How 19 States Can Boost Family Economic Security

19 Jun 2014 |
How 19 States Can Boost Family Economic Security

Over at Slate, Jamelle Bouie highlights a simple policy fix that could reduce poverty and increase family economic security in California, Massachusetts and 17 other states. As part of the legacy of the controversial welfare reforms passed in 1996, states are allowed to pass Family Cap limits that deny additional benefits or reduce the cash grant to families who have additional children while on assistance. Nineteen states have some form of a family cap policy, most of which were passed between 1996 and 1997.

As Bouie lays out, these policies have severe implications. He writes:

"In Maryland, a state without family caps, the average benefit for a single-parent family of three is $574. If, while receiving that benefit, the parent had another child, it would rise to $695, a 17 percent increase. By contrast, in Virginia—where the benefit for a family of three is $389—it would stay the same (as opposed to growing to $451). And when you consider the generally low benefit levels of family cap states—in Georgia, the average monthly benefit for a three-person household is $280, in Mississippi it’s $170—what you have is a recipe for greater poverty."

The purpose of family caps was to dissuade people on assistance from having more children, which feeds into the stereotype that recipients of assistance were irresponsible system gamers who would have more children to receive more benefits. This rhetoric is part of racially-tinged dialogue that looks to demonize people who are poor. In reality, the best way to reach economic independence is to provide a strong safety net so people can accumulate the wealth and capital needed to be economically secure.

Punitive approaches and shrunken safety nets don’t help families escape poverty, and they don’t help the economy.  In 2012, our poverty rate  was 15 percent and the child poverty rate was 21.8 percent. In other words, more than one if five children live in poverty. Yet poverty doesn’t impact everyone equally. The poverty rate among African-Americans in 2012 was 27.5 percent and 25.3 percent among Latinos. Among African-American children, 29.2 percent live in poverty, 20 percentage points higher than for white children. Without safety net programs, these numbers would be even higher. And, child poverty is not just a social ill, the economic costs of it top nearly $500 billion per year.

To succeed, struggling families need a path to economic security. A strong safety net provides the foundation. Research has shown that the family cap puts poor children at greater risk and leads to families having higher levels of food and housing insecurity. While the amount of additional aid a family would receive barely covers the cost of an additional child, it does make a difference in a family’s ability to function.

As people of color grow as a share of the population, taking steps to reduce poverty and inequality is not just the right thing do—it is an economic imperative for the nation. Equity—fair and just inclusion—needs to be at the center of our discussions about economic growth and prosperity. As one small step forward, 19 states, including California can repeal the family cap rule and help struggling families escape poverty.