Welfare-to-Work's Unintended Consequences

The historic welfare reform law of 1996 was widely praised for encouraging Americans to go back to work and not stay on the dole. But after nearly two decades of experience with the law, analysts are finding it created unintended side effects such as a perverse incentive for some employers to pay skimpy wages.

Buried in the law were little-known provisions enabling people who earn wages near the poverty level to supplement their incomes with an array of federal benefits, including food stamps, Medicaid, child care andcash wage subsidies from the Treasury.

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