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VOL. 23, NO. 2September 12, 1997



Study Predicts Drastic Effects of Welfare Reform: Legislation Will Impoverish Half Million in N.Y. City

Continuation of Home Relief Will Help Some

Garfinkel. Record Photo by Amy Callahan.

By Kim Brockway

Recent federal welfare reform legislation and proposed state welfare reforms may cause more harm than good, having dramatic effects on families with children as well as on childless adults in New York, according to a study issued recently by the New York City Social Indicators Survey Center at Columbia's School of Social Work. The study was conducted by Jane Waldfogel, assistant professor; Irwin Garfinkel, Mitchel Ginsberg Professor of Contemporary Urban Problems, and researcher Patrick Villeneuve.

  Assuming that about 40 percent of those leaving welfare will be able to find work and that the state and city will cover child care costs for these families, the report says that five years from now, when federal reforms are in place, the legislation will:

  • impoverish more than 500,000 residents of New York City: 100,000 will move into poverty and more than 400,000 who are already poor will move deeper into poverty;

  • impoverish nearly 700,000 more people in New York State: 140,000 will move into poverty and 550,000 who are already poor will move deeper into poverty, and

  • raise the poverty rate of families with children in New York State by 1-2 percentage points, and raise the severe poverty rate (the share of families living below 75 percent of the poverty line) by 3.5 percentage points.

  "Even with optimistic assumptions about families being able to find work and the state and city picking up the costs of child care," say the researchers, "we still found that 140,000 people, with more than 70 percent of them in New York City, would be pushed into poverty. The effect on those who were already poor is even more drastic, with 550,000 poor people, more than 70 percent of them in New York City, moved into severe poverty, below 75 percent of the poverty line."
Waldfogel. Record Photo by Amy Callahan.

  The increase in poverty is especially severe for legal aliens. If the federal legislation is fully implemented, the poverty gap (the amount needed to raise poor families incomes up to the poverty line) for these families will rise from $250 million to $460 million statewide, and from $228 million to $407 million in New York City.

  The researchers conducted a micro-simulation analysis of the likely impact of a number of federal welfare reforms, including the replacement of Aid to Families with Dependent Children (AFDC) with time-limited Temporary Assistance to Needy Families (TANF); the elimination of Supplemental Security Income (SSI) for some families with disabled children; the cuts in Food Stamps for childless adults who are not employed; and the changes in the eligibility of legal aliens to receive TANF, SSI, and Food Stamps, as well as Governor Pataki's proposal for reforming welfare, and their impact on families with children and childless adults in both New York city and state.

  In New York City, federal and proposed state legislation will push 100,000 additional people (including 15,000 families with children) into poverty, and more than 400,000 people (including 110,000 families with children) into severe poverty. The poverty rate would be 1.6 percent higher, and the severe poverty rate 11.5 percent higher, than current rates. The average poverty gap will be more than $1,400 higher; the aggregate poverty gap will increase by $515 million.

  In New York State, federal legislation will push 140,000 people and 30,000 families with children into poverty, and 550,000 people (including 150,000 families with children) into severe poverty. The average poverty gap will be more than $1,200 higher; the aggregate poverty gap will increase by $664 million.

  If, however, the state continues to provide Home Relief under current rules and funds a $50 per month child support pass-through for eligible families, the effects of federal reform will be mitigated to some extent. The poverty rate would be essentially unchanged, since Home Relief benefits and the child support payments are not high enough to raise families' incomes above the poverty line, but the poverty gap would become somewhat smaller, since poor families would have on average higher incomes.

  While New York's Home Relief program mitigates the effects of federal reform, they would be exacerbated if reforms similar to Governor Pataki's (the replacement of Home Relief with two new programs, benefit reductions for families that have been on TANF for 18 months or more, and changes in work incentives for those receiving TANF) were enacted.

  Under these plans, the report said, the average poverty gap would be increased by about $500 per family in both New York city and state; in sum, the average poor family would become $500 poorer.






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