1996 Welfare Reform Analysis

As Edin and Shaefer say in $2.00 a Day: Living on Almost Nothing in America, “welfare is dead,” and the cause is the 1996 welfare reform. While welfare is not actually extinct in theory, in practice, the number of people benefiting from welfare has decreased significantly, while the amount of money being spent has increased, proving the ineffectiveness of the current system (Edin, Shaefer 2015: 7-9). The changes made to welfare in 1996 has worked against people unable to find or keep reliable work, meaning that it is generally the poorest of the poor, people without any type of consistent income, who have suffered the most from the welfare reform, because they are unable to benefit from the majority of the programs. The 1996 welfare reform
This shift can be seen in the TANF’s restrictions that encourage people to find jobs as well as another outcome of the 1996 tax reform, the Earned Income Tax Credit (EITC). The EITC provides sizable tax refunds for low income workers. While this program is decidedly beneficially to the working poor, the unemployed cannot benefit from it (Edin, Shaefer 2015: 8). The end of the AFDC combined with the implementation of the TANF and EITC has led to the “unintended consequence” of the rise of extreme poverty (Edin, Shaefer 2015: 158). It turns out that by focusing almost solely on the working poor while making the welfare reforms in 1996, the poorest of the poor, families making less than $2 a day per person, suffered the most. The number of American families surviving on an income of $2 a day has been increasing since 1996, and the cause of this increase can be directly related to the fact that the AFDC “was no longer catching families when they fell” (Edin, Shaefer 2015:
$2 a day references an extremely poor family consisting of a single mom and a teenaged daughter who are “convinced now more than ever that they just aren’t giving out cash at the DHS office anymore” (Edin, Shaefer 2015: 7). Whether this lack of knowledge is intentional or not, it is a fact that only 27 percent of poor families receive welfare from the government (Edin, Shaefer 2015: 7). A possible reason for the lack of participation in TANF is that a “TANF receipt has become rare enough among the poor that it has simply faded from view” (Edin, Shaefer 2015: 33). And it is not just lack of knowledge but also the increased difficulty in receiving welfare for those who know to apply. Often times families feel “deeply reluctant” to apply no matter how poor they are, and of those families who decide to put themselves through the long and tedious process of applying, many are turned away (Edin, Shaefer 2015: