Labor Gains

To more fully understand The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, it's critical to understand who the welfare recipients are.

• An estimated 4.5 million families receive Aid to Families With Dependent Children (AFDC); by 2002, about 2 million adults in these families will be required to work under the new law.

• A Congressional Budget Office report found that benefits provided under AFDC and Food Stamps programs represented approximately 3 percent of the federal budget in 1995.

• In 1992, according to the most recent federal statistics, 66 percent of all AFDC recipients were children, 80 per-cent lived in families headed by mothers in their 20s and 30s, and 8 percent lived in families headed by a teen.

• Seventy percent of all people in the welfare system leave within two years; 50 percent leave within one year. Only 15 percent of welfare recipients stay on more than five years, and less than 25 percent stay on for 10 years or more.

• Studies estimate at least half of AFDC families who leave the system return because of job loss or child-care problems.

• Ethnic breakdown of AFDC families in 1993 (the most recent figures available):

• 38 percent non-Latino Caucasian

• 37 percent black

• 19 percent Latino

• 4 percent American Indian, Asian/Pacific Islander and unknown

This article was originally published in the January 1997 print edition of Entrepreneur with the headline: Labor Gains.