Impact of Welfare Reform on New York City

May 28, 2014

Because of welfare reforms, New York City's welfare caseload is 71 percent below its mid-1990s peak, according to a new report from Manhattan Institute Senior Fellow E.J. McMahon.

To analyze the growth and movement of welfare, McMahon tracked poverty measures -- from food stamp enrollment to the number of families receiving cash assistance from the government -- in New York City from 1956 to the present.

One of the most notable welfare programs was Aid to Families with Dependent Children (AFDC), a program with its roots in the 1935 Social Security Law. Originally, it provided aid to single mothers. Over the years, the program grew:  

  • The federal government gave states discretion to expand eligibility for AFDC in 1961, and cities saw their welfare rolls swell. The number of welfare recipients in New York City rose a staggering 82 percent between 1960 and 1965.
  • By March 1995, there were more than 1.16 million New Yorkers receiving cash assistance from welfare programs.

It was not until 1996 that the Personal Responsibility and Work Opportunity Reconciliation Act passed, replacing AFDC with a program known as Temporary Assistance to Needy Families, or TANF.

  • TANF is a block grant program that distributes welfare dollars to the states, which administer the funds. The program imposes a lifetime limit on benefits and penalizes states that fail to meet the program's work-participation rates.
  • In response to the new law, New York City instituted antifraud measures and imposed strict eligibility screening.
  • Additionally, TANF and New York law required all nonexempt residents receiving cash assistance between the ages of 18 and 59 to participate in a work activity -- from employment to vocational training -- for a minimum 35 hours per week.

What happened? People began falling off of the welfare rolls. While 863,491 New Yorkers were receiving AFDC aid in March 1995, by March 2014, just 218,435 were receiving aid through TANF or New York's Safety Net Assistance (SNA) program.

New York City food stamp use, however, has exploded since 2002, thanks to expansions of the program from Congress through the Farm Bill and the state legislature, as well as city efforts to enroll more residents in the program.

  • As of March 2014, one out of every five New York City residents was enrolled in food stamps, at a total of 1.77 million.
  • December 2012 saw record numbers of recipients in the program, at 1.9 million.

Unfortunately, writes McMahon, city lawmakers have introduced bills that would peel back welfare reforms and eliminate certain work requirements.

Source: E.J. McMahon, "Trends in Assistance and Dependency: Tracking Programs for NYC's Poor, 1956-2014," Manhattan Institute, May 2014. 

 

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