Is Rhode Island a Welfare Draw? Part 2: Some Statistics

The benefit policies that according to critics of Rhode Island’s welfare system are drawing people to Rhode Island in search of public assistance came online in 1997, when the old Aid to Families With Dependent Children (AFDC) program was replaced at the Federal level by Temporary Assistance to Needy Families (TANF). States also had to change their welfare policies in order to comply with the new Federal rules. In Rhode Island, the required changes were implemented through what is called the Family Independence Program (FIP).

1997 was a watershed year with respect to social welfare policies in Rhode Island for another reason. The beginning of FIP marked the end of a decade-long run of the poverty situation in Rhode Island being consistently better than in the rest of the country. According to Census Bureau statistics, the 1996 poverty rate in Rhode Island was 80.3% of the national rate. That marked only the second time since 1985 that poverty in Rhode Island had risen to greater than 80% of the national rate (the other bad year was 1992, when poverty in RI was 83.8% of the national rate). From 1997 onward, the poverty rate in Rhode Island has never dropped below 80% of the national poverty rate. Complete data is available in the table below.

The most recent statistics tell an even more interesting tale. In 2002, poverty in Rhode Island suddenly rose by 14.6% over the previous year, bringing the poverty rate in Rhode Island to 90.9% of the national rate. The spike was not a one-year anomaly. Since 2002, poverty in Rhode Island has never dropped below 90% of the national rate. The years between 2002 and 2005 mark the only time since 1980 where Rhode Island’s poverty rate has exceeded 90% of the national poverty rate for four consecutive years. (The second worst stretch in recent history would be the three consecutive years over 88% between 1982 and 1984.)

Now remember: 2002 was an important year in the annals of welfare reform, as it was the fifth year following the original implementation of TANF. TANF was supposed to limit an individual’s eligibility for direct cash assistance to five years, but until last year, Rhode Island had been skirting this regulation by not counting time spent collecting aid through TANF-related programs in other states against eligibility in Rhode Island.

Putting this all together, what the Census Bureau data shows is that at the same time that some welfare recipients would be confronting the possiblity of losing their direct cash assistance because they had exceeded their eligibility time limits, there was a sustained increase in the number of poor people living in Rhode Island, where the TANF five-year time limit was being interpreted much more loosely than in the rest of the country.

Are those who believe in the importance of a robust and effective societal safety net willing to attribute this trend to pure coincidence, and not consider the possibility that Rhode Island may be in need of some long-term solutions for bringing its poverty rate down to more historically normal levels?


Here is the Census Bureau‘s data on the poverty rate in Rhode Island, and in the U.S. in general…





























Year US
Poverty Rate
RI
Poverty Rate
RI Rate
as Pct of US Rate
1980 13.0% 10.7% 82.3%
1981 14.0% 11.7% 83.6%
1982 15.0% 13.3% 88.7%
1983 15.2% 14.5% 95.4%
1984 14.4% 12.8% 88.9%
1985 13.6% 9.0% 66.2%
1986 14.0% 9.1% 65.0%
1987 13.4% 8.1% 60.4%
1988 13.0% 9.8% 75.4%
1989 12.8% 6.7% 52.3%
1990 13.5% 7.5% 55.6%
1991 14.2% 10.4% 73.2%
1992 14.8% 12.4% 83.8%
1993 15.1% 11.2% 74.2%
1994 14.5% 10.3% 71.0%
1995 13.8% 10.6% 76.8%
1996 13.7% 11.0% 80.3%
1997 13.3% 12.7% 95.5%
1998 12.7% 11.6% 91.3%
1999 11.9% 10.0% 84.0%
2000 11.3% 10.2% 90.3%
2001 11.7% 9.6% 82.1%
2002 12.1% 11.0% 90.9%
2003 12.5% 11.5% 92.0%
2004 12.7% 11.5% 90.6%
2005 12.6% 12.1% 96.0%

A couple of observations/comments/questions…

After the bad years of 1982-1984, there was about a decade where poverty in Rhode Island was significantly less than poverty in the rest of the country. Is there anyone who was around back then who knows what was happening? (Paging Chuck Nevola…) Is there something that happened in the mid-1980s (and, by the way, 1985 would be the year that Edward DiPrete replaced Joseph Garrahy, and Joseph Paolino replaced Buddy Cianci; were either of them known for changing the social welfare policies of their predecessors?) that we could learn from?

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John
John
14 years ago

First class analysis. I can’t wait for Kate Brewster and Karen Malcolm to come up with yet another creative explanation for why what we see around us and in the data really doesn’t exist…
While we’re at it, I’d also recommend that, in line with the way the state (at the behest of the Poverty Advocates) now determines compliance with the five year limit on TANF receipt — ask the applicant and take their word as truth without further checking — we extend the same policy to the way State Troopers decide whether to write a speeding ticket. What’s good for the goose is good for the gander, right Kate?

SusanD
SusanD
14 years ago

Yes, great job, Andrew. This took some time.
As to compliance, I understand that 20% of recipients continue receiving benefits after the five years is up, apparently just by applying for an extension.

WJF
WJF
14 years ago

SusanD,
The last number I saw was 21% and that makes RI #1 in the country. The national average is 3.1%.
And for accuracy, when we let someone stay on welfare past the 5 years, they are granted an “exemption.”
Essentially, this puts their welfare clock on hold. The presumed reason we do this is to meet federal work participation requirements. Those receiving the exemption are working but still collecting welfare (see Justin’s post). If we kicked them off, RI would not meet the work participation minimums and would loose federal funding.
This is why the wording is important. Last year, during a senate hearing, Ron Lebel was asked if we grant “extensions” to the 5-year limit to people so we can count them on our work roles. He said “no.” He knew exactly what they were asking (and maybe the Senator knew exactly how she was phrasing the question), but by saying no they were ignoring the problem. How can we ever address the problem if we keep hiding it?

SusanD
SusanD
14 years ago

WJF:
Yup, you’re right, I was confounding compliance with staying within the budget. Those who apply for an extension are still compliant but the granting of such extra time adds to the budget and the taxpayers’ bill.
And now you’re telling us that such extensions, regardless of the real basis for them, help with RI’s compliance with federal work participation guidelines. So it’s a win-win.
Except for the recipients and taxpayers – the encouragement of bad decisions for the former and a needless expense for the latter.

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