Written by Sureshi Jayawardene
The Urban Institute, a think tank specializing in economic and social policy, recently issued a report, “Why Does Cash Welfare Depend on Where You Live?” exploring the variation in state Temporary Assistance for Needy Families (TANF) policies and the factors that might explain these differences. TANF is the primary government program associated with cash welfare and provides cash assistance to low-income families with children. Black families are hyper aware of this weak social safety net and understand the racialized nature of this system in its failure to help those who need it most. Black communities also already know that race is key to the implementation of TANF. However, the Urban Institute’s study shows the importance of a deeper awareness of why benefits vary by state.
The central goal of TANF, since 1996, has been to help curb poverty. Welfare reform implementations of 1996 significantly changed the structure of TANF. When Clinton created TANF twenty years ago to replace, AFDC (Aid to Families with Dependent Children), states were afforded much greater flexibility in the disbursement of benefits. Each state uses its federal TANF block grant to fund its own unique TANF program. Whereas with AFDC, the federal government shared the burden of any heightened need and costs with states which meant that funding rose automatically, with the block grant design of TANF states receive a fixed amount of money regardless of the volume of people who qualified for benefits.
According to the Urban Institute, differences in TANF benefits by state result from states’ broad authority to establish rules related to:
Congress has done little to adjust these fixed funds for inflation and other factors, which means that funding levels have eroded and not seen an increase since then. According to the Center on Budget and Policy Priorities, due to the fundamental design of TANF, states reach far fewer poor families than they did with AFDC. Therefore, the number of families benefiting from the program has been on the decline, without any significant shifts to poverty rates in the nation. For example, in 2013-14, for every 100 families living in poverty, only 24 families received TANF. This figure fell to 23 in 2015. In 2016, in an average month, 1.5 million families—that is, only 1% of the total population—received TANF cash benefits, and nearly 40% of these families received benefits only for children in the household.
The TANF-to-Poverty Ratio
The Urban Institute reports that although the TANF-to-Poverty ration has fallen in every state except Oregon, the difference among states has increased. For instance, in 1998, for every 100 families with children in poverty, the state of California provided cash assistance to more than 3 times as many families as Texas did. By 2013, this ratio had grown to 13 times as many families. Between 2013 and 2014, Louisiana, Texas, and Wyoming provided TANF to fewer than 5 families for every 100 with children in poverty.
The report highlights that the majority of African Americans lives in states that provide TANF cash assistance to no more than 19 families for every 100 families living in poverty. The majority of non-Hispanic White people live in states that provide TANF to at least 20 families for every 100 living in poverty. Here is one of the ways the policy has racially disproportionate effects.
The Urban Institute analyzed TANF policies of each state, organizing them into three broad categories: generosity, restrictiveness, and duration. Their findings were key to the racialized and racist nature of the delivery of TANF benefits. For instance, researchers found that the racial demographics of a state were central to how generous or restrictive a state’s TANF policies were. According to them, African Americans as well as other groups of color are highly concentrated in states where TANF policies are less generous with maximum benefits, more restrictive on behavior, and stipulate shorter time limits on families. African American families, in particular, are concentrated in states with harsher, more restrictive TANF policies.
Trump’s Budget and TANF
The Trump administration recently released its budget outline which involves major changes to social safety nets, including dramatic cuts to the country’s only cash assistance program, TANF. Critics of the Trump budget blueprint have called attention to the severe underfunding of TANF in the past two decades, which means the program would be further stifled and ineffective in achieving its objectives under the current administration’s proposed budget. Trump aims to cut TANF funds by $21 billion over the course of a decade and reduce the amount of federal funds to states to deliver benefits by $15.6 billion. This budget also proposes the elimination of TANF contingency funds, which account for funding needs when an economic crisis increases pressure on the program. According to the White House, this budget “strives to replace dependency with the dignity of work through welfare reform efforts.” The Urban Institute’s findings and the budget proposal of the Trump administration demonstrate that access to welfare for poor families would be further restricted. Poor Black families are likely to find themselves even more ineligible with Trump’s proposed welfare cuts.
Written by Serie McDougal
It was a steamy hot July in1955. A young Martin Luther King Jr. stepped up to the podium at the Holt Street Baptist Church in the midst of a Bus Boycott to end the segregation aboard buses in Montgomery, Alabama. He began giving a riveting speech to the crowd who was gathering confidence and inspiration that they could eventually break the back of Montgomery County and force it to end segregated seating aboard buses. However, King noticed that people began to enjoy the carpooling system they had created as an alternative. He had been hearing rumblings among the congregation that people were proud of the system they started because it was a creation all their own. Moreover, they enjoyed one another’s company. They began to get to know one another on a different level. They enjoyed being together in the interest of advancing the Black community. They became more interested in expanding this new experience instead of integrating Montgomery’s busing system. As King read the crowd, he abandoned his prewritten speech as proclaimed, “I want you to realize the gravity of what you have created. You have claimed something that Montgomery was never capable of giving you. Something more valuable than sitting next to someone who is White? You have claimed your freedom, and you have experienced what that feels like. Let’s not end that! Let’s not end this bus boycott! Let us build and sustain it in perpetuity! Let's call it ‘The Harambee Transportation Company’.” The rest is history.
Obviously, the above is an alternative history of the Montgomery Bus Boycott. But why reimagine such a momentous accomplishment? More specifically, how is it relevant to the work experiences of Black people today? People tend to perform better on their jobs when they are respected at work and find their jobs interesting and fulfilling. Many African Americans do not have this experience in large part due to racism. In Chicago, seven African American, current and former employees of the water department are a part of a class-action lawsuit charging that they were and are subjected to systematic denial of promotions and routine racial and sexual harassment. Yet, racism is said to be bad for business because it denies companies the best and the brightest due to their race. Well, then why engage in systematic bias over a protracted period of time and foster a culture of White supremacy if the market accepts the logic that racism is bad for business? Milton Friedman argued that capitalism was fundamentally good and racism doesn’t make sense because the pressure to make money will force employers to not make decisions based on race. Racist math doesn’t work according to this logic. Answering this question requires a different calculus. The country may lose billions of dollars annually due to employment discrimination that causes loss of productivity and talent. However, according to the crowding hypothesis as articulated by Bates & Fusfeld (2005), when Black people are crowded into lower paying jobs and systematically denied promotions, their wages will go down or do not rise. Non-Black workers benefit from this because it takes them out of competition with Black workers, making it easier for their wages to rise (Bates & Fusfeld, 2005). The other kind of capital not accounted for in the logic that racism is bad for business is the psychological capital that is gained from the sense of superiority that is fed by routinized racial harassment. The same logic applies to sexual harassment but combined with racism the experience is far more pervasive transcending labor markets and class divisions. However, did the Montgomery Bus Boycott prove Friedman’s logic correct? Did it prove that racism, in fact, is bad for business? In fact, it resulted in a collective action model that gave the civil rights movement a blueprint. However, racism has found new and more resilient means of resisting this economic logic, as it has in Chicago’s water department. But, imagine for a minute, what would have happened if the Montgomery Bus Boycott had never ended. Perhaps, the outcome would have been a Black owned transportation company. Maybe it would have been a model for Black owned business expansion in similar cities across the country. The Black liberation struggle has developed many methods for advancement. For example, the NAACP has made clear the role that legal action plays in challenging racism. An additional solution to job discrimination may come from moving the creation of Black businesses up the priority list from an “alternative” to a “primary” method of creating work opportunities for Black people in which they are respected, fulfilled, and stimulated.
Bates, T. & Fusfeld, D. (2005). The crowding hypothesis. In C.A. Conrad,
J. Whitehead, P.L. Mason & J. Stewart (ed), African Americans in the US economy.
Rowman & Littlefield Publishers, pp. 101-109.