How a Family Allowance Could End Poverty

An old idea to keep women at home could expand economic opportunities for the nation’s poorest—and middle-class—families.

Bebeto Matthews / AP

Fifty years ago, Daniel Patrick Moynihan warned a confident government—on the brink of desegregating the South and granting its black citizens voting rights—that unless “a new and special effort” was made, America’s second Reconstruction would end tragically, like its first. It was the great hope of his (in)famous 1965 report to build support for a number of “radical” programs that would enhance the resources (and, by extension, the marital stability) of low-income black families. Stopping at liberty, in the naïve or dishonest hope that equality would somehow naturally follow, was not enough.

Moynihan’s report can be seen as a push for reparations of a kind. He stood out in the government for advocating “unequal favored treatment ... to compensate for past unequal treatment.” But while his report was an unusual, high-level statement of white responsibility, as Ta-Nehisi Coates argues, it also contributed to a mass refusal to face any. Moynihan’s focus on “broken homes” and “illegitimacy”—already loaded terms in the welfare fights of the early 1960s—“fell on all-too-receptive ears” in the years of rioting that followed. Conservatives, and more than a few liberals, blamed the problems of black America not on a long, obvious history of state and private discrimination, but on a deficient culture shaped by fatherlessness. But putting aside the question of whether single parenthood is a cause or consequence, by addressing fatherlessness, Moynihan advocated unique proposals in the 1960s to lower poverty and raise social mobility. One of them could still help millions today: a family allowance.

With inequality now at pre-New Deal levels, it could be that there is more opportunity than ever to pursue Moynihan’s top goal of the 1960s, the establishment of a children’s allowance, something that would help every American family, the poor especially, blacks most of all. “Family policy” is now a major area of concern for postindustrial democracies. As the number of dual-earner households and single mothers has exploded since the 1960s, so has the need for robust day care, family leave, and income stability. Conservatives normally argue that single and working mothers make a choice, and they are partly right—the sexual revolution did expand choice. Middle-class women, particularly older white mothers, joined the labor force in great numbers during the second wave of feminism in the 1970s—because they could. But for the working class and poor, especially black women, there was never a choice. They worked to make ends meet—not for personal fulfillment.

Successive waves of deindustrialization and globalization also eliminated most of the “male” breadwinner jobs that Moynihan had wanted so desperately to preserve in the 1960s. And the postwar era’s historically exceptional growth rates disappeared. (They are unlikely to return, short of a disaster.) These major economic transformations have occurred across the OECD nations, putting more and more strain on parents everywhere, including, increasingly, the middle class—particularly as the wealthiest 10 percent have taken an ever-growing share of national income. The cost of living and top-heavy wage distribution is now so bad that many scholars describe childbearing as a “new social risk,” comparable to the old social risks of industrialization, which prompted the creation of unemployment insurance in early welfare states. Without day care, paid leave, and child stipends (family allowances), parenthood threatens enormous cost and the loss of social mobility for many dual-earner homes.

Today, many women do not want to choose between motherhood and professional life, and they should not have to. But financial realities make it difficult to do both at once. Which is why Gøsta Esping-Andersen and other scholars argue that any up-to-date welfare state needs a strong family allowance. Nations differ in terms and conditions, but the program is simple: Families get a set or floating amount of money from the government during a child’s early years. Moynihan, a professor and a politician, had no more than a hunch in the early 1960s that this program would work. American scholars have still largely failed to study it. But now, with cross-national data pools, like the Luxembourg Income Study, it is far easier to measure the program’s effectiveness. And in Europe, the results are clear: Family allowances have drastically reduced poverty.

The child-stipend idea has its origins in early British feminism and in the pro-natal, labor-market goals of postwar European countries. And some welfare-state analysts are quick to point out that many welfare states have been slow to adjust their policies to the drastic changes in demographics and labor-market participation that have occurred in the last two generations. The welfare state, after all, was generally created for, and paid for by, male breadwinners. Explicitly and implicitly, it was designed to keep women in the home, and it typically ignored those working-class and poor mothers who had to double as family caretakers and laborers—at discriminatingly low wages.

According to Thomas P. Boje and Anders Ejrnæs, only a few countries, like Norway and Denmark, have a “weak breadwinner” model, in which assistance is designed for dual-earners, with greater workplace flexibility and more gender-neutral benefits, so that domestic responsibilities are shared and female work encouraged. And in some countries, like France and Belgium, mothers have a choice between the allowance, which enables them to stay at home with children, and day care, which enables them to pursue careers. Some countries in southern Europe and the former communist bloc still fail to recognize female equality and children’s needs in the dual-earner world that postindustrial global capitalism has made—providing little or no day care, paid leave, flextime, or allowances. But Jongmin Yang reports that over the last 15 years or so, many postindustrial nations have begun enhancing their old child-stipend programs and pursuing other creative strategies to meet this new social risk.

The United States, on the other hand, has been the least responsive—even while (and partly because) it has the second-highest rate of single motherhood in the developed world and the highest rate of single-mother poverty. America, Moynihan pointed out in the early days of the War on Poverty, had the ignominious distinction of having more children in poverty than any other wealthy democratic nation. Since the late 1970s, the average rate has remained at 20 percent. For black children, it is 40 percent. Belgium, the Netherlands, and the Scandinavian countries all have rates below 10 percent, more often well below. Most other European nations and Australia have rates around 15 percent. The price of child poverty has not been cheap. In 2008, a team of scholars estimated the cost at $500 billion per year in terms of crime, health, lower productivity, and other factors. That’s nearly 4 percent of GDP a year.

Moynihan wanted to help white, male breadwinners in the working and lower middle class—and to keep the marriages of the black working poor intact. But he also knew a child stipend would be enormously helpful to black women, who had greater levels of single motherhood and poverty than other groups. However patriarchal, it would have been a great relief for many, who never had the white, middle-class luxury of choosing between being a stay-at-home mom and having a career. It would be a relief still. A progressive version of the family allowance need not, and ought not, be male-centered. But any version of the program would go a long way toward helping America’s poor. In 2011, Steven Pressman estimated that a $4,000 family allowance, distributed to the parents of 40 million American children, would reduce child poverty to the level of other developed nations and save the United States $250 billion a year. Surely this is a more intelligent and decent use of tax dollars than, say, the $80 billion we spend on prisons every year (which Coates aptly describes as a kind of perverse “social-service program—providing health care, meals, and shelter for a whole class of people”)?

America’s welfare state began as patriarchal. Now it forces poor mothers to work and be away from their children. The largest programs currently helping single mothers are tax credits, which have subtly, quietly become the largest anti-poverty measures in the United States, as costly as the withered welfare program Clinton repealed. They are, however, off-limits to the unemployed, return nothing to those who earn little, and are too complicated for most of the poor to obtain without tax advisers (many of whom are unregulated and charge huge, undisclosed fees, literally stealing from the poor). The result is that, while poverty has fallen greatly since the 1960s, America’s neediest have only become worse off. Kathryn Edin and Luke Schaefer report that three-quarters of the nation’s poor receive no welfare at all and that an estimated 3.4 million children in the United States live on less than $2 per day for three months a year. Tax credits began with, and still enjoy, great support from big business and libertarian conservatives. But Democrats have offered no alternative.

Like Clinton and Bush, Obama has emphasized marriage as a solution to poverty, often appearing to diagnose the problem culturally, specifically to blacks. But while the government has spent hundreds of millions in aid to the poor, coaxing them to marry these last few years, the needle hasn’t budged. And even Charles Murray, intellectual architect of the Clinton repeal, has given up his prescription, which was based on the old argument that welfare breeds “illegitimacy” (which plateaued before the reform). Despite greater intellectual devotion to marriage—across class lines—a legal marriage faces a higher risk of failure in capitalist America, which spends the least on its citizens, than a common-law marriage does in socialist Sweden, which spends the most.

It is doubtful that cash assistance to the poor will be a major vote-getter anytime soon. But all three of the last presidents have made real efforts in the family-policy area to institute or expand paid leave. This is a tacit acknowledgment of the rise of the “sandwich generation,” the majority of middle-class parents, who now work, raise kids, and care for aging or sick family members under conditions of increasing economic hardship. Since the late 1990s, Democrats have formally and informally attempted to become policy leaders on this issue, as with so many in the past. Hillary Clinton, the Democrats’ presumptive presidential nominee, has recently suggested this might be a centerpiece of her administration as the first woman president. And yet, with her right-leaning economic views, she is not likely to push America to join the rest of the world in adopting child stipends, too—as Moynihan, her predecessor in the Senate, did 50 years ago.

But, with dual-income households now the overwhelming norm for the core electorate, the constituency for a diverse national family policy has never been larger. And for tens of millions of poor, working, and middle-class families, a universal program granting cash support for the most economically difficult years of parenthood would be a major relief. Economic pressure, in any case, is only likely to grow for a population that is already severely overworked, underpaid, and much deserving of a break.