Getting families off welfare and into the work force has done little to lift the poorest children out of poverty.
Beneath a rising economic tide that buoyed the incomes of most Americans in 1998, nearly one out of every five children in the United States was left struggling in poverty. Moreover, since the enactment of sweeping federal welfare changes in 1996, contained in the Personal Responsibility and Work Opportunity Reconciliation Act that abolished Aid to Families with Dependent Children, hundreds of thousands of poor children have sunk even farther below the poverty line.
Lifting all of America's children securely from poverty will require more vigilance, and more funding, than the nation now invests. It will also require extending income supplements and incentives for parents to work. To move from welfare to work, parents need support services such as child care, job training, and transportation--services that traditional welfare recipients do not need. Fortunately, thanks to unexpectedly healthy economies in most states, along with federal funding that remains frozen at each state's pre-1996 level, unused money for this purpose abounds for now, and good models for rescuing children from poverty are not hard to find.
The Working Poor
In 1998, over 13 million children lived in families with incomes below the official federal poverty line of $13,003 a year for a family of three or $16,660 for a family of four.  While the proportion of children who live in poverty--18.9 percent--has been declining for five straight years, it remains high by almost any standard. It is higher, for example, than at any time from 1966 through 1980, and nearly twice as high as for U.S. adults. The poverty rate for children in the United States is higher than in any other nation in the Western industrialized world. To a certain extent, today's high level of child poverty is the continuation of a plateau reached in the 1980s, when child poverty rates soared to 22 percent from 16 percent in 1979. Harsh recessions in 1980 and 1981, widening inequality of wages, growing numbers of single parent families, and a weakening government safety net all contributed to creating and maintaining the high levels of child poverty in the 1980s.
Despite the natural perception that poverty is the result of not working, a large and growing majority of America's poor children live in working families. In 97, seven out of 10 poor children lived in a family where someone worked at least part of the year, up from six out of 10 just four years earlier. The number of full-time, year-round working families whose low income left their children below the poverty level is at its highest point in the nearly quarter century for which such data have been kept.
Another myth concerning poverty is that the majority of poor people derive most of their income from welfare. In 1997, poor families with children received nearly three times as much cash income from work--$5,295--as from cash welfare payments--$ 1,824.
Why are more low-income parents, especially single mothers, working? There are several reasons, including a healthy economy--the percentage of all adults who work is at an all time high--a variety of changes in the welfare system, and expansion in several forms of government support for working families such as the federal earned income tax credit, which provides up to $3,756 a year in tax relief or tax refunds to low and medium-wage working families earning up to $30,000 a year.
If so many low-income families are now working, why has the strong economy failed to bring about a reduction in child poverty? Middle-income families fared famously well in 1998, when the yearly income of the typical, or median, family reached a record high of $46,737--up a healthy 3 percent from the year before, after adjusting for inflation.
But over a slightly longer perspective, the 1990s have not been so family friendly. …