov/sites/default/files/ops/Characteristics2014.pdf (accessed June 14, 2016); U.S. Department of Agriculture, Food and Nutrition Service, Office of Analysis, Nutrition and Evaluation, “Characteristics of Food Stamp Households: Fiscal Year 2000,” October 2001, Table 3.5,
http://www.fns.usda.gov/sites/default/files/2000Characteristics.pdf (accessed June 14, 2016); U.S. Department of Agriculture, Food and Nutrition Service, Office of Policy Support, “Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2008,” September 2009, http://www.fns.usda.gov/sites/default/files/2008Characteristics.pdf (accessed June 14, 2016). Note: The USDA did not report disability status information consistently between 2003 and 2011. Thus, 2008 numbers of able-bodied adults on food stamps are calculated based on other household data, total non-elderly enrollment, and annual growth trends.

3. Centers for Medicare and Medicaid Services, “2014 Actuarial Report on the Financial Outlook for Medicaid, 2014,” Table 15,
https://www.medicaid.gov/medicaid-chip-program-information/by-topics/financing-and-reimbursement/downloads/medicaid-actuarial-report-2014.pdf (accessed June 14, 2016).