Farewell to Welfare: A Working Solution
CAMBRIDGE, MASS. — It seems quite extraordinary. Until recently everyone seemed to hate the welfare system. Conservatives claimed it fostered illegitimacy and dependency. Liberals objected that paltry benefits left children poor. Recipients complainted of stigma, harassment and rules without real support. Yet now there is talk of a new consensus on welfare reform. The House has already passed one measure and the Senate version, championed by Daniel Patrick Moynihan (D-N.Y.), passed that chamber on a remarkable 93-3 vote. These efforts are an important beginning. But even bolder measures will be needed if the reformers’ ultimate goals are to be achieved.
The current transformation in the welfare debate can be traced to two key developments. First, we apparently have settled on a goal that everyone finds appealing: making public assistance transitional, by helping people achieve real independence and self-support. If that goal could be realized, we would no longer need to fight about whether to raise welfare benefits to reduce poverty or lower them to reduce dependency. We could concentrate on reducing both--poverty and dependency--by helping people help themselves.
Second, a variety of states have developed innovative work-welfare programs. One of the most prominent models is the Employment and Training/Choices (ET) program begun nearly five years ago in Massachusetts. A more recent example is California’s Greater Avenues for Independence (GAIN). While there are important differences, all the programs are designed to aid, encourage--and sometimes coerce--people into taking steps that will ultimately help them move from welfare to work. Recipients participate in job search, training and work programs. They sometimes qualify for transitional day-care and medical protection.
In many respects the changes are profound. Over the years the welfare system had become increasingly oriented toward one mission: Send checks out to the right people in the right amount. “Errors” had become the preoccupation of many administrators. Now, in Massachusetts, for example, offices are clearly oriented toward helping clients get work. In the waiting rooms, workers from the employment service often solicit clients for jobs. Welfare offices are judged not only on their “error rates” in processing claims, but also on the number of people they have placed in jobs. Similarly in California under GAIN, new recipients take skill tests; those who score poorly enter remedial education programs.
In state after state, newspapers now carry stories about recipients who credit new-found independence to a work-welfare program. Careful studies of a variety of state programs have consistently shown that benefits exceed costs, very often saving tax money in the long run. In San Diego, for example, a demonstration program that was a precursor of GAIN ultimately saved taxpayers from $2 to $4 for each dollar spent.
Still, not everyone is enthusiastic. Welfare recipients sometimes complain that they cannot get the intensive services they want and need. Some say they feel compelled to take jobs that offer little future. Some administrators are still obsessed with errors. Some critics properly point out that the evaluations have also shown that over-all earnings increases and welfare reductions are often modest. Moreover, the congressional reform bills do not contain nearly enough money to mount programs as intensive as GAIN or ET everywhere.
These programs have helped many people and represent an important shift in the nature of public support. By themselves, however, they will not eliminate welfare or insure that self-support is feasible. Then what are the next steps?
My book, “Poor Support,” argues that if we really are committed to ending poverty and the need for welfare, two types of policies seem essential: First, we must find a way to make work pay so that those who work are not poor. Second, we have to adopt a child-support assurance system to help single mothers balance their dual roles--nurturer, provider--and to ensure that absent parents properly support their children.
The sad truth is that even a woman who works all year at a full-time job paying $5 per hour, and who can get day-care at a very modest cost, will not be able to support herself and two children above the poverty line. She will probably have minimal medical benefits. In a fairly typical state, she will have only slightly more income than she would have received from welfare and food stamps, and she will have lost her Medicaid protection. No wonder those who administer work-welfare programs in Massachusetts have found that jobs paying less than $6 per hour and those without medical benefits are not likely to keep people off welfare permanently.
We can never help families become self-supporting if work does not keep a family out of poverty. Therefore, we must adopt policies to make work pay. In particular, we need to offer tax credits to the working poor, improve day-care support and raise the minimum wage to about $4.50 per hour--the level during most of the 1960s and 1970s, adjusting for inflation. Moreover, we must insure that all families have medical protection (something Massachusetts recently moved to do).
Yet even with these policies in place, single mothers would still have to work full time, all year, to escape poverty. Raising children and providing for them constitutes two demanding jobs. It is neither reasonable nor realistic to expect all single mothers to concentrate on work in the marketplace all the time. Part-time work would be an obvious way to balance the dual role. Indeed part-time or part-year work is the norm for married mothers. Less than one-third of all married mothers actually work full time all year.
But part-time work gets a single parent nowhere financially. It does not lift her off welfare. She ends up with little extra money beyond what welfare alone would provide. What we need is a way for single parents to work part-time and still escape--from poverty, from welfare. To do that, single parents will need some additional support.
There is an obvious place to look for it: the absent parent. Only one-third of of single mothers reported receiving any court-ordered child-support payments in 1985. Several studies suggest that $20 billion-$30 billion more could be collected from a vastly reformed child-support system, involving payments determined by a formula and collected by an employer, like taxes, perhaps as part of the Social Security system. If a mother could count on child support, even a modest amount of it, self-support would become far more practical.
The welfare reform bills do include provisions to strengthen child-support collection. But they lack a critical element: an insured benefit. For a mother to be able to combine earnings and child-support to achieve an adequate standard of living, she must be able to count on some stable child-support. If the absent parent is unemployed or becomes unemployed, payments are not likely to be collected. Once again the single mother would be left to fend for herself.
When someone is unemployed in an intact family, unemployment insurance is often available to help. Why not, then, child-support insurance to protect children when the family is not intact? When collections from an absent father fall below, say, $2,000 per child because of joblessness, government revenues could be used to ensure that mother and children would still receive this modest level of support. Under such a plan (now being tested in Wisconsin and elsewhere), single parents and children from all economic strata would be protected. Most families would simply be given the money collected from the father; some would receive collections supplemented by the government to reach the minimum.
A child-support supplement would not be a begrudging token of relief offered by a highly invasive welfare system and withdrawn if the woman works. It would focus on an absent parent as the person responsible for at least a modest contribution. When child support is being supplemented by government, the public would correctly perceive that an absent father was the one unable to provide adequately. Such a plan, in combination with policies designed to make work pay, would mean that any single parent working half-time in a minimum-wage job could escape both welfare and poverty.
Welfare reform represents an important beginning toward a lofty goal. But if the road is to lead to real independence, we must be still bolder. Policies to make work pay and to guarantee that single parents receive a base of child-support are essential. Then we might be able to do more than reform welfare, we could replace it.
