Political and economic developments in the 1990s sparked a dramatic shift in the national debate about work and poverty. A new concern superceded the long-standing focus on how best to reduce individual dependency on government; the question became how to get significant numbers of people off welfare, out of unemployment, and into jobs. In the policy arena, welfare reform moved work onto center stage, replacing an entitlement to cash support. In the economic realm, a decade of tight labor markets made employers more receptive to public policies that would help them find qualified workers.

It was relatively simple to move people from welfare to work during the early to mid nineties because the economy was robust, but now that it has weakened some, employers would be more reluctant to higher someone straight off welfare. They would prefer to invest their funds in someone with more training. If someone does find a job coming off welfare, it will probably be a low-wage position.

The speed with which welfare rolls shrank and the employment of former beneficiaries increased surprised many, regardless of their views on the new welfare policies. Since 1994, welfare rolls have dropped by more than 50 percent nationwide and by as much as 90 percent in some states. More than half of these women-and almost all those coming off welfare are women-have moved into unsubsidized, paid employment. That is, some 800,000 people have made the transition from welfare to employment as a result of the felicitous combination of a strong economy and changes in public policies.

Yet the very success of work-centered welfare reform in getting people off welfare and into jobs has brought another, more difficult, challenge into sharp relief: For many people, getting into work doesn't mean getting out of poverty. Recipients who leave welfare typically find jobs that pay between $6 and $8 an hour, well below the income needed to bring a family of three above the federal poverty level. Moreover, there is little evidence of significant wage increases for those who stay employed, even after three years.

In addition to low wages, other obstacles keep low-paid workers from rising above the poverty line. For instance, day care expenses, transportation to and from work (many urban transportation facilities do not provide transportation into suburban areas where most jobs are), stringent credit criteria for purchasing a vehicle, and high auto insurance rates, high rental cost, housing discrimination in the housing market, and other bureaucratic and state taxes, rates, and fees.

This does not mean that welfare reform has failed: About half of former welfare recipients believe that the quality of their lives has improved, even if their economic situation has not. It does underscore that access to employment-even in the nation's most robust economy in over 30 years-is an insufficient solution to poverty.

As the debate over welfare dependency has cooled, the question has become how to help hardworking Americans find their way out of poverty through work. As welfare recipients join the ranks of the employed, it becomes difficult to distinguish them from the millions of other working Americans whose family incomes are inadequate. Today, fewer than 2 million Americans head families that receive welfare benefits, yet over 9 million working Americans earn less than the official poverty level-and one out of four of these individuals works full-time, year-round. This says that many people did move from welfare to work while at the same time remaining in poverty.

Serious challenges face all low-skill workers in today's economy. Entry-level workers cannot easily advance out of poverty simply by staying on the job and moving up through seniority. Traditional routes to advancement for low-skill workers, such as career ladders inside large firms and union-negotiated wages, have become less common. More and more often, employers outsource their low-wage jobs and hire externally for mid-level jobs that they once filled from within.

The proportion of American workers who belong to unions has been declining for decades, weakening one of the sources of good wages for relatively low-skill workers. And growing technological complexity and changes in work organization have made a person's skill and educational credentials increasingly important to success-and earnings-in the labor market.

Together, these changes in the structure of employment and the labor market make it difficult for less-skilled workers to earn an income that can support a family. Real wages of workers with a high school diploma or less dropped precipitously in the 1980s and remain lower than they were in the mid-1970s. During the 1990s, a decade of exceptional productivity growth and profitability, income inequality also grew markedly. While incomes of better-educated workers rose, earnings for those in the lowest deciles of the employment distribution began to rise only late in the decade. Today, too many Americans, despite working hard, find it difficult to escape jobs that pay too little, provide minimal benefits, and offer limited security and opportunity for advancement.

The American Dream remains out of reach for men and women who earn low wages in this new economy. It is a challenge pulling themselves and their families out of poverty through work. Most important, more strategies must be made for helping working Americans advance-the policies and practices that can make a real difference in the ability of low-wage workers to support their families, choose their futures, and contribute more fully to society and the economy.

© 2003 by AfroStaff