Few topics are more misunderstood than the U.S. social safety net. From Ronald Reagan’s “welfare queen” to current HUD Secretary Ben Carson’s caricature of a comfortable life in public housing, the safety net and those who use it have been routinely vilified.
Just recently in St. Charles, President Donald Trump, in announcing his plans for welfare reform, said, “I know people that work three jobs and they live next to somebody who doesn’t work at all. And the person who is not working at all, and has no intention of working at all, is making more money and doing better than the person that’s working his and her ass off. And it’s not going to happen.”
As Congress considers making significant changes and cuts to these programs during the next few months, it is time to splash a dose of hard reality onto this subject.
The social safety net, or welfare system, consists of a handful of programs. They include Medicaid, the Supplemental Nutrition Assistance Program (better known as food stamps), housing and disability assistance programs, Temporary Assistance for Needy Families, and several others. The programs are designed to provide stopgap assistance until households are able to get back on their feet, and in order to qualify, individuals must be close to or living in poverty.
Yet when we visualize these programs, we often picture a deviant group of lazy, able-bodied recipients “on the dole” for years at a time. Politicians have routinely exploited this image in order to scapegoat the poor as undeserving of government help or assistance. However, in spite of its widespread use, this image is a serious distortion of reality.
It turns out that the majority of Americans will use the safety net, often for relatively short periods of time. The latest U.S. Census report on this subject indicates that in a typical month, 21 percent of the population were receiving one or more of these programs.
Furthermore, in my research estimating the lifetime chances of using the safety net, a surprising two-thirds of Americans between the ages of 20 and 65 will do so. Similarly, half of all children at some point during their childhood will reside in a household receiving food stamps. Rather than an exception, the use of the social safety net extends to the majority of Americans.
What about the often-repeated claim that we spend too much money on these programs or that our nation pays out exorbitant sums to support poor families? As a percent of GDP, the United States actually expends far less on its safety net than most other industrialized countries. In addition, over the past 40 years, benefits for children and families have become harder to come by, with cash assistance noticeably shrinking.
“But what about the disincentive effects?” you might ask. “Doesn’t welfare encourage recipients to work less and have more children?” Research demonstrates that the answer is no. Think about it. Would you really consider having an additional child for an extra $35 a month? Of course not, and neither would nearly all recipients. The real disincentive is the condition of poverty. Living in poverty creates substantial harm to those who fall within its grasp.
Poverty is especially destructive to the well-being of children. Children growing up in poverty are much less likely to thrive and reach their potential as adults. The effect on health is particularly pernicious.
However, what we have failed to recognize is the cost of such poverty to the country as a whole. In a recent analysis, a colleague and I estimated the annual economic cost of childhood poverty. We factored in the direct effects that poverty has upon ill health, lower economic productivity and several other conditions. Our analysis revealed that childhood poverty costs the U.S. approximately $1 trillion a year, or 5.4 percent of its GDP.
Furthermore, we show that for every dollar spent on reducing poverty, the country would save at least $7 with respect to the economic costs of poverty.
The bottom line is that we should be spending significantly more in this country to fight poverty, rather than slashing an already weak safety net. By helping families keep their heads above water when poverty strikes, we invest in the well-being of our most important resource, our people. It is not just a question of social justice, but one of smart economic policy. Other countries have learned this valuable lesson. The question before Congress and the American people, is when will we?
Mark R. Rank is a professor of social welfare at Washington University. His research on poverty and the social safety net can be found at confrontingpoverty.org.