across the board
BEYOND HANDOUTS
It takes three things for a person to move out of poverty. Getting government "entitlements" is not one of them.
April 1991
By Murray Weidenbaum

In 1935, President Franklin D. Roosevelt declared: "I can now see the end of public assistance in America." FDR's forecast did not come true despite the expenditure of what were then unparalleled amounts of Federal funds for a variety of programs to benefit the poor. The Administrations of Harry S. Truman and John F. Kennedy experienced the same frustration.

In 1964, President Lyndon B. Johnson announced: "The days of the dole in our country are numbered." Both the number of Americans in poverty and the size of the anti‑poverty efforts expanded under the four Administrations that followed. Federal spending designed to achieve the Roosevelt-Johnson goal has totaled hundreds of billions of dollars during this period. Over the past 25 years, Federal spending for income support to individuals multiplied more than five times in constant dollars. Any way you measure it, the outlay of public funds to end poverty has been expanding faster than inflation and population combined or the number of poor people.

It is inaccurate for Americans to castigate themselves as a heartless society. In recent Presidential Administrations -whether that of Jimmy Carter or Ronald Reagan‑ a far larger share of the nation's resources has been devoted to social welfare programs than during the years when Roosevelt or Johnson served in the Oval Office. The problem is that these expensive efforts, while producing some gains, did not bring about the promised results.

There is virtually universal agreement in the United States that those who are physically or mentally unable to support themselves should be helped by society, and that such assistance should be provided in adequate amounts and with a minimum of hassle.

But over the years, a subtle yet profound broadening has occurred in the qualification for such aid. Low or no income has become the only basis necessary to qualify for the receipt of welfare, food stamps, and many other types of assistance. The governmental fiscal payments that the public earlier had referred to as "handouts," "charity," or the "dole" have become transformed into "transfer payments" and, more recently, "entitlements."

And what has been the effect of these entitlements? According to economic researchers, they reduce people's willingness to work. If that sounds too jarring, let me resort to economic jargon. Researchers report "significant net negative impacts on labor supply." As would be expected, different researchers report different numerical results, but the overall negative impact of welfare on work effort is clear.

The realization is growing that many long‑term welfare "clients" are families or individuals beset by a multiplicity of personal and social problems that are deeply rooted and that do not yield to simple economic approaches such as payment of cash. You needn't be a right‑wing zealot to conclude that there is a powerful connection between the health of the family as an institution and the depth and pervasiveness of the poverty problem: Less than one out of every 10 married‑couple families is poor. Men living alone consis­tently have unemployment rates that are more than double those of family men. Nine out of every 10 families on welfare are headed by women.


212L-047-012
Children play police arrest in South Dallas, Texas, where poverty, drugs, and police busts are all part of growing up.

Without judging the moral bases of alternative life styles, it is apparent that there are very substantial economic consequences of such actions as having a child out of wedlock, getting divorced, or living with a partner without getting married. Much of the cost of such actions is not borne by the individuals making these decisions, but by society as a whole.

A persuasive argument can be made that in the case of poverty‑and in many other areas of human conduct‑individuals no longer bear the full consequences of their own actions or inactions. In olden times "a man who deserted his children pretty much insured that they would starve, or near to it, if he was not brought back, and that he would be horsewhipped if he were," said Senator Daniel Patrick Moynihan nearly two decades ago. "The poor in the United States today enjoy a quite unprecedented de facto freedom to abandon their children in the certain knowledge that society will care for them and, what is more, in a state such as New York, to care for them by quite decent standards."

The freedom Moynihan speaks about is in large part a result of a number of Supreme Court decisions that have invalidated efforts to focus welfare benefits on the family:

• In the Court's 1968 ruling on King v. Smith, an Alabama law denying welfare to households that have "substitute fathers" (adult males unrelated to the mother by blood or marriage) was struck down. That decision, in effect, made cohabitation profitable in most states.

• In its 1972 decision of Weber v. Aetna Casualty and Sure­ty Company, the Court ruled that worker's compensation benefits cannot be limited to legitimate children.

• In New Jersey Welfare Rights Organization V. Cahill, the Court's 1973 decision forbid state government preference for marriage over cohabitation in welfare programs.

• In 1973 the Court ruling on USDA y. Moreno invalidated a provision of the food stamp program basing household eligibility on ties of blood, marriage, or adoption.

In dealing with the problem of poverty, we need to recognize that it is not primarily a matter of how much money the government should spend on poor people. The basic issue is how to deal with poverty's root causes. To begin with, we must recognize that growth of the nation's economy is a necessary but by no means sufficient condition for eliminating poverty. An expanding economy creates new employment opportunities and makes it politically feasible to fund anti‑poverty programs. But economic growth alone cannot cure the problem of chronic poverty. Many of the long‑term poor have developed attitudes toward work that make it difficult for them to escape poverty.

As The New Consensus on Family and Welfare, a recent report issued by a panel of both liberal and conservative analysts, concluded, climbing out of poverty is not something that government can do for an individual. Rather, eliminating poverty is something that the individual must undertake, albeit with some help from society. More often than not it takes just three things for a person to move out of poverty: completing high school; getting and staying married, even if not on the first try; and staying employed, even if at modest wages, such as the statutory minimum wage.

Very few Americans, of any race, who are heads of households are even near poverty‑if they have a high school education. In 1986, less than 5 percent of black males and less than 10 percent of black females who met this requirement were in poverty. Of adult black males who were high school graduates in 1986, 86 percent had family incomes more than twice the poverty level.

Welfare (technically aid for dependent children) has come a long way from the original justification‑to help widows or divorced women make the difficult transition to a new status. In 1937‑38, the father had died or was incapacitated in 71 percent of the welfare cases. Since then, public assistance has in large measure become a program that finances out‑of‑wedlock births. In 1983, 46 percent of the children receiving welfare benefits were born out of wedlock.

Not only does welfare finance illegitimate births, it also seems to promote them. A Los Angeles Times poll in 1985 reported that 70 percent of poor women say it is "almost always" or "often" true that "poor young women have babies so they can collect welfare." Two thirds say that welfare "almost always" or "often" encourages fathers to avoid family responsibilities.

Several specific ways have been suggested to reinforce the responsibility of parents for the support of their children. They include allowing lawyers to accept child‑support cases on a contingency fee basis, instituting mandatory paternity findings to identify fathers of out‑of‑wedlock children receiving welfare, holding all fathers accountable for meeting child‑support obligations and making strong efforts to collect from them, requiring young mothers on welfare to complete high school and then seek work, and not paying welfare benefits to mothers under 18 who are living in "independent households."

The third key to solving the poverty problem is work experience itself. It is counterproductive to advise people on welfare to hold out for "good" jobs rather than to leave welfare status for "dead‑end" work. It seems obvious that if you stay on welfare, you'll never get any work experience.

Often negative attitudes rather than insufficient work opportunities keep people unemployed. Studies show that poor people do not keep the jobs that they find simply because they cannot get to work on time, will not work a full work schedule, and will not pay attention on the job. When out of work, the typical inner‑city youngster is more likely ° to spend his time "hanging out or watching TV" than engaging in activities likely to help in getting a job, says Richard Freeman, the Harvard economist.

It is becoming apparent that much of what used to be the conventional wisdom about a sound public‑assistance pro­gram is no longer widely endorsed; particularly unpopular is the keeping of able‑bodied people on welfare rolls for long periods of time. A new consensus is emerging in favor a of encouraging welfare recipients to get steady work.

The Working Seminar on Family and American Welfare Policy, which brought together researchers from a variety of policy institutes such as Brookings Institution and the Heritage Foundation, concludes that it is essential that all able recipients of welfare either be working or be enrolled ‑for just a limited period crowded of time, they stress‑ in education and training programs. Furthermore, the seminar members urge that "the overriding emphasis" be placed on personal responsibility for find­ing jobs in the private sector rather than on government job‑ government placement efforts. Work is seen as more than a way to cut eliminate welfare costs and promote self‑sufficiency. It confers emotional and psychological benefits on the recipients and is an opportunity for them to join the nation's mainstream.

Many proponents of making welfare recipients work want all recipients to hold a job‑‑even those with young children. This does not seem unreasonable. In 1986, 61 percent of all mothers worked (including 53 percent of mothers with children under the age of six), but only 9 percent of mothers on welfare. When a woman on welfare takes a full‑time job, the odds are overwhelming that she is lifting herself out of poverty. In every state, a woman holding a full‑time job at the minimum wage‑plus the remaining welfare benefits that she is even still eligible for‑provides enough income to lift the aver­age welfare family (one mother and two children) above the poverty level. And few women working steadily earn only the minimum wage, even without a high school degree. Most states have not given work requirements a high pri­ority. Saying you tried to get a job by registering with the employment service is usually sufficient to meet the regulatory requirements. West Virginia is an exception. Here, workfare (jobs provided by the state government) is seen as a way of providing public services that the state government cannot otherwise afford. Surveys of worksite supervision indicate that people taking part in the workfare program are, on average, about as productive as regular employees.

Some scholars, such as the sociologists Francis Fox Piv­en and Barbara Ehrenreich, have criticized the workfare ap­proach as a new form of "mass peonage," contending that forcing millions of poor Americans into an already over­-crowded, underpaid labor force will not cure their poverty.
These scholars' answer is to raise welfare benefits "at least to the poverty level."

Many researchers, however, assert that trying to increase government transfer payments to the poor sufficiently to eliminate poverty would place in jeopardy the willingness of many other workers to take a host of low and moderately aid jobs. In addition, there is solid evidence to support the widely held belief that welfare recipients migrate to states where they receive the best benefits package.

The new consensus among researchers on welfare policy is that it has been a mistake to offer welfare benefits without imposing on the recipients the same obligations that are assumed by other citizens‑to try to become self‑sufficient through education, responsible family behavior, and work.­

It is unlikely, though, that wholesale changes in life styles, attitudes, and other characteristics of large numbers of low‑income individuals can be achieved quickly. The uneven experience with work requirements and other efforts to form welfare suggest that changes should not be intro­duced on a massive scale or designed for swift results, but should be made in the spirit of experimentation. It is probably that the financial burden of maintaining large social wel­fare programs will continue to take a major share of the Fed­eral budget. Any improvements are likely to occur at the margins, but they surely are a worthwhile undertaking.

MURRAY WEIDENBAUM is director of the Center for the Study of American Business at Washington University in St. Louis. This commentary is adapted from a lecture he gave at Washington University's George Warren Brown School of Social Work. It draws on his recent book Rendezvous With Reality: The American Economy After Reagan (Basic Books).

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