The passage of welfare reform in 1996 had one overarching goal: to break families’ dependence on government assistance by helping them achieve self-sufficiency through work. Yet 20 years later, poverty has worsened, and despite early employment gains, the share of poor single mothers with a high school education or less who are working has fallen to 63 percent – about the same as in 1996.
One of the biggest hurdles for low-income women seeking to work their way up the ladder is lack of access to affordable child care.
According to the nonprofit Center for Law and Social Policy (CLASP), total federal spending on child care subsidies for low-income women has not kept up with growing demand, and is now at its lowest level since 2002. Moreover, CLASP finds, barely 1 in 6 children eligible for federal or state child care subsidies is receiving it.
Single mothers comprise more than 85 percent of welfare recipients, which is why child care support was a key focus of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 and the cash assistance and “welfare-to-work” program it created, Temporary Assistance for Needy Families (TANF). Welfare reform legislation boosted federal funding for child care and streamlined it into the Child Care and Development Block Grant (CCDBG), the main source of funding states can use to provide child care subsidies for poor families.
As states engaged more welfare recipients in work or training activities to meet TANF’s tougher work requirements, the need for child care assistance also grew.
As a result, states typically prioritize TANF recipients subject to work requirements for child care subsidies, and a 2006 study by the Urban Institute found that 60 percent of recipients do in fact leave for employment, in part thanks to this help. The problem is that once welfare recipients get a toehold in the labor market, they may end up losing child care help just when they need it most to make a successful long-term transition out of welfare.
“Families lose eligibility for TANF in most states when their income gets to half the federal poverty level,” said Elizabeth Lower-Basch, CLASP director of income and work supports. “Of course, because quality child care is expensive, families with much higher incomes – up to 200 percent – often still struggle to afford quality child care.”
And while child care subsidies through CCDBG are supposed to help pick up the slack, only a tiny fraction of the children eligible for that help are getting it.
According to recent CLASP research, levels of access to child care help from the CCDBG program are at a 16-year low, with only 13 percent of all eligible children currently receiving child care assistance. CLASP also found significant disparities in certain states and minority groups. Latino and Native American children have particularly low levels of access nationwide, at 8 percent and 6 percent, respectively.
While some states are ensuring the program reaches more than 20 percent of eligible poor children – such as in Delaware, Hawaii, Pennsylvania, Vermont and Wyoming – 14 states are performing far below the national average. In Arkansas, Maine, Nevada, South Carolina and the District of Columbia, for example, only 7 percent or less of all poor children have access to the subsidies.
Lack of adequate funding for CCDBG is the biggest issue, but “problems in the (low-wage) marketplace are also creating problems in the child care world,” CLASP Deputy Director Jodie Leven-Epstein said. “To the degree that low-income women are working, they’re often working in jobs that are almost tailor-made to make it hard to keep child care because the schedule they have to follow to keep their job or at least not lose wages is often very erratic.” CLASP also says that state policies determining who is eligible for subsidies can have an additional impact on whether a family benefits or not.
In many cases, the difficulties in child care access are significant enough that women end up returning to welfare.
“One of the promises of CCDBG was you wouldn’t have to go through the welfare door to get on subsidies,” Lower-Basch said. “But the waiting lists are long, and people do find themselves going on cash assistance to get subsidies (which are) worth far more than the fairly minimal amount of cash assistance provided.”
For the 1.4 million children currently served by CCDBG, the program is a critical support that helps their parents work or go to school so they can meet their families’ needs on their own. According to CLASP, single mothers receiving child care subsidies are more likely to be employed, work full-time or more hours, and have more stable employment. And their children benefit socially and emotionally from both the family’s improved economic situation and better early childhood education experiences.
Perhaps the biggest sign of progress is the reauthorization of the CCDBG program in 2014 – the first since 1996. The new law includes provisions intended to improve the quality of care and help low-wage workers facing variable schedules access the subsidies for longer and gradually transition off the program. However, states need more funding, which is not guaranteed by the reauthorization, to meet the new requirements, CLASP says. In addition, they say, states need to assess how their policies restrict CCDBG access for certain groups and how to close the gaps across races and states.
Yet the high cost of quality child care – one year of child care now costs more than a year’s tuition at typical four-year public colleges, or around 8 percent of the average family’s earnings – far exceeds what a single woman in a low-wage job can afford on her own.
While the right state and federal policies can help ease the cost burden, Lower-Basch says the bigger challenge will be to create more family-friendly workplaces that take into account the needs of low-income working parents. If this year’s presidential contenders are serious about restoring economic mobility to the United States, the challenge of day care access for working poor Americans should be a vital piece of the agenda.