Children's well-being, adult poverty, and jobs-of-last-resort

Abstract

This article addresses the failure of the 1996 welfare reform act (Personal Responsibility and Work Opportunities Reconciliation Act [PRWORA]) as an anti-poverty program demonstrated by the fact that approximately half of all ‘welfare leavers’ have fallen back into poverty within a year or two of their exit. The proximate cause is that, because of “barriers to work” or insufficient demand, leavers end up working too few hours over the course of a year. To address this failure, we propose a program of jobs-of-last-resort, called Promise of a Job (POJ), based on an examination of the design, costs, and results for a large number of transitional-job and welfare-to-work programs. In this article, we estimate POJ's costs per participant and overall costs of implementation, as well as the impact such a program would have on reducing adult and, particularly, child poverty. We find, in examining past data, that had POJ been applied to just those Americans who were on Aid to Families with Dependent Children (AFDC) in 1996, it would have raised almost 7 million children above the poverty line. We argue that this result (and similar results from any other program) should appeal across the political spectrum, to conservatives and liberals alike, because of the documented general agreement that child poverty is inconsistent with a widely held American value: the provision of equal opportunity for all.

Keywords:

• employment
• inequality
• low-income families
• welfare reform

Acknowledgements

Stevens and Mallon would like to thank Sheldon Danziger and Rebecca Blank, the directors of the NPC at the time, and the Center's many scholars and staff members, for providing an ideal environment for research and learning. All of the opinions or conclusions expressed in this paper are the authors’ alone, and are not necessarily those of the National Poverty Center, the Federal Reserve Board, the University of Georgia, or any other organization. For helpful comments and guidance, we are especially grateful to Allegra Baider, Richard Bavier, Vee Burke, Sheldon Danziger, Alan Hershey, Clifford Johnson, Elizabeth Lower-Basch, Mike Miller, Anne Nichols-Casebolt, Demetra Nightingale, Amy Rynell, Larry Root, Arloc Sherman, David Stoesz, Melissa Young, and two anonymous reviewers who offered insightful and very helpful feedback.

Notes

1. The assertions made in this paragraph are supported with detailed data in the section below entitled ‘The Outlook for Poverty and Joblessness in the Era of Welfare Reform.’ The poverty data cited in this Introduction are from the official poverty data for 2009 that were downloaded on March 18, 2011 from the official site for the Current Population Survey (CPS): http://www.census.gov/cps/.

2. The latest calculations for a ‘basic standard of living’ can be found in a recent paper by Lin and Bernstein (2008) at the Economic Policy Institute or by using the ‘Basic Needs Budget Calculator’ at the website of NCCP, the National Center for Children in Poverty (www.nccp.org). Lin and Bernstein calculated such budgets for different cities, regions, and different-sized families; overall, they found that in 2007–2008 more than double the number of American families fell below their minimum standard of living than fell below the poverty line (see Lin and Bernstein 2008, Table 1); their average basic budget for a four-person family was $48,778, considerably more than twice the poverty-level income of $21,200. Similarly, at the NCCP website, one can interactively calculate basic needs budgets for different locations and families of different sizes. For a good discussion of the concepts, see two of the earliest efforts: Renwick and Bergmann (1993) and Bergmann (1996). An earlier, but very good study is found in Chapter 2 of the book, All our Children, by Kenneth Keniston and the Carnegie Council on Children (1977). All of these sources agree that a minimum family income for the attainment of equal opportunity has always been far above an income at the poverty line.

3. See U.S. Census Bureau (2008, 13, Table 3).

4. Ever since public opinion polling was instituted, huge majorities have always supported the principle of equal opportunity, and equally, have supported the view that society has a duty to assure it. A typical question, posed by the Pew Research Center in both 1990 and 1997, goes as follows: ‘Our society should do what is necessary to make sure that everyone has an equal opportunity to succeed.’ In both 1990 and 1997, 91% of Americans either completely or mostly agreed with that statement. As it turns out, such overwhelming agreement was duplicated by the average of European countries in 1997 – France, Germany, Italy, Spain, and the UK (Pew Research Center for the People and the Press 2000, 42). When the Pew questions moved beyond equal opportunity to public support for the equivalent of a ‘safety net’ for the poor (adults as well as children), US support, although still a majority, fell off the low 60s in both 1990 and 1997 (42). However, when children were mentioned in questions relating to equal opportunity and/or the reduction of poverty, the US majority turned typically to near unanimity. A typical question from the 1960s, ‘Children should have equal education opportunity,’ found 98% in agreement and only 1% disagreeing (Westie 1965), as quoted in McCloskey and Zaller (1984, 83). In 2000, at the height of the opposition to welfare payments for adults, large majorities nevertheless supported reducing child poverty and allocating significant parts of the then-existing federal budget surplus to children's programs. Thus, in a poll commissioned by the National Center for Children in Poverty at Columbia University, 85% of those polled endorsed the goal of reducing child poverty by at least 50% in the current decade; further, almost two-thirds of the population supported investing 10% or more of the projected federal surplus to reduce child poverty (amounting to $40 billion per year). Weaver (2000) noted this pro-child phenomenon when pollsters in the 1990s posed questions on welfare payments. When the question was posed as ‘Are we spending too much, too little, or about the right amount on … welfare?’ without mentioning children, by 1993, 60% more people said ‘too much’ than said ‘too little.’ When the question was reframed to replace ‘welfare’ with ‘poor children,’ the percentages changed dramatically: approximately 40% more said ‘too little’ rather than ‘too much’ (173, Table 7–1). Of course, spending on children while not spending on their parents is easier said than done!

5. For an elaboration of the implications of the American notion of equal opportunity for children, see Stevens (2002). For a detailed look at the historical development of the concept of equal opportunity, see Stevens (2007).

6. Many measures are relevant as to whether particular children or groups of children reach ‘the starting line’ with the maximum development of (it is to be hoped) or a given degree of development of their capabilities. If the degree of attainment of any of these indicators for a given group is correlated significantly with any of the irrelevant factors noted in the text, then there is a prima facie case against the existence of equal opportunity. Consider, for example, the childhood death rate among various groups. If the infant mortality rate or childhood mortality rate is significantly correlated with race – as it is – then this is a prima facie rejection of equal opportunity. Other indicators related to equality at the starting line are childhood poverty, being the victim of violent crime or homicide, dropping out of HS, performance on standardized tests, and so on. All of the above are uncomfortably correlated with family income and race. (see Stevens 2002, Table 1) A prima facie violation does not necessarily imply an actual violation of equal opportunity; theoretically, for example, it could be the case that the correlation between, say, infant mortality and membership in a particular group is caused by a specific genetic condition that was shown to be related to an unavoidably higher rate of infant death. However, for the factors deemed ‘irrelevant’ in the text – race, ethnic background, religion, gender, and family income – the burden of proof is on those who wish to assert that correlations, such as that between infant mortality and race, do not imply a societal failure to provide equal opportunity.

7. Burke, Gabe, and Falk (2007; Summary page).

8. See, e.g., Andrews, Bowers, and Ben-Arieh (1999). The evidence is reviewed and more citations are provided in Stevens (2002), 10–12).

9. In fact, in an earlier publication, one of the present authors has argued for and costed-out a combined approach – involving universal health insurance for all children, universal preschool education, and job programs similar to POJ. See Stevens (2002).

10. See Paul Tough (2009) for an excellent review of the results for all of these programs.

11. See Annette Lareau (2003) for the development and elaboration of this point.

12. See Smeeding (2006) for a more recent comprehensive review of this area. Cross-country comparisons, because of the non-existence or lack of comparability of country-specific ‘absolute’ poverty measures, are required to use measures of ‘relative’ poverty. Typically, as discussed in Smeeding (2006), the measure is the percentage of a group falling below 50% of the median family income for the country.

13. This very argument is found, for example, in Haskins (2001). Haskins in his 2001 article lauded what he described as a record fall in 1997 and 1999 of the poverty rate for African-American children. What he did not say is that the level of the 1999 poverty rate for African-American children was still a dismal 33%. In a partial defense of Haskins, one can say that, when writing with others, e.g., Haskins and Primus (2001), his articles do report the levels of the poverty rate among African-American children.

14. For the poverty statistics cited in this section, see endnote 1, above, and the official historical poverty data at http://www.census.gov/hhes/www/poverty/histpov/histpov3xls (accessed December 5, 2008) and http://www.census.gov/hhes/www/poverty/data/historical/people.html (accessed August 15, 2011).

15. Loprest and Zedlewski (2006), 37, Table 16).

16. See Devere (2001), Appendix Table B-1).

17. The following quote from President Bush shows a realization of the seriousness of the lack of full-time jobs, at time when the unemployment rate was, compared to now, a relatively low 6%: ‘The thing I'm concerned about is people being able to find a job. We put the conditions in place for good job creation, but I recognize there's (sic) still people who want to work that can't find a job. And we're dedicated to hearing the voices of those folks and working hard to expand our economy.’ (George W. Bush, Remarks, printed in numerous media, following a Meeting With Business Leaders and an Exchange With Reporters in Chicago. http://bulk.resource.org/gpo.gov/papers/2003/2003_vol2_1215.pdf (accessed September 30, 2003)).

18. See, e.g., Economic Report of the President (2002, 370; Table B-42).

19. See, U.S. Department of Labor (2001).

20. Solow (1998) is based on his Tanner Lectures given in 1996 and 1997, long before the results on welfare leavers we have cited became available.

21. See National Transitional Jobs Network (2007).

22. See, e.g., Fraker et al. (2004), Exhibit IV.13.

23. The participants in this TJ program were all formerly incarcerated men and, therefore, do not represent the same population as TANF recipients. However, we believe the findings illustrate that the TJ model, while effective in connecting individuals to the workforce, is insufficient in facilitating long-term employment, and, therefore, not a potential route out of poverty for those who face multiple and serious barriers to employment.