Is a Generation Gap to Blame for the Failure of Welfare?

After reading the extensive article on welfare last weekend by Jason Deparle, I kept wondering “What if?”  The biggest “what if” I kept returning to was: what if government policy toward the poor had actually evolved when the economy changed?

The article explains the ins and outs of welfare statistics and anyone who reads it can plainly see the welfare reform that occurred in 1996 did not fix welfare and in fact only worked to cover up the problem of poverty in the United States.  That “reform” only worked in that it dropped people from the rolls at a time when the economy was booming and unemployment was low.  Now that unemployment is high and has been for some time, the failure of that reform is clear.  But the question here is, why wasn’t the reform done in a way that would actually reflect the changes in the economy?

Welfare dates back to the New Deal and was expanded during the 1960s.  As time passed, the economy changed but the policy stagnated and we reached the unique decade of the 1990s where the criticism of it reached a boiling point.  We should keep in mind the milieu of the economy during these different times.  When welfare began and was expanded, women were less likely to be in the workforce, minimum wage was higher relative to living costs, a college education was not mandatory for a career (a strong manufacturing sector had a lot to do with this), health care costs relative to pay were lower, and transportation costs were lower for most prior to the boom of the suburbs.  Then came the 1996 “reform”…

I think one important factor in this reform is the vast majority (and really all) of the people in the government making these changes mostly grew up in an economy with those conditions.  But things were changing and changing fast in the ’90s economy, particularly with the technology boom.  So was Newt Gingrich and Bill Clinton’s answer when changing the policy to alter it in a way that reflected the changing economy?  No.  Their answer was to make it worse.

Their answer was that people should pull themselves up with little to no help no matter what their situation in life.  This was far easier when they were growing up and it is no surprise they would believe it to be so easy.  Minimum wage covered much more of one’s daily cost of living and a person could “get by” on it much easier compared to today’s reality where that is not the case and hasn’t been for a few decades.  Women were not as independent and have entered the labor force at higher rates since the early ’70s so there are more total workers for a finite number of jobs.  Post-high school education was not mandatory to support a family but has now become much more of a requirement and has become more expensive as the cost has exceeded the rate of inflation tremendously.  And so on…

So the people who grew up in one economy changed the welfare policy of a different economy but based those changes on the world they grew up in and not the world they were living at the time.  Which brings us to today and the stories of people in poverty having to resort to awful options to keep themselves going.

What if welfare “reform” had actually been reform?  What if a policy was put in place to make post-high school education essentially free for those on the rolls so they had a better shot at employment getting them off welfare?  What if child care was subsidized so a single mother or father could more easily work a job and/or go to school while having their children looked after?  What if the minimum wage had increased at a more reasonable rate so it was actually a minimum living wage and could better buffer people when they are between good jobs?  What if our mass transit system was better and opened up more options for people seeking employment but unable to drive a car across town for various reasons?

To some extent, the problem with welfare reform may have simply been timing.  It could easily be argued it might have come out differently if it were done during this extended recession.  Whatever the case, it was done and it was done badly and the environment the generation who reformed it grew up in may have had a lot to do with its failure.  This isn’t to say old age means bad ideas and is useless in governing.  But it is easy to see the cause and effect of a potential generation gap in this particular situation.

The policy needs to be updated and evolved but there is little talk of this that makes it into the mainstream media these days.  Our options seem to be limited between the two parties.  Option A is the Democrats wanting to continue a bad policy.  Option B is the Republicans wanting to make matters worse by killing it all together.  Can we please get an option C?

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