BEYOND THE NUMBERS
After Welfare Reform, the Poorest Families Had More Trouble Paying Bills
[S]uggestive evidence that material hardship — in the form of difficulty meeting essential household expenses, and falling behind on utilities costs — has generally increased among the deeply poor but has remained roughly the same for the middle group (50-99 percent of poverty), and decreased among the near poor (100-150 percent of poverty).Not surprisingly, these hardships appear to be sensitive to business cycles. Hardship rates among the deeply poor improved, for example, from 1992 to 1995, when the economy was growing. But they worsened sharply from 2003 to 2005 — perhaps due to delayed effects of the 2001 recession compounded by the weakened safety net, the authors suggest. Shaefer and Ybarra say their findings support their hypothesis that “the well-being of the deeply poor decreased substantially following the first economic slowdown after the 1990s welfare reforms. In contrast, the well-being of the near poor improved through 2005.” They caution that studies that consider the poor as a single group may miss these diverging effects of welfare reform. These conclusions make sense because “welfare reform,” in a broad sense, was not just one policy but many. In general, working families received more help after the mid-1990s than before — for example, in the form of higher Earned Income Tax Credits or child care assistance. Yet, families who lost jobs or could not find steady work generally fared worse — they lost access to cash assistance and often could not qualify for the new work-based tax credits and other work supports. The study adds to the evidence that economic vulnerability at the very bottom of the economic ladder has grown since the federal government weakened the safety net in the 1990s.