The causes of poverty in the United States of America are multi-faceted. Factors for poverty include labor market issues such as job unavailability and wages paid, education, demographic characteristics such as age and family structure, race, cultural factors and poverty-related policies. The American government has been on the forefront in combating poverty among its citizens. Through federal and state government efforts, initiatives to create a U.S. social safety net aimed at reducing poverty have been crafted. They include policies and public assistance programs such as cash welfare programs. These government efforts, however, have elicited debates surrounding their effectiveness, or its lack thereof, in addressing poverty.
Among the social assistance initiatives to combat poverty was the Aid to Families with Dependent Children (AFDC) program. This program came into existence in 1935 as a grant program aiming to facilitate state provision of cash welfare payments to needy children lacking parental support. In this plan, the federal government guaranteed aid to anyone who qualified and there were no waiting lists. Spending in this program rose to correspond with rising needs and there existed a uniform grant system in which for every fifty cents spent, the states received one dollar in return from the federal government.
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Various issues surrounded AFDC program. Among them were issues of racial representation where some groups claimed to be underrepresented in favor of others. The AFDC was also perceived by twenty-five percent of the population to be laden with rampant cases of fraud. Later year investigations, however, revealed that only a paltry zero point six percent of the population misreported information to benefit in the form of greater allocations from the program. It was also commonly perceived that AFDC beneficiaries would squander their benefits on drugs and alcohol. Factually, however, the rates of alcohol and drug use among the AFDC dependents was comparable to the national population.
Another of the plans adopted by the government to improve the lives of American citizens was the Great Societies Programs credited to former U.S. President Johnson in which he declared war on poverty in his state of the nation address in 1964. The programs aimed to end poverty and injustice by promoting opportunity for all American citizens. Among these initiatives was the Economic Opportunity Act of 1964 which paved the way for the creation of other programs such as the Job Corps and Upward Bound. Through the Social Act of 1965, Medicare program, for citizens above the age of sixty-five years, and Medicaid program, for low-income citizens below the age of sixty-five, were initiated to make healthcare more affordable. Also enacted as part of the Great Societies Programs was the food subsidy efforts through the Food Stamp Program funded by the federal government and administered by the states.
In 1996, the AFDC program was substituted with the Personal Responsibility & Work Opportunity Reconciliation Act of 1996 (PRWORA). The PROWRA set a precedent for the establishment of a cash welfare grant named Temporary Assistance for Needy Families (TANF) program whose fundamental features were time limits, work requirements and block grants. TANF's beneficiaries were accorded a lifetime limit of five years for the reception of federal funds assistance for families with an adult. Other key provisions of the TANF included increased work participation rates to be met by states on a mandatory basis, and flexibility on states’ design of the program.
Beneficiaries were required to participate in some work activity, failure to which they would be sanctioned and their benefits reduced or eliminated. States were obligated to ensure that fifty percent of the beneficiaries were engaged in some work activity for at least thirty hours weekly to be eligible for the block grant under the TANF. Additionally, states were allowed to decide exemptions as well as fund beneficiaries beyond the five years' limit with their own money.
Other PRWORA Components included a reduction in incentives for no marital childbearing. The PRWORA also banned aid to any unmarried teens unless they were in school attendance. Under the family caps provision, states were at liberty to deny increasing benefits to households that had additional children. It also awarded performance bonuses to states to encourage a reduction of the percentage of non-marital birth without increasing abortion rates. Mixed reactions emerged from this welfare plan, with opponents positing that the program would hurt needy children while its proponents opined that the welfare plan was, in fact, liberating its recipients.
The PRWORA occasioned different outcomes in regards to income, poverty and extreme poverty. Categorical eligibility under TANF led to reduced participation. Among the TANF recipients, income levels rose. In 1997, the median income was seven thousand one hundred and seventy-six thousand dollars, while in the year 2012, the median income rose to eleven thousand eight hundred and twenty dollars. Regarding poverty, only slight improvements were realized considering that sixty-nine percent of the recipients still lived in poverty by 2012.
Concerning employment, two-thirds of those who left the welfare plan after the expiration of their valid time for the reception of benefits were employed according to states records. In times of recession, however, this figure dropped to less than half of the former beneficiaries. Fifteen percent of the leavers were disconnected in the sense that they neither had cash benefits nor employment. For former recipients who had young children and a low level of education, employment outcomes were worse. After leaving the welfare, many previous beneficiaries encountered an array of barriers to employment including mental and physical health issues, transportation challenges and inadequate childcare.
Farther complicating the TANF plan is the fact that its former beneficiaries were vulnerable to labor market conditions. For those who secured employment, it was often unstable employment. Only a small number of TANF leavers were able to sustain full-time employment for a year and beyond. Only about thirty-five and forty percent of the leavers managed to work for a whole year. A significant number, about thirty percent, returned to TANF within one year of leaving the welfare program. On the part of the states, as caseloads reduced, their channeling of resources moved away from benefit payments to work support.
Presently, the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is the most significant anti-hunger program in the U.S. Eligible beneficiaries' gross monthly income should be one hundred and thirty percent below the federal poverty line. Recipients must also participate in employment or job training. Able-bodied adults without dependents (ABAWDs) are limited to three months of benefits unless they are working at least twenty hours weekly. Debates around the SNAP include what foods can be purchased, especially in the face of rising obesity rates. In line with this, there have been numerous proposals to restrict unhealthy food purchases while improving access to healthy foods.
Through income support programs, various gains have been made towards combating poverty in America including continual increases in employment levels relative to previous years, especially among women. However, welfare reforms have increased social assistance spending while shifting money from non-workers to workers, therefore discouraging work rather than encouraging it in various instances. Consequently, income support programs are unlikely to reduce poverty level because the benefit levels are too low to significantly increase a household’s income from below to above the poverty line. Nonetheless, these programs reduce extreme poverty and are therefore useful components of government efforts in the war on poverty.
