We Have Blown a Huge Hole in Our Safety Net

By PETER EDELMAN, professor of law, Georgetown Law Center, and faculty director, Georgetown Center on Poverty, Inequality, and Public Policy. His most recent book is So Rich, So Poor: Why It’s So Hard to End Poverty in America. He has served in all three branches of the federal government.

In our rich nation, one-third of American citizens—106 million people—have incomes below twice the poverty line, which is just $46,000 for a family of four. Why? And why are they disproportionately women, children, and people of color?

Look back to the early 1970s, when America seemed to be heading in the right direction. We had cut poverty almost in half, to the low rate of 11.1 percent. Of course, the hot economy helped, as did programs from the War on Poverty and changes from the civil rights movement, which resulted in large employment gains for African Americans.

What happened later was mostly unforeseeable. Globalization and new technology started destroying the industrial jobs that had built the middle class. Unions began to lose members. The minimum wage stagnated. Family structures changed, creating a much larger cohort of single mothers coping in the job market by themselves. Urban school systems declined in quality. The concentration of poverty in inner-city areas—already a problem in the 1960s—got far worse. Immigration—especially illegal immigration—flooded the labor market with people willing to work for low wages. The ugly politics of race continued, especially in relation to welfare and crime; drug laws and racialized law enforcement targeted African American and Latino men for incarceration. And as the number of people who fell into poverty grew and grew, inequality spectacularly widened, with the fruits of economic growth going to those at the very top.

But in spite of what conservative politicians and commentators say, the problem is not that the poor prefer to depend on public benefits rather than go to work. Neither is it an undue use of public benefits. These shopworn accusations persist, but they were false from the start.

The truth is that 68 percent of children who are poor live in families in which someone does have a job.¹ But often, these jobs pay so little that they don’t lift families out of poverty, or they leave these families living on the brink. Yes, there are other pressing problems: public education, law enforcement policy, a decent safety net, concentrated poverty, and more. But the fundamental problem with regard to poverty and economic insecurity today is the flood of extremely low-wage work that keeps families stuck on the lower rungs.

Half of the jobs in the country pay less than $34,000 per year. A quarter of them pay less than the federal poverty level for a family of four, which is approximately $23,000 per year. While money has poured into the upper reaches of our economy, wages in the lower half are basically stagnant, having increased by a mere 7 percent over the past 40 years—just one-fifth of a percent per year. The people who hold these low-wage jobs are disproportionately women, especially women with children. It’s no wonder that the poverty rate for children who live with single mothers is well over 40 percent, and that four out of five families headed by a single mother live on the financial brink.

Public benefits definitely help. A family with a minimum-wage job holder and two children gets about $5,500 from the earned income tax credit and another $1800 from the child tax credit—nearly a 50 percent increase in income. But we need to do much more, and increasing wages remains at the top of the list. President Barack Obama’s proposal to raise the minimum wage to $9 an hour and index it to inflation would help,² and Congressman George Miller’s proposal to increase it to $10.10 would help even more.³ The Medicaid expansion in the Affordable Care Act is phenomenally important. Increased investments in child care, housing assistance, and help with postsecondary education would all raise incomes too. These policies free up money for families to spend in their local economies.

The space allotted for this essay does not permit a detailed discussion of education, crime policy, and initiatives focused on concentrated poverty, so I will focus on only one more issue: deep poverty—the 20 million people who, according to the Census, have incomes below half of the poverty line, which is below approximately $9,500 per year for a family of three.

Since 1996, we have blown a huge hole in our safety net with the demise of welfare. The federal “reform” enacted that year led to the virtual disappearance of welfare in about half the states. Before then, 68 percent of families with children received income assistance. Now the number is just 27 percent. It is true that the welfare system needed reform, but it is now clearer than ever that the welfare reform of 1996 has trapped millions of women and children not just in poverty but also often in deep poverty—and they cannot get out. Six million people—again, disproportionately women and children—have an income comprised only of food stamps. That is an income of little more than $6,000 per year for a family of three, or just one-third of the income level considered “poverty.”

The large class of people living on the brink is traceable to our economic malaise and the power that some politicians wield in Washington and many states. But our most glaring public policy error is what we have done to the safety net for the most vulnerable women and children in our nation. And our most glaring omission is our failure to address the proliferation of poorly-paid jobs that leave working families struggling. We have a lot of work to do.