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Regaining Lost Ground

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from the magazine

Regaining Lost Ground

Ten years after the publication of Losing Ground, its analysis of the underclass is widely accepted. Is the solution to abolish all federal welfare programs? Spring 1994

In 1968, as Lyndon Johnson left office, 13 percent of Americans were poor,
using the official definition. Over the next 12 years, our expenditures on
social welfare quadrupled. And, in 1980, the percentage of poor Americans
was—13 percent.

Moreover, basic indicators of well-being—participation in the labor force,
educational achievement, crime rates, and the like—took a turn for the worse
in the 1960s, most consistently and most dramatically for the poor. In some
cases, earlier progress slowed; in other cases mild deterioration
accelerated; in a few instances advance turned into retreat.

The question is why. Why at that moment in history did so many trends in
the quality of life for the poor go sour? The easy hypotheses—the economy,
changes in demographics, the effects of Vietnam or Watergate or racism—fail
as explanations. As often as not, taking them into account only increases the

Nor does the explanation lie in idiosyncratic failures of craft. It is not
just that we sometimes administered good programs improperly, or that sound
concepts sometimes were converted to operations incorrectly. It is not that a
specific program, or a specific court ruling or act of Congress, was
especially destructive. The error was strategic.

A government’s social policy helps set the rules of the game—the stakes,
the risks, the payoffs, the tradeoffs, and the strategies for making a
living, raising a family, having fun, defining what “winning” and “success”
mean. The more vulnerable a population and the fewer its independent
resources, the more decisive the effect of the rules imposed from above. The
most compelling explanation for the marked shift in the fortunes of the poor
is that they continued to respond, as they always had, to the world as they
found it, but that we—meaning the not-poor and the un-disadvantaged—had
changed the rules of the world. Not of our world, just of theirs. The first
effect of the new rules was to make it profitable to behave in the short term
in ways that were destructive in the long term. The second effect was to mask
these long-term losses—to subsidize irretrievable mistakes. We tried to
provide more for the poor and produced more poor instead. We tried to remove
the barriers to escape from poverty and inadvertently built a trap.

What, then, can be done? I begin with the proposition that it is within
our resources to do enormous good for some people quickly. We have available
to us a program that would convert a large proportion of the younger
generation of hard-core unemployed into steady workers making a living wage.
The same program would drastically reduce births to single teenage girls. It
would reverse the trend line in the breakup of poor families. It would
measurably increase the upward socioeconomic mobility of poor families. These
improvements would affect millions of people.

All these are results that have eluded the efforts of the social programs
installed since 1965, yet from everything we know, there is no real question
about whether they would occur under the program I propose. A wide variety of
persuasive evidence from our own culture and around the world, from
experimental data and longitudinal studies, from theory and practice,
suggests that the program would achieve such results.

The proposed program consists of scrapping the entire federal welfare and
income-support structure for working-aged people, including Aid to Families
with Dependent Children, Medicaid, food stamps, unemployment insurance,
workers’ compensation, subsidized housing, disability insurance, and the
rest. It would leave the working-aged person with no recourse whatsoever
except the job market, family members, friends, and public or private locally
funded services. It is the Alexandrian solution: cut the knot, for there is
no way to untie it. It is difficult to examine such a proposal
dispassionately. Those who dislike paying for welfare are for the proposal
without thinking. Others reflexively imagine bread lines and people starving
in the streets. But as a means of gaining fresh perspective on the problem of
effective reform, let us consider what this hypothetical society might look

A large majority of the population is unaffected. A surprising number of
the huge American middle and working classes go from birth to grave without
using any social welfare benefits until they receive their first Social
Security check. Another portion of the population is technically affected,
but the change in income is so small or so sporadic that it makes no
difference in quality of life. A third group comprises people who have to
make new arrangements and behave in different ways.

Sons and daughters who fail to find work continue to live with their
parents or relatives or friends. Teenaged mothers have to rely on support
from their parents or the father of their children and perhaps work as well.
People laid off from work have to use their own savings or borrow from others
to make do until the next job is found. All these changes involve great
disruption in expectations and accustomed roles.

Along with the disruptions go other changes in behavior. Some parents do
not want their young adult children continuing to live off their income, and
become quite insistent about their children learning skills and getting jobs.
This attitude is most prevalent among single mothers who have to depend most
critically on the earning power of their offspring.

Parents tend to become upset at the prospect of a daughter’s bringing home
a baby that must be entirely supported on an already inadequate income. Some
become so upset that they spend considerable parental energy avoiding such an
eventuality. Potential fathers of such babies find themselves under more
pressure not to cause such a problem, or to help with its solution if it

Adolescents who were not job-ready find they are job-ready after all. It
turns out that they can work for low wages and accept the discipline of the
workplace if the alternative is grim enough. After a few years, many—not all,
but many—find that they have acquired salable skills, or that they are at the
right place at the right time, or otherwise find that the original
entry-level job has gradually been transformed into a secure job paying a
decent wage. A few—not a lot, but a few—find that the process leads to

Perhaps the most rightful, deserved benefit goes to the much larger
population of low-income families who have been doing things right all along
and have been punished for it: the young man who has taken responsibility for
his wife and child even though his friends with the same choice have called
him a fool; the single mother who has worked full time and forfeited her
right to welfare for very little extra money; the parents who have set an
example for their children even as the rules of the game have taught their
children that the example is outmoded. For these millions of people, the
instantaneous result is that no one makes fun of them any longer. The
longer-term result will be that they regain the status that is properly
theirs. They will not only be the bedrock upon which the community is founded
(which they always have been), they will be recognized as such. The process
whereby they regain their position is not magical, but a matter of logic.
When it becomes highly dysfunctional for a person to be dependent, status
will accrue to being independent, and in fairly short order. Noneconomic
rewards will once again reinforce the economic rewards of being a good parent
and provider.

The prospective advantages are real and extremely plausible. In fact, if a
government program of the traditional sort (one that would “do” something
rather than simply get out of the way) could as plausibly promise these
advantages, its passage would be a foregone conclusion. Congress, yearning
for programs that are not retreads of failures, would be prepared to spend
billions. Negative side effects (as long as they were the traditionally
acceptable negative side effects) would be brushed aside as trivial in return
for the benefits. For let me be quite clear: I am not suggesting that we
dismantle income support for the working-aged to balance the budget or punish
welfare cheats. I am hypothesizing, with the advantage of powerful collateral
evidence, that the lives of large numbers of poor people would be radically
changed for the better.

There is, however, a fourth segment of the population yet to be
considered, those who are pauperized by the withdrawal of government supports
and unable to make alternate arrangements: the teenaged mother who has no one
to turn to; the incapacitated or the inept who are thrown out of the house;
those to whom economic conditions have brought long periods in which there is
no work to be had; those with illnesses not covered by insurance. What of
these situations? The first resort is the network of local services. Poor
communities in our hypothetical society are still dotted with storefront
health clinics, emergency relief agencies, employment services, and legal
services. They depend on local taxes or local philanthropy, and the local
taxpayers and philanthropists tend to scrutinize them rather closely. But, by
the same token, they also receive considerably more resources than they
formerly did. The dismantling of the federal services has poured tens of
billions of dollars back into the private economy. Some of that money no
doubt has been spent on luxury cars and summer homes on the Cape. Rut some
has been spent on capital investments that generate new jobs. And some has
been spent on increased local services to the poor, voluntarily or as decreed
by the municipality. In many cities, the coverage provided by this network of
agencies is more generous, more humane, more wisely distributed, and more
effective in its results than the services formerly subsidized by the Federal

But we must expect that a large number of people will fall between the
cracks. How might we go about trying to retain the advantages of a zero-level
welfare system and still address the residual needs?

As we think about the nature of the population still in need, it becomes
apparent that their basic problem in the vast majority of the cases is the
lack of a job, and this problem is temporary. What they need is something to
tide them over while finding a new place in the economy. So our first step is
to reinstall the unemployment insurance program in more or less its previous
form. Properly administered, unemployment insurance makes sense. Even if it
is restored with all the defects of current practice, the negative effects of
unemployment insurance alone are relatively minor. Our objective is not to
wipe out chicanery or to construct a theoretically unblemished system but to
meet legitimate human needs without doing more harm than good. Unemployment
insurance is one of the least harmful ways of contributing to such ends. Thus
the system has been amended to take care of the victims of short term swings
in the economy.

Who is left? We are now down to the hardest of the hard core of the
welfare-dependent. They have no jobs. They have been unable to find jobs (or
have not tried to find jobs) for a longer period of time than the
unemployment benefits cover. They have no families who will help. They have
no friends who will help. For some reason, they cannot get help from local
services or private charities except for a meal at the soup kitchen and a bed
in the Salvation Army hall.

What will be the size of this population? We have never tried a zero-level
federal welfare system under conditions of late-twentieth-century national
wealth, so we cannot do more than speculate. But we may speculate. Let us ask
of whom the population might consist and how they might fare.

For any category of “needy” we may name, we find ourselves driven to one
of two lines of thought. Either the person is in a category that is going to
be at the top of the list of services that localities vote for themselves,
and at the top of the list of private services, or the person is in a
category where help really is not all that essential or desirable. The burden
of the conclusion is not that every single person will be taken care of, but
that the extent of resources to deal with needs is likely to be very
great—not based on wishful thinking, but on extrapolations from reality.

To illustrate, let us consider the plight of the stereotypical welfare
mother—never married, no skills, small children, no steady help from a man.
It is safe to say that, now as in the 1950s, there is no one who has less
sympathy from the white middle class, which is to be the source of most of
the money for the private and local services we envision. Yet this same white
middle class is a soft touch for people trying to make it on their own, and a
soft touch for “deserving” needy mothers—AFDC was one of the most widely
popular of the New Deal welfare measures, intended as it was for widows with
small children. Thus we may envision two quite different scenarios.

In one scenario, the woman is presenting the local or private service with
this proposition: “Help me find a job and day care for my children, and I
will take care of the rest.” In effect, she puts herself into the same
category as the widow and the deserted wife—identifies herself as one of the
most obviously deserving of the deserving poor. Welfare mothers who want to
get into the labor force are likely to find a wide range of help. In the other
scenario, she asks for an outright and indefinite cash grant—in effect, a
private or local version of AFDC—so that she can stay with the children and
not hold a job. In the latter case, it is very easy to imagine situations in
which she will not be able to find a local service or a private philanthropy
to provide the help she seeks. The question we must now ask is: What’s so bad
about that? If children were always better off being with their mother all
day and if, by the act of giving birth, a mother acquired the inalienable
right to be with the child, then her situation would be unjust to her and
injurious to her children. Neither assertion can be defended,
however—especially not in the 1980s, when more mothers of all classes work
away from the home than ever before, and even more especially not in view of
the empirical record for the children growing up under the current welfare
system. Why should the mother be exempted by the system from the pressures
that must affect everyone else’s decision to work?

As we survey these prospects, important questions remain unresolved. The
first of these is why, if federal social transfers are treacherous, should
locally mandated transfers be less so? Why should a municipality be permitted
to legislate its own ALDC or food stamp program if their results are so
inherently bad?

Part of the answer lies in conceptions of freedom. I have deliberately
avoided raising them—the discussion is about how to help the disadvantaged,
not about how to help the advantaged cut their taxes, to which arguments for
personal freedom somehow always get diverted. Nonetheless, the point is
valid: Local or even state systems leave much more room than a federal system
for everyone, donors and recipients alike, to exercise freedom of choice
about the kind of system they live under. Laws are more easily made and
changed, and people who find them unacceptable have much more latitude in
going somewhere more to their liking.

But the freedom-of-choice argument, while legitimate, is not necessary. We
may put the advantages of local systems in terms of the Law of Imperfect
Selection. A federal system must inherently employ very crude, inaccurate
rules for deciding who gets what kind of help. At the opposite extreme—a
neighbor helping a neighbor, a family member helping another family
member—the law loses its validity nearly altogether. Very fine-grained
judgments based on personal knowledge are being made about specific people
and changing situations. In neighborhoods and small cities, the procedures
can still bring much individualized information to bear on decisions. Even
systems in large cities and states can do much better than a national system;
a decaying industrial city in the Northeast and a booming Sunbelt city of the
same size can and probably should adopt much different rules about who gets
what and how much.

A final and equally powerful argument for not impeding local systems is
diversity. We know much more in the 19S0s than we knew in the 1960s about
what does not work. We have a lot to learn about what does work. Localities
have been a rich source of experiments. Marva Collins in Chicago gives us an
example of how a school can bring inner-city students up to national norms.
Sister Falaka Fattah in Philadelphia shows us how homeless youths can be rescued
from the streets. There are numberless such lessons waiting to be learned
from the diversity of local efforts. By all means, let a hundred flowers
bloom, and if the Federal Government can play a useful role in lending a hand
and spreading the word of successes, so much the better.

The ultimate unresolved question about our proposal to abolish income
maintenance for the working-aged is how many people will fall through the
cracks. In whatever detail we try to foresee the consequences, the objection
may always be raised: We cannot be sure that everyone will be taken care of
in the degree to which we would wish. But this observation by no means
settles the question. If one may point in objection to the child now fed by
food stamps who would go hungry, one may also point with satisfaction to the
child who would have an entirely different and better future. Hungry children
should be fed; there is no argument about that. It is no less urgent that
children be allowed to grow up in a system free of the forces that encourage
them to remain poor and dependent. If a strategy reasonably promises to
remove those forces, after so many attempts to “help the poor” have failed,
it is worth thinking about.

But that rationale is too vague. Let me step outside the persona I have
employed and put the issue in terms of one last, intensely personal,
hypothetical example. Let us suppose that you, a parent, could know that
tomorrow your own child would be made an orphan. You have a choice. You may
put your child with an extremely poor family, so poor that your child will be
badly clothed and will indeed sometimes be hungry. But you also know that the
parents have worked hard all their lives, will make sure your child goes to
school and studies, and will teach your child that independence is a primary
value. Or you may put your child with a family with parents who have never
worked, who will be incapable of overseeing your child’s education—but who
have plenty of food and good clothes, provided by others. If the choice about
where one would put one’s own child is as clear to you as it is to me, on
what grounds does one justify support of a system that, indirectly but
without doubt, makes the other choice for other children? The answer that “what
we really want is a world where that choice is not forced upon us” is no
answer. We have tried to have it that way. We failed. Everything we know
about why we failed tells us that more of the same will not make the dilemma
go away.

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