Equal Time: To help single mothers, strengthen welfare reform
April 1, 2003

By June O'Neill - For the Journal-Constitution

Ever since federal welfare reform was enacted in 1996, critics have argued that the enormous decrease in the number of welfare recipients masks the larger problem of single mothers forced off welfare and into dead-end, low-paying jobs, and into poverty as a result.

With Congress debating renewal of the 1996 law, and the number of recipients failing to rise even in the midst of a recession, this basic claim has become the focal point of opposition to reform.

The picture painted by critics is, quite simply, inaccurate, as research I conducted for a Manhattan Institute study clearly shows. In fact, since welfare reform was enacted, single mothers' poverty rates have reached record lows, and their employment rates and incomes have surged.

Even more encouraging, single mothers' poverty rates fell and wages increased steadily the longer they stayed in the work force.

While the continued plight of many single mothers should not be understated, it is disingenuous to ignore the remarkable gains that have been made in recent years. Since 1996, the poverty rate of single-mother families declined by roughly 20 percent, from 41.9 percent to 33.6 percent in 2001.

Moreover, the reduction extended to groups that traditionally have had the highest poverty rates, such as high school dropouts, black and Hispanic mothers, and never-married mothers. A dramatic decline of this kind in the poverty rate for single mothers has no precedent in the past four decades.

The decline in poverty has been matched by a rise in single mothers' incomes, which jumped 21 percent between 1995 and 2000, even after adjusting for inflation. The average hourly wage of a single mother in 2001 was $11.60, well above the minimum wage, and only 4 percent of single mothers earned the minimum wage or less.

Perhaps the most important new piece of evidence for the success of welfare reform concerns the changes seen by women who leave welfare. Not only do they experience a drop in the prevalence of poverty, but this decline also grows the longer they remain off welfare.

The poverty rate for single mothers who left welfare in 1996, for example, fell by 50 percent in four years. In addition, among single mothers who left welfare after 1994, each additional year in the work force between 1994 and 1998 was associated with an increase in hourly pay of about 2 percent after inflation, and each year with the same employer increased pay by another 1 percent.

None of this is meant to suggest that no problems remain. The number of single mothers and their families living in poverty remains unacceptably high and continues to present a policy challenge. But the proper direction is to strengthen welfare reform, not weaken it.

Welfare reform has been a great success because it radically changed the incentive structure of the old Aid for Families with Dependent Children program, which encouraged welfare participation and discouraged work. By reinforcing the key elements of welfare reform --- time limits and strict work requirements --- we can continue to improve the opportunities of disadvantaged young women, who before reform would have been predisposed to early childbearing, early school leaving and welfare dependence.

Welfare reform has made it more difficult to take that destructive path and has given those already on it a second chance.

June O'Neill, former director of the Congressional Budget Office, is Wollman professor of economics at the Zicklin School of Business and director of the Center for the Study of Business and Government at Baruch College, City University of New York.

©2003 Atlanta Journal Constitution