Single Mothers and Financial Security: Policy Design

Editor’s note: This post is the second in a series of three exploring the issue of asset building and single motherhood. Haley Eagon, a current senior at Williams College in Massachusetts, interned with the Asset Building Program this summer and authored these posts. Read part one here. 

Single mothers face unique obstacles in their quest to raise families and live fulfilling lives themselves. According to a as stated in this New York Times piece by Jason DeParle (see an interview with him in our office here), single mothers lack both a second income, and “a second set of parenting hands.” While these challenges are significant for many single mothers, additional systematic disadvantagesin the form of financial instability, lack of access to affordable and quality child care, and obstacles to utilizing public benefits also play a role. When considering the confluence of these factors, we can begin to see single motherhood not as inherently dysfunctional, but instead, a life made more challenging by obvious limitations on capacity and current social policy. Even targeted anti-poverty programs such as TANF (Temporary Assistance for Needy Families) and SNAP (Supplemental Nutrition Assistance Program) can actually confound efforts on the part of low-income parents to get out of poverty.

Asset Limits

Asset limits for public benefits programs vary by state, but impose limits on how much savings a family can have while still qualifying for programs. Asset limits penalize applicants and benefits recipients alike by forcing families to hit rock bottom before being eligible for assistance. Instead of boosting families out of poverty, these limits instead can actually reinforce cyclical poverty and dependence on assistance. As both Rachel Black and Aleta Sprague have argued here on The Ladder, asset limits are detrimental to the financial stability of single mothers and their households. (Their latest policy paper documents the impact state asset limits have on families’ economic security and possible areas for reform.) Unwilling and unable to risk losing these benefits, many Americans may not accumulate any savings at all. Asset limits also have the potential to hurt single mothers in particular because they can discourage them from saving for their child’s future education or accumulating emergency savings to ensure health and wellbeing.

Work Requirements

As the Center on Budget and Policy Priorities reports, TANF caseloads have declined dramatically since welfare reform in the mid-1990s. However as the Center for Law and Social Policy (CLASP) notes, the “real measure of whether welfare reform has been successful is less need, not fewer people receiving it.” Since welfare caseloads continued to decline throughout the recent economic recession, we have much reason to believe that these programs are not truly responsive to the demonstrated need of Americans. One feature of welfare assistance is work requirements although they vary by state. Single mothers face additional struggles in light of these work requirements. As Peter Goodman writes, “Many states demand that recipients attend resume writing programs in order to keep their checks. Single mothers are generally not excused for missing class even when they lack child care or transportation. [Then President] Clinton promised that subsidized child care and transportation programs would accompany welfare reform, but his words have proven hollow.” It may be difficult for single mothers to fulfill these work requirements while simultaneously providing enough care to their children. According to a recent report, the cost of center-based child care for one child is more than annual median rent in almost half of U.S. states.

Finding Childcare

A pervasive lack of affordable, quality childcare in the U.S. is particularly detrimental to single mothers’ abilities to earn a living wage and provide for their families. As primary earners, single mothers frequently rely upon others to look after their children. Some mothers rely on networks of family and friends to help at a low cost, but child care centers, credentialed caregivers, and standards for safety and curriculum come at a very high price. A report from the National Association of Child Care Resource and Referral Agencies demonstrates that the “average annual cost of center-based care for an infant ranged from $4,600 to $15,000 per year across states.” In other words, child care expenses could eat up between a third and 100% of the earnings of a single mother earning minimum wage (assuming a wage of $7.25 per hour, working 40 hours per week for 50 weeks per year). Without access to affordable and safe child care options, single mothers are significantly hampered in their efforts to earn a living and provide for their children. If the goal of programs like TANF is to enable Americans to return to self-sufficiency in the workforce, and many parents have nowhere to turn for affordable and quality childcare, it is clear that these policies are in conflict, and single mothers in particular are suffering as a result.

As I discussed in my previous post, single mothers are also much less likely to develop assets or be financially stable. Separating correlation from causation is essential. Many studies include large numbers of single mothers with lower income and lower assets. That means that not only do they have a common family structure, but often a common relationship to money and the welfare system. In short, since many single mothers are low-income, these studies are in effect examining not only the effects of single motherhood but the effects of financial insecurity. Attributing undesirable outcomes to family structure (rather than other detrimental factors) is a logical jump that we should not be prepared to make with confidence. Government policies, such as asset limits and problematic welfare work requirements, combined with poor access to living wage jobs and affordable, quality childcare help explain why so many single mothers struggle with poverty.

In my third and concluding post, I will examine the benefits of re-conceptualizing the “traditional family” in America.