Attachments

8.1 state comparison chart.pdf

Does welfare trap people in poverty and keep them from pursuing gainful employment? To U.S. Rep. Paul Ryan, of Wisconsin, who outlined a new proposal last week that he said is geared to fight poverty and encourage work, the answer to this is self-evident.

For Rep. Ryan and his fellow conservatives, it’s been an article of faith for years that if you provide assistance to the poor, it saps them of their motivation to work and keeps them from ever emerging from their poverty.

Of course, public policy that affects peoples’ lives should be based on facts and data, not on faith or ideology. So if welfare actually discourages people from working and keeps them mired in poverty, couldn’t we find data to either support or discredit that hypothesis?

Keep in mind that many state governments in the U.S. already subscribe to the ideas and policies endorsed by Rep. Ryan. All across the South, from Arizona to Georgia, are states that have adopted this philosophy, instituting strict limits on benefits, denying Medicaid expansion, and offering some of the lowest welfare payments in the country. A poor family in South Carolina, for example, qualifies for a monthly payment under Temporary Assistance to Needy Families (TANF), which replaced AFDC back in 1996, of $216. In Mississippi, that same family would get a monthly check for just $170.

By contrast, states such as Minnesota provide substantially more assistance. In Minnesota, the average family on TANF receives a check for $532, and plenty of other states, mostly in the northern and western parts of the country, pay even more. One of the most generous states, surprisingly, is New Hampshire, where the typical family receives TANF support of $675 a month.

If Rep. Ryan’s hypothesis were valid, these differences in state-by-state approaches to welfare would provide some evidence for it. You would anticipate that states with the most restrictive welfare system and lowest payments would show a reduced poverty rate (since its residents would be less likely to become mired in a poverty lifestyle) and higher participation in the labor force.

Fortunately, that data is actually available, and it tells an interesting story. I looked up the 15 states with the lowest TANF benefits (which provide an average monthly payment of $254 for a single parent with two children) and the 15 states with the highest benefits, which pay an average of $639 a month. I also looked up their overall poverty rates, as well as their overall rate of labor force participation.

Here’s what I found:

‰ The states that paid the lowest welfare benefits had substantially higher poverty rates than those that were most generous— an average of 15.0 percent of people in poverty versus an average of 10.38 percent.

To some extent this could be a reflection of the fact that more generous welfare payments actually help to lift more families out of poverty. And that should be fairly obvious. If you provide people with more money, they have more of it, and that makes them less poor. But if that’s true, than it’s false to claim that anti-poverty programs encourage more poverty. From the available data, they reduce poverty. Claiming otherwise, as does Rep. Ryan, substitutes ideology for evidence.

‰ The states that pay the lowest welfare benefits have fewer people participating in the workforce than in states that are more generous. This data, which comes from the Bureau of Labor Statistics, is perhaps the most telling, and it all but destroys the myths purported by Rep. Ryan and his supporters. If, as Rep. Ryan insists, welfare “disincentivizes” (his word) work, then states with more generous welfare payments should have fewer people choosing to work.

But the data shows exactly the opposite.

In the 15 states with the lowest welfare payments, workforce participation ranged from 57.2 percent in Alabama to 65.3 percent in Texas, and averaged 62.0 percent.

By contrast, in the 15 states with the most generous TANF payments, workforce participation ranged from a low of 61.4 percent in New York, to 71.2 percent in both Minnesota and South Dakota, and averaged 67.12 percent. These are significant differences, well outside any margin of sampling error.

It’s worth noting that Minnesota— long known for fairly generous welfare payments— not only has the highest workforce participation rate, it also has the third-lowest poverty rate, at just 8.1 percent. Only New Hampshire and Vermont had lower rates of poverty.

There’s no doubt that many factors contribute to these outcomes in the various states. I don’t believe that a state’s poverty rate, or its workforce participation rate, is directly linked to the generosity of its welfare system. Yet a state’s generosity towards the poor is generally a reflection of that state’s overall policies regarding economic opportunity. With only a few exceptions, the most generous states are dominated by Democrats. Of the 15 most generous states, only four —Alaska, Wyoming, South Dakota, and Montana— would be considered reliably red states, with virtually all of the rest reliably blue, or purple. And those state’s generally perform better on a whole host of economic indicators.

Among those states with the least generous TANF payments, all but Delaware are reliably red states, and virtually all pursue conservative economic policies. What’s disturbing is that Rep. Ryan must certainly be aware of such statistics. Yet he and his fellow conservatives continue to pursue policies that he undoubtedly understands lead to greater poverty and fewer economic opportunities for the poor.

To be fair, Rep. Ryan’s latest proposal isn’t entirely wrongheaded. He’s right that welfare should be less restrictive and more individualized, since each family in need faces a different set of challenges. Unfortunately, over the years, it’s been conservatives who have consistently pushed for more prescriptive welfare policies that have made it harder for people to transition off of welfare through work.

Rep. Ryan’s proposal, which includes block granting all federal welfare funding and letting states spend it how they choose, might actually work well in progressive states, like Minnesota, where greater flexibility would likely be used to enhance services to struggling families.

But the evidence strongly suggests that flexibility would be used primarily to further punish the poor in Republican-dominated states, and further undermine their futures.

We’ve already seen that with the Medicaid expansion under the Affordable Care Act. When the Supreme Court invalidated the law’s Medicaid expansion mandate, giving states the flexibility to block the additional help for its low-income residents, almost every state controlled by Republicans immediately rejected the expansion, a decision that has collectively denied millions of low income Americans access to decent medical coverage. It also cost their states billions in federal health care funding— dollars that would have created thousands of quality jobs in the healthcare sector, and further enhanced economic opportunity for their citizens.

For conservatives, such punitive actions are invariably undertaken for political and ideological reasons. But it’s time they recognize that ideology divorced from evidence is just dogma, and that public policy based on dogma rarely achieves beneficial results. Simply punishing the poor in hopes they’ll go away isn’t an anti-poverty strategy. It’s delusion.

Data and evidence, which constitute reality in a rational world, aren’t liberal conspiracies— they are useful tools for understanding how the world actually works. Rep. Ryan and his followers need to put aside ideology and start looking at the world as it really is, not as they wish it to be.