David Ellwood's Poor Support: Poverty in the American Family
Greenstein, Robert
POOR SUPPORT: POVERTY IN THE AMERICAN FAMILY, by David T. Ellwood. New York: Basic Books, 1988. 271 pp. $19.95. When Charles Murray's attack on the welfare system, Losing Ground, was published...
...In the years ahead, some of the best opportunities to help poor families will be outside the welfare system...
...So far, Ellwood's stance—defense of welfare benefits and skepticism about welfare-to-work programs— is compatible with that of traditional liberal welfare reformers whose principal goals have been to raise welfare benefits, extend coverage, and make work programs voluntary rather than mandatory...
...These programs have been found to increase employment rates among welfare recipients by only about three to eight percentage points...
...How on earth can AFDC be the cause of the growth in children in single-parent families when fewer and fewer children are getting benefits...
...Ellwood would fill this gap without provision of welfare benefits...
...By contrast, Ellwood's book gives policymakers some new intellectual and strategic handles...
...But there would be no ongoing welfare benefit...
...In response, Social Security and unemployment insurance were established...
...If, Ellwood asks, fewer than one in three mothers works full-time when there is a spouse to share household and child-rearing burdens, how can we expect or require full-time work by a single mother who has to shoulder these burdens alone...
...besides, workfare is not what he has in mind...
...Noting that welfare benefits vary widely among states, Ellwood also observes that if welfare had caused more single-parent families to form, rates of single-parent family formation would be greatest in states where benefits are highest...
...The government also sets a minimum child-support assurance level...
...Benefits in the typical—or median—state were 35 percent lower in 1988 than in 1970, after adjusting for inflation...
...It is a "refundable" credit, meaning that if the credit for which a family qualifies exceeds the family's income tax liability, the family receives a check from the IRS for the difference...
...Those who call for an EITC increase instead of a minimum wage hike, such as the editorial writers at the New York Times, would do well to examine this part of the book...
...The proposals to make work pay and establish a child-support assurance system—and even his proposal to replace public assistance for poor two-parent families with transitional assistance and a guaranteed job—can be pursued without converting cash assistance for single-parent families into a time-limited program...
...He calls for universal health-care coverage (although he does not take a strong position on how best to provide or 272 • DISSENT finance it, a matter largely beyond the scope of his book...
...Furthermore, reliance on welfare is demeaning, stigmatizing, and isolating...
...No policy institute or think tank has put up large sums to promote the book...
...Even if such a mother works half-time, she will still be far below the poverty line without ongoing cash assistance...
...securing the adoption of this critical provision will be far more difficult...
...Suppose one of her children is sick or disabled or she has just given birth...
...Even the ultraconservative Heritage Foundation has been espousing it of late...
...Ellwood finds little basis for these claims...
...Ellwood's proposal to adjust the credit by family size is not novel...
...Acceptance of the job would generally assure that the family would be raised above the poverty line without any need of welfare if the job were full-time or if the family were also receiving child support...
...At the state level, battles to raise low welfare benefit levels remain as important as ever...
...For this reason, despite its lesser renown, Poor Support is likely to have a more lasting impact than Murray's Losing Ground...
...The number of black children in female-headed families grew by more than 25 percent between 1972 and 1984, while the number on AFDC fell by 15 percent...
...Simply mandating work and cutting off assistance regardless of the circumstances may cause some of these families to sink...
...Poor Support both synthesizes the findings from his earlier work and moves beyond it...
...Unfortunately, however, establishment of a government-guaranteed minimum child-support payment level is not part of that law...
...Yet to this reader, Ellwood fails to make the convincing case for this proposal that he makes for his "make work pay" and child-support assurance ideas...
...live in two-parent families...
...Consequently, we need a new universal insurance program, financed in part by contributions from the family (i.e., the childsupport payments from the absent father) to reduce this insecurity and protect children growing up in single-parent families against destitution...
...Yet for single parents, full-time work often is not an option...
...The percentage rises with the number of children for which the father must provide support...
...In 1989, most families with earnings between about $5,000 and $12,000 qualify for a credit of at least $700...
...After all, a family's needs increase as family size grows, and both the poverty line and welfare benefits increase with family size...
...Recognizing that, even with these steps, working families could still remain poor if they had to incur large health-care or child-care bills, Ellwood also recommends reform in those areas...
...Currently, the size of a family's credit is based solely on the family's income level...
...Murray's book led conservative policymakers to a dead end...
...Accordingly, he proposes establishing a different standard for single mothers: If a single mother works at least halftime, she and her family should be assured they will not be poor...
...With the EITC widely regarded as "pro-work" (only working families are eligible) and "pro-family" (only families that live with and support a child are eligible), the notion of adjusting the EITC by family size now has nearly as much support on the right as on the left...
...The most promising are his proposals to "make work pay" (and thereby assist low-income working families) and to establish a uniform child-support assurance system...
...These families would be eligible for some cash assistance, but it would not be welfare as we know it today...
...But Ellwood shows that full-time work by mothers not on welfare is far from the norm: in 1984, only 27 percent of all married women living in families with children worked full-time year-round...
...Without this feature, the insurance element is missing, and economic insecurity remains a major threat to single-parent families...
...Half of all poor children in the U.S...
...Restoring the minimum wage to its historic level would lift three-person families with a full-time worker out of poverty...
...David Ellwood's Poor Support: Poverty in the American Family has not attracted the attention that Losing Ground did...
...Instead, he proposes a national child support assurance system...
...The fact that there was little or no empirical evidence to support much of Murray's argument (and a substantial body of evidence to refute it), and that much of the data Murray cited in support of his case was badly misread or misused, did not seem to matter...
...Wages, however, do not...
...Throughout most of the 1960s and 1970s, full-time year-round work at the minimum wage raised a family of three slightly above the poverty line...
...Accordingly, Poor Support focuses on poor two-parent families as well as on single-parent families...
...It is an incisive, often brilliant, analysis that remains scrupulously faithful to the data and research evidence in the field...
...Moreover, the failure of the 1988 welfare reform law to materially improve welfare benefit levels provides further evidence of the difficulty of using the welfare system to make major strides in reducing poverty among low-income families...
...More important, it breaks new ground in fashioning a set of public policies that could substantially improve the lot of many poor families—and that may, at least in part, be politically achievable...
...While these SPRING • 1989 • 271 programs look like "decent investments," he cautions that no careful evaluation has found them to make more than a "tiny dent" in moving recipients from welfare to employment...
...What Ellwood adds, however, is an analysis showing that only a combination of a minimum wage increase and a large boost in the EITC can achieve the goal of lifting families with a full-time worker out of poverty...
...An economist and professor at Harvard's Kennedy School of Government, Ellwood has been known in academic circles for several years as one of the nation's foremost researchers on poverty issues...
...As Ellwood notes, nearly half of these poor two-parent families include a full-time worker...
...Ellwood makes a compelling case for adding this element to the child-support system in the future...
...To achieve the goal, Ellwood advocates three basic steps: raising the minimum wage, expanding the earned income tax credit, and making health-care coverage and child-care support available to all of the working poor...
...The principal cause of their poverty thus is clear: low wages...
...Today, after eight years without a minimum wage increase, full-time year-round work at the minimum wage leaves a family of three some $2,900 below the poverty line...
...The EITC is a credit for which working families with at least one child and income below about $19,000 now qualify...
...274 • DISSENT...
...Raising the minimum wage and enlarging the earned income credit would help boost these mothers' incomes, of course...
...They aren't...
...Unlike calls to raise welfare benefits to the poverty line, this goal should be acceptable across the political spectrum...
...The life situations facing those single mothers who tend to remain on welfare for long periods of time are often complex...
...The child-support payments are then automatically deducted from the father's paychecks by his employer and transferred by the government to the mother...
...Fortunately, Ellwood's other recommendations do not hinge on adoption of this one...
...the maximum credit is $910...
...Yet a mother who works half-time at or near the minimum wage will still be far below the poverty line...
...If the father's payment falls below this level— because his earnings are too low or he is unemployed, sick, or disabled—the government makes up the difference...
...The mother is thus guaranteed (or "assured") a certain basic level of child support...
...There is thus a need for a wage supplement for poor families that is geared to family size—precisely what Ellwood's proposed EITC would be...
...Should we still terminate all cash aid after three years and compel her to work...
...Not even the Reagan administration dared endorse his proposal to abolish virtually all low-income benefit programs...
...Ellwood addresses this matter squarely, arguing that society should not expect full-time work of single mothers...
...He explains that this pattern holds for black as well as white children...
...Yet this is far from where Ellwood comes out...
...Both full-time and part-time jobs would be made available...
...With the conservative Manhattan Institute bankrolling an artful public relations campaign, Murray and his ideas were soon being widely discussed on television, in newspapers and magazines, and in policy circles...
...When Charles Murray's attack on the welfare system, Losing Ground, was published in 1984, it drew a great deal of attention...
...To those seeking to make these nonwelfare advances, Poor Support can function as something of a guide...
...Under the system, originally designed by Irwin Garfinkel of the University of Wisconsin and now being partially tested in Wisconsin, paternity is established at birth for most children...
...Public attitudes toward welfare will not allow it...
...Those pushing for tougher work requirements in public assistance programs commonly state that since most mothers who are not on welfare now work outside the home, welfare mothers should too...
...Thus, if a family has income too low to owe federal income tax but qualifies for a $700 earned income tax credit, the IRS sends the family a check for $700...
...I look for some of these handles to be seized by creative legislators and advocates in the years ahead...
...Coupling transitional welfare assistance with a guaranteed job may make sense for two-parent families...
...Suppose that, for some reason, the child's father could not be located, no child-support award has been established, and that therefore no minimum child-support assurance payment is being provided...
...What would be provided is a regular job, at a substantially increased minimum wage, and with greatly expanded EITC benefits to supplement the wages...
...But . . . it fell...
...He also proposes making the existing federal child-care tax credit into a refundable credit...
...Since the credit currently is not refundable, working families too poor to owe federal income tax receive no child-care subsidy through the credit while many affluent families do...
...Ellwood envisions this system as an addition to the Social Security Act...
...If the father does not marry the mother (or the parents are divorced or legally separated), he is ordered to make child-support payments, with the amount of the payments being determined in accordance with uniform government standards based on a specified percentage of the father's income...
...However, these are often battles to keep matters from getting worse—to prevent benefits from falling even further behind inflation...
...Ellwood explains that the impact of welfare-to-work programs is small...
...For these families, Ellwood would convert welfare into a less stigmatized system of transitional assistance that provides both cash benefits and "serious" educational and social support for a period of eighteen months to three years...
...Moreover, Ellwood maintains, while welfare does not appear to deepen such social problems as child poverty, single parent families, and joblessness among young minority men, neither does it offer much of a solution to these problems...
...This would prove highly beneficial to poor two-parent families...
...In a devastating critique of the Murray thesis, he finds that from 1972 to 1984, the number of children in female-headed families grew by three million while the number of children receiving welfare benefits (i.e., benefits under the Aid to Families with Dependent Children program) declined by more than half a million...
...Herein lies a key element of the book's message...
...The Tax Reform Act of 1986, which provided more benefits to low-income families than any other piece of legislation in more than a decade, was a vivid illustration of this principle...
...SPRING • 1989 • 273 Books Ellwood emphasizes that this is not a proposal to make recipients "work off" their benefits...
...Hence, Ellwood proposes establishing a national standard or goal: If a parent works full-time year-round, the family should not have to live in poverty...
...Making the credit refundable would extend these subsidies to lower income families (although it would not do much to ensure that child care of adequate quality is available to low-income families...
...In such families, one parent will generally be available to work full-time, and the families would end up considerably better off under the Ellwood proposal than they are today if they remain on public assistance...
...Poor Support argues persuasively that we are unlikely ever to achieve "humane welfare" in this country...
...If AFDC was [influencing] women to become single parents, the number of recipients would have grown along with the number of single parents...
...At the conclusion of this period, if the family does not have employment, a family member would be guaranteed a minimum-wage job...
...Welfare benefits would no longer exist...
...On the contrary, the main effect of lower welfare benefits is simply to make poor families poorer...
...In lieu of welfare benefits, Ellwood proposes a series of "non-welfare" supports...
...The experiment has demonstrated that lower welfare benefits do not materially affect the formation of single-parent families or out-of-wedlock births, Ellwood reports...
...For single-parent families, however, the proposal seems unnecessarily rigid and harsh...
...A number of the elements of the proposed child-support assurance system, including the use of state standards to set child-support award levels and the mandatory withholding of child-support payments from absent fathers' paychecks, were included in last year's federal welfare reform law and will take effect in the 1990s...
...Nor does its message fit neatly into a twenty-second sound bite, unlike Murray's argument that social welfare programs have done more harm than good and ought to be abolished...
...With substantially greater returns from work and more adequate child support, many of those who are now poor and on welfare will be off the welfare rolls and, more important, out of poverty...
...In the 1930s, he states, the most severe causes of economic insecurity were old age and unemployment...
...It fails to provide poor families a route to escape from poverty in a manner that helps them achieve some measure of autonomy and control over their lives...
...Moreover, "there is not a shred of evidence to justify the claim that imposed work changes attitudes and expectations for the better...
...Although Poor Support was written before the new federal welfare reform law was enacted in October 1988, the book also offers an appraisal of the type of welfare-to-work programs that form the centerpiece of the new law...
...The potential for major advances, especially at the federal level, now seems greatest outside the traditional welfare structure...
...Under Ellwood's proposals, full-time work would thus provide a route out of poverty...
...The last major piece of Ellwood's schema is directed at poor single-parent and two-parent families in which the parents either do not have jobs or work only part-time and lack enough income from work or child support to escape from poverty...
...Larger families with children could also be removed from poverty if the federal earned income tax credit (EITC) were adjusted for the number of children in a family...
...But it will have been much reduced...
...Ellwood's earlier work is reflected in sections of the book that examine the claims of Murray and other conservatives who argue that welfare has only made things worse and has fostered increases in the number of single-parent families and out-of-wedlock births...
...he asks...
...Ellwood calls for expanding the credit substantially, principally by increasing it as family size rises...
...Suppose the mother has several young children...
...Today, he contends, the greatest course of economic insecurity is single parenthood...
...Our goal should not be to reform welfare, Ellwood argues, but to replace it...
...In effect, Ellwood tells us, we have been conducting a national experiment in which benefits are allowed to vary widely by state and in which the purchasing power of benefits in most states has been reduced sharply in recent years...
...Yet Ellwood's volume is what Murray's failed to be...
...True, the welfare system will not then have been fully "replaced...
...The result is that large working families with several children are more likely to be poor than smaller families are...
Vol. 36 • April 1989 • No. 2
