Millions of Americans face the financial hardships of losing a job, not being able to work due to a disability or supporting a family on a small salary each year. The struggle to put food on the table, pay bills and support a family can be incredibly harsh which is why the United States has a series of welfare programs to help those in need.
Federal welfare programs first started in 1935 during the great depression. With widespread poverty, starvation and unemployment, a series of programs were created to help Americans place food on the table and help those unable to support themselves and their families.
Today, the means-tested welfare system consists of 79 government programs that offer cash, food, social services, education, training and housing for low-income Americans. As welfare programs are both funded through local, state and federal taxes, programs are often a topic of political debate.
With some misconception surrounding the Americans receiving welfare and effectiveness of the program, we have provided welfare statistics important for 2020. Explore the costs, effects and various demographic statistics in our study of the welfare programs in America.
Cost of Welfare Programs
The total cost of poverty assistance programs in America can add up to a shocking $1 trillion a year when combining both federal and state level program budgets. Because of the large total price tag on helping the poor, welfare programs are often an area of policy and budgetary debate.
- In 2018 a total of $445 billion is projected to be spent on welfare programs in America. [Source: U.S. Government Publishing Office]
- 5.6 percent of the total government spending in 2018 in America went towards welfare programs. [Source: U.S. Government Publishing Office]
- Local governments spend an estimated $284 billion on poverty reduction programs every year. [Source: CATO Institute]
- From 1965 to 2011 the total percentage of GDP spent on welfare programs has quadrupled from .83 percent to 4.4 percent of the total. [Source: CATO Institute]
- On average the monthly payment benefit for American welfare recipients is $404. [Source: The United States Census Bureau]
- The average SNAP recipient in 2018 received $127 a month in assistance which is about $1.39 per meal. [Source: Center on Budget and Policy Priorities]
2018 Federal Welfare Budget
|Program||Estimated 2018 Budget|
|Family and children assistance||$268 billion|
|Workers compensation||$2.8 billion|
|Housing assistance||$47.9 billion|
- In 2018 the poverty threshold for a couple with two children was a shared income of $25,000 a year. [Source: Center on Budget and Policy Priorities]
- Mississippi has the highest number of people living in poverty in 2018 with 19.7 percent of residents. [Source: United States Census Bureau]
- In 2018 13.1 percent of Americans lived in poverty, down from 12.3 percent in 2017. [Source: United States Census Bureau]
States with the highest poverty rates
[Source: United States Census Bureau]
States with the highest population living in poverty
[Source: United States Census Bureau]
Welfare Program Results
Following the welfare reform act of 1996, government spending on welfare programs decreased as additional requirements and restrictions were put into action. Despite having less budget to pull from and more restrictions, the welfare programs in America have successfully lowered poverty rates over the past decade. Some issues with the current welfare program are its performance during years of economic downturn and recession.
- Government welfare programs are cited for the decline of the poverty rate from 26 percent in 1967 to 14.4 percent in 2017. [Source: Center on Budget and Policy Priorities]
- Only 23 percent of families living in poverty receive Temporary Assistance for Needy Families cash assistance in the United States. [Source: CPPB]
- During the great recession from 2007 to 2009, despite doubled unemployment rates, the number of families receiving assistance grew by only 13 percent. [Source: Urban Institute]
- The number of children living in poverty in the United States decreased from 44.9 percent in 2010 to 41.2 percent in 2016. [Source: NCCP]
Average Spending of Welfare Recipients
Compared to the average American household, welfare recipients spend far less money on all food consumption including dining out in a year. As families receiving welfare assistance on average have half the total spending in one year than families not receiving welfare there are some large differences in budgeting. Families receiving welfare spend on average 154 percent less on entertainment and 123 percent less on healthcare costs.
[Source: Bureau of Labor Statistics]
- American families not receiving welfare assistance spend nearly 4 times more money on entertainment than families receiving welfare assistance. [Source: Bureau of Labor Statistics]
- Despite being the same size, families receiving welfare assistance spend half the amount of families not receiving welfare. [Source: Bureau of Labor Statistics]
Welfare Fraud Statistics
Welfare fraud is the act of improperly stating or withholding information in order to receive higher payments. Most welfare programs’ eligibility is handled on a local level and detecting fraud is also the responsibility of the state. The United States Government Accountability Office estimates fraudulent or improperly filed charges account for 1 out of 10 payments.
- In 2016, 10.6 percent of all federal welfare payments made were improperly filed or fraudulent. [Source: United States Government Accountability Office]
- In 2016, 24 percent of negative income tax payments were considered improperly filed or fraudulent. [Source: United States Government Accountability Office]
- A total of $77.8 billion in payments were found improperly filed or fraudulent in 2016. [Source: United States Government Accountability Office]
- 64,699,741 individuals were enrolled in Medicaid in October 2019.[Source: Medicaid]
- An average of 35 percent of unemployed Americans received means-tested benefits. [Source: United States Census Bureau]
- On average 21 percent of Americans participate in at least one government assistance program. [Source: United States Census Bureau]
- 43 percent of Americans signed up for welfare programs have been participating for over 3 years. [Source: United States Census Bureau]
- 18 percent of all U.S. adults have received food stamps at some point in their lives. [Source: Pew Research Center]
- Over half of Americans receiving housing assistance have been enrolled for over three years. [Source: United States Census Bureau]
- Only 10 percent of Americans receiving housing assistance pass the requirements for housing assistance over three years. [Source: United States Census Bureau]
- More women (22 percent) participated in a food assistance program than men (12 percent) at some point in their lives. [Source: Pew Research Center]
- 39 percent of children under the age of 18 participated in some form of government assistance program in 2012. [Source: United States Census Bureau]
- On average 50 percent of female lead households participated in a form of government assistance programs. [Source: United States Census Bureau]
- On average 27 percent of Americans enrolled in a welfare program had completed less than high school, 33 percent had a high school diploma, 31 percent had some college or an associate’s degree and 9 percent had a bachelor’s degree or higher. [Source: Bureau of Labor Statistics]
Welfare in the Workforce
Although welfare programs are commonly argued to support the lazy, data does not show this to be true. In the current state, welfare programs predominantly help Americans who receive low wages. The U.C. Berkeley Labor Center discovered that welfare program participation is higher for Americans receiving minimum wages.
- On average 39 percent of women receiving Aid to Families with Dependent Children benefits were also employed [Source: Bureau of Labor Statistics]
- $152.8 billion is spent each year in the United States on welfare programs to support working families with low wages. [Source: U.C. Berkeley Labor Center]
- 52 percent of fast food workers with at least one family member rely on at least one poverty assistance program. [Source: U.C. Berkeley Labor Center]
- 6.7 percent of full-time workers participated in one or more means tested assistance program. [Source: United States Census Bureau]
Although a $1 trillion a year budget may seem large at first glance, the current welfare program consisting of 79 separate programs supporting 21 percent of Americans puts the large problem of poverty into perspective. Without any government safety nets, those living in poverty would not have the proper help to survive or tools to get back on their feet. With a rise in credit card debt across America it is still important to find a solution to pull the citizens living paycheck to paycheck out of poverty.
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