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Farewell to Welfare: A Working Solution

July 31, 1988|David T. Ellwood | David T. Ellwood, a professor of public policy at Harvard's John F. Kennedy School of Government, is the author of "Poor Support: Poverty in the American Family" (Basic Books)

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.

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