Homelessness

Economic Changes

As American manufacturing stagnated throughout the 1970s because of increased international competition and a series of oil shocks, firms began to close domestic plants and restructure workforces, displacing workers and driving up unemployment. Newly created jobs were more likely to be nonunion and concentrated in services, low paying, and unstable. A surge in immigration increased competition for low-skill jobs, especially disadvantaging urban residents with low educational attainment. A cheap form of cocaine called “crack” flooded the streets and significant numbers of inner-city residents used or trafficked the drug, rendering some of them vulnerable to addiction, felony conviction, and homelessness. In the early 1980s, early 1990s, and in the early post-9/11 period, cyclical economic recessions produced spikes in unemployment and forced firms to reduce labor costs to remain competitive.

Welfare Retrenchment

At the same time, the welfare state was being scaled back, beginning most notably in the early 1980s. While deinstitutionalization of large-scale state mental hospitals had begun decades earlier, sufficient funding for community-based mental health facilities, intended to replace large mental institutions, never materialized. As a result, many persons who would have been in mental hospitals in previous decades received insufficient mental health treatment and cycled through the streets, shelters, and jails. Also in the early 1980s, the federal government took measures to keep benefit levels low for households in the Aid to Families with Dependent Children (AFDC) program and restricted eligibility for benefits through the Supplemental Security Income program. Later, the Personal Responsibility and Work Opportunity Act of 1996 replaced AFDC with Temporary Assistance for Needy Families, a program with time limits on receipt of welfare benefits and job training. Although many participants in this program have found employment, evidence suggests that many find jobs that fail to lift them out of poverty.

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