By Cindy Rodriguez, Globe Staff and Bill Dedman, Globe Correspondent, 06/05/2002

he number of US households on public assistance dropped by one fourth in the 1990s, according to 2000 Census results released yesterday, spurred by new limits on welfare benefits and a long economic recovery.

But the poverty rate hardly dropped at all, suggesting that welfare reform was neither the cruel blow nor the helping hand for the poor predicted during the debate.

Of the largest 100 cities, 98 saw a drop in the percentage of people receiving welfare payments, according to a Globe analysis of the census data. Boston had one of the largest declines, as the percentage of households receiving welfare plummeted from 12 to 4 percent.

During the same period, half of the 100 largest cities experienced a poverty rate increase over the past decade. And the number of families living in poverty rose slightly, from 6.5 million to 6.6 million. In Massachusetts, poverty rose in eight of the state's 14 counties.

"What people hoped would happen is that women on welfare would be able to find jobs instead of getting poorer, and that seems to have happened, with a helping hand from the economy," said economist June O'Neill of Baruch College in New York.

But more pessimistic analysts noted that neither welfare reform nor unprecendented prosperity significantly reduced the poverty problem. For instance, the number of single mothers living in poverty remained the same in 1999 as in 1989, about 2.9 million.

The census results seemed to give ammunition to both sides in one of the most wrenching social policy debates of the 1990s, President Clinton's effort to "end welfare as we know it." In 1996, Clinton signed a sweeping overhaul of the Aid to Families with Dependent Children program, setting a five-year time limit on benefits.

In the same period, states adopted their own restrictions. Some required welfare recipients either to work or attend school or training classes. Since then, benefits under welfare, now called Temporary Assistance to Needy Families, have shrunk to about a quarter of their size a decade earlier. The nation's average welfare income per household was $3,032 in 1999, down from $11,961 in 1989, adjusted for inflation.

But benefits were reduced just as the United States entered a period of record-low unemployment in some parts of the country, including New England. In the late 1990s, some analysts predicted that former welfare recipients would be easily absorbed into the rapidly expanding work force.

On the other side, social workers and others said that single mothers, who with their children make up the majority of people on welfare, would flounder in dead-end, low-wage jobs unless they received proper training.

It remains unclear what became of the people who went off the welfare rolls. There are no national studies that have tracked individuals who no longer receive welfare. It will probably remain a contentious issue, with a congressional vote on reauthorizing the federal welfare law scheduled for the fall.

"Welfare reform is touted as a wonderful thing, but it's really masking extreme poverty," said Charlene Sinclair of the National Campaign for Jobs and Income Support, a coalition of grass-roots groups pushing for more liberal welfare benefits.

Sinclair said that food pantries and shelters, the everyday indicators of poverty, have seen a steady rise in the number of people knocking at their doors. And some of the poorest pockets of the nation tend to be in rural areas, showing a growing income segregation between suburbs and nonsuburban areas.

While welfare rates plummeted in Boston, the poverty rate remained the same, a signal that many continued toiling in minimum-wage jobs. But in surrounding Suffolk County and most of Massachusetts, the poverty rate increased, even as the boom economy lifted the state's median household income to $50,500, one of the highest in the nation.

Today, one in seven families in Boston is still poor, compared with one in 15 statewide. Overall in Massachusetts, the poverty rate was stuck at 6.7 percent of families, including 80,000 with children.

Nationally, the portion of families below the poverty level fell from 10.0 to 9.2 percent, but the actual number of families in poverty increased slightly -- from 6.5 million to 6.6 million -- because of population increases.

The highest poverty rates are in Newark, New Orleans, Miami, Rochester, and Buffalo, all places in which about one in four families live in poverty. Newark replaced Detroit as the nation's poverty capital.

Cities that saw increases in poverty rates included Long Beach, Los Angeles, Riverside and Anaheim; Washington, D.C.; and Yonkers and Newark in the New York area. But even those cities all saw decreases in welfare participation.

O'Neill, the Baruch College economist, argues that the falling welfare numbers signal smart socio-economic policy.

"For years, welfare included work and training programs, and it led to nothing," she said. "It didn't increase work participation, and it didn't reduce welfare. All it did was lead to a perpetuation of the welfare system. Under the old welfare system there was little incentive to work."

But Kate Kahan, the executive director of Working for Equality and Economic Liberation, looks at the same numbers and sees a different trend. Kahan said the amount that people are making is declining.

"Welfare reform is not helping people get out of poverty," Kahan said. "They may be working, but they are the working poor. What's really happening to those families is a story that's not really being told."

Cindy Rodriguez can be reached at rodriguez@globe.com.