become less dependable, and social policies have sharpened distinctions between immigrants and citizens and between the young and the old. The Personal Responsibility and Work Opportunity Reconciliation Act, a sweeping welfare reform bill signed into law by President Clinton in 1996, signaled a dramatic shift in U.S. income security policy for immigrants and the poor. Replacing the long-standing Aid to Families with Dependent Children program with Temporary Assistance to Needy Families, the new legislation imposed time limits on cash assistance benefits and required adults to work or participate in education or training programs in exchange for benefits.

Policy changes in the education and health domains also have far-reaching implications for the future welfare of Hispanics of all ages. Skyrocketing health insurance premiums have forced many two-parent working families to drop their health care coverage and also have taken a significant toll on small businesses, which have had to scale back benefits, increase copayments and employee contributions, or cease offering insurance plans altogether. In the last 3 years alone, businesses with fewer than 99 employees have witnessed a decline in health care coverage from 57 to 50 percent.1 This trend is particularly detrimental to Hispanics, who are more highly concentrated in small firms than are non-Hispanics. In 1997, for example, nearly half of Hispanic nonagricultural workers were employed in firms with 99 or fewer employees, compared with 43 percent of non-Hispanics.2

In the realm of higher education, waning federal support for low-income students to attend college has coincided with above-average tuition hikes designed to offset shortfalls in state and local budgets—just when growing numbers of students, an increasing number of them Hispanic, have been requesting financial aid. When the Pell program was created, for example, the maximum grant covered 84 percent of college expenses for the neediest students; today it covers just one-third of those expenses. (The subject of education is discussed in detail in Chapter 5.)


The United States features the most inequitable distribution of wealth and income among industrialized nations. Not since the Jazz Age of the 1920s has the imbalance in income and wealth been greater. Currently, the top 1 percent of all households enjoy more pretax income than the bottom 40 percent.3 Wealth inequalities are even more pronounced. The rise in

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