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Welfare: Where Do We Go From Here?

Round One -- Response
Posted March 12, 1997


Mr. Turner and Mr. Rector write as if the labor-market problems of welfare recipients take place in a vacuum, and as if the primary problems welfare recipients face are due to the rules of the AFDC program. I could not disagree more.

In America Unequal, which I co-authored with Peter Gottschalk in 1995, we presented detailed evidence on the economic difficulties facing less-skilled workers who do not receive welfare. We argued that it was the economy that generated unequal fortunes and diminished prospects, and that the welfare problem is best thought of as part of -- and not distinct from -- the larger problem of growing economic hardship. There is a great deal of agreement among labor economists of all political persuasions that since the early 1970s real wages have grown slowly. Economists also agree that the inequality of earnings has increased because of technological changes, the globalization of markets, and other structural changes in the economy that have reduced the demand for less-skilled workers. There may be 6 or 7 million people living in families headed by long-term welfare recipients, but there are many times that number living in families headed by a low-wage worker who does not receive welfare.

The falling real wages of less-educated male workers, the slow growth in the living standard of the middle class, and the problems faced by displaced workers, the unemployed, the working poor, and welfare recipients suggest that one cannot neglect the demand side of the labor market. In recent years as many as a quarter to a third of men between the ages of twenty-five and thirty-four have earned less than $15,000 a year. Welfare recipients as a group will fare much worse than this.

Certainly, some welfare recipients who face the new welfare rules will find jobs on their own, or with the help of state governments. But many will not be able to find steady employment. Mr. Edelman and I do not want to have the government write checks forever to those recipients who are willing and able to work. Rather, they need an entitlement to work -- which at a minimum means the entitlement to work for a welfare benefit if they are "truly needy" and cannot find an employer to hire them. I am arguing that they need access to the kind of subsidized health insurance and child care and community-service jobs that Mr. Turner and Governor Thompson are now providing in Wisconsin. Unfortunately, many governors are unwilling to spend their own funds for these programs, and the new law does nothing to prevent governors from simply cutting access to any assistance at all, especially in times of recession.

Mr. Rector acts as if welfare receipt itself has a large causal role in child development. I would argue instead that poverty has negative effects on child development. Poverty is the causal factor -- several recent studies have shown that child poverty has serious negative consequences for child health, behavior, and cognitive achievement.

For example, Sanders Korenman of Baruch College and his colleagues have found large differences between the socioemotional and cognitive development of children who grew up in long-term poverty and those who grew up in a family with a middle-class income, even when they control for the mother's test scores, educational attainment, marital status, and so on. Greg Duncan of Northwestern University and Jeanne Brooks-Gunn of Columbia University have published similar results based on studies of low-birth-weight babies. And other studies -- after controlling for family-background measures such as the mother's education and marital status -- have shown that children in persistently poor families have an IQ more than nine points lower than children who were never poor. Occasional poverty causes a four-point IQ drop.

Also, the Gautraux experiment in Chicago showed that the children of welfare recipients did much better both in school and in the labor market when a government program allowed them to move out of housing projects and into the suburbs. This suggests that the neighborhoods in which children live -- and the access to the opportunities that these neighborhoods provide -- are much more important for children's development than whether or not their mothers receive welfare.

Roundtable Overview

Introduction and opening questions by Jack Beatty

Round One -- Posted March 12, 1997

Round Two -- Posted March 25, 1997

Copyright © 1997 by The Atlantic Monthly Company. All rights reserved.
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