Ending Welfare Reform as We Know It

Ending welfare as we know it would appear to have a fighting chance at last. Not only has President Clinton remained committed to this campaign promise, but key members of the centrist coalition behind the "historic" Family Support Act (FSA) of 1988 are now making policy as Clinton appointees. The FSA requires states to offer a job opportunities and basic skills (JOBS) program and transitional child care and Medicaid to mothers at risk of long-term welfare dependence, who are, in turn, expected to go to work. The lightly funded act seeks to replace "entitlement" with "mutual obligation" as the theme of welfare administration. Moreover, the coalition's long-time mentor and the FSA's champion, Senator Daniel Patrick Moynihan, now chairs the Senate Finance Committee. Seemingly, this presents an opportunity for a badly needed triumph of common sense, policy analysis, and liberal imagination. However, "welfare reform" will remain an oxymoron unless political expediency and intellectual inertia yield to some significant but unappreciated facts.

The economic prospects of low-skill workers worsened dramatically in the 1980s and aren't recovering. Low-skill men, and young minority men in particular, face especially bleak job possibilities; low-skill women face stagnant earnings. To push ill-prepared young mothers and nearly disabled older women into this deteriorating labor market while seeking to wring support from the increasingly destitute fathers--central aspects of the administration's welfare reform--makes no sense. Worse, such a scheme fosters a widening gender gap between "welfare work" for women--second-rate welfare department programs to make women behave like workers--and "income work" for men--labor department training to reduce unemployment and raise productivity.

Before too much damage is done, there must be an end to welfare reform as we know it and a return to basics: providing economic opportunity for all Americans.


Drawing on a lengthening tradition of poverty research and policy advocacy, President Clinton's Working Group on Welfare Reform, Family Support, and Independence continues the interminable tinkering with welfare policies that began in the 1960s. The original concern for fighting poverty at its roots, however, has narrowed to a preoccupation with the welfare dependency of single mothers and their children who are long-term recipients of Aid to Families with Dependent Children (AFDC). Increasingly, moreover, "sticks," such as welfare time limits and work requirements, are supplanting "carrots," such as services and choice, as the most popular means for channeling these families into the mainstream.

The fact that reductions in welfare rolls may save some money cannot explain this political obsession. The real reason is ideological. During the 1980s, liberals joined conservatives in viewing these women as symbols of tolerance for heedless sexual behavior and unwholesome family life and of weakened commitment to competence, work, and responsible living. The facts that only 10 percent of AFDC mothers are "seeking work" and that over 45 percent of them--approaching 2 million women--have been on the program for more than two years have become politically indefensible. "Welfare policies should not make it easy for teen mothers to establish separate households," New York Governor Mario Cuomo said in a June 28 letter to the Wall Street Journal. Said sociologist Christopher Jencks in Rethinking Social Policy: "Until liberals transform AFDC, so that it reinforces rather than subverts American ideals about work and marriage, our efforts to build a humane welfare state will never succeed." The alleged effect of AFDC on work incentives is far from the whole story, however.

Developing within the peripheral vision of veteran welfare reformers has been another analysis of persistent poverty and income inequality. Conducted largely by a more recently mobilized group of researchers, this discussion centers on the performance of the economy and its labor markets, on the levels and distribution of earnings from work, and on the economic prospects of men as well as women. Concern focuses on the fact of sharply growing inequality of earnings and family income during the 1980s and with its causes: disappearing opportunity for the less skilled combined with growing earnings and experience premiums.

Not surprisingly, because men's economic prospects are often the subject of this research, it suggests policies to ameliorate the effects of structural unemployment and to improve labor force productivity. Indirectly, this inequality research supports William Julius Wilson's view that inner-city men's poor earnings prospects discourage stable unions between men and women and deprives inner-city kids of child support, promoting welfare dependency. But this research has had little impact on the ongoing debate over welfare reform, which remains mesmerized by nonworking poor women.

This bifurcated thinking has driven welfare reform to a profound moral absurdity. In the face of clear evidence of a falling equilibrium wage and declining employment opportunities for the less skilled, welfare reform has come to mean increasing the supply of low-skill labor by pushing welfare mothers by any politically feasible combination of carrots and sticks into a labor force that has a declining capacity to absorb them, accepting meager short-term earnings gains as suitable justification. It is hard to miss the implication, moreover, that these single women are not to be valued or trained as parents and homemakers despite the fact that competent, attentive parents are critical to the safety, education, and development of poor children.

The absurdity doesn't stop there. Elected officials facing fiscal stress are, while pushing women into the work force, undermining their chances by encouraging substitution of low-wage, low-benefit, part-time workers for permanent employees with good jobs; closing or downsizing programs on which many poor communities and households depend; and freezing or reducing government payrolls, one of the most important sources of careers for motivated urban workers, especially minority women. All the while, the private sector, facing mounting foreign competition, regulatory uncertainty, and technological advances, is restructuring to reduce labor costs and increase productivity, further depressing the wages and working hours of young and relatively less skilled workers.

The consequence of all these disasters for low-skill labor markets is that the economic mobility of the poor is in all likelihood declining and the probability is rising that low-income families and individuals will remain poor for a long time to come. Ending welfare as we know it by imposing welfare time limits and pushing marginally prepared mothers from welfare rolls into lousy jobs with no child care will make these families' existence more precarious, uncertain, and shielded from observation except through the grim statistics of crime, homelessness, and family disintegration.

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The current welfare reform debate reflects ways of thinking about poverty and methods of research that have hardened over time into an orthodoxy. At any given time, access to material rewards is distributed in a particular way across the population. The most popular measures of such distributions are based on the before-tax income of families and its related factors--race, marital status, educational attainment, family size--as captured in data collected by the Bureau of the Census. We readily discover in these data that a significant proportion of families is poor in some absolute or relative sense. (The appropriate sense is, of course, sharply disputed.) We further discover that those with low incomes are disproportionately composed of minorities, people with low skills, female heads of families, and residents of inner-city neighborhoods.

Three classes of explanations account for persistent family poverty. One comprises barriers to economic mobility, such as racial discrimination by employers, lack of day care, or non-availability of low-skill jobs (or very high transactions costs to get and keep jobs). A second focuses on problematic behaviors of the poor, such as bearing illegitimate children or dropping out of school, or on psychological states that have been internalized into anti-social behaviors and attitudes that further stigmatize them in employers' eyes. A third focuses on skill levels that, because of bad schools and lack of motivation to learn, are too low to command a living wage or any wage at all. In the 1980s, the first of these explanations became unfashionable, even though the barriers to economic mobility rose. Policy emphasis shifted to the second and third explanations.

The policy goal, however, remained one of increasing the measured incomes of the poorest families, preferably via work effort, rather than addressing inequality per se. The simplest and cheapest of such policies is income maintenance, but such "outdoor relief" has long been discredited because it apparently reduces work effort. More sophisticated policies aim at lowering barriers to work while providing necessary relief--for example, expanding day care and health coverage--or at changing counterproductive behaviors, using relief policies as leverage. The emphasis since enactment of the FSA has been to condition relief and barrier-reducing opportunities on recipients' diligence in seeking self-improvement and work.

The track record of these policies is consistently disheartening. The anti-poverty effectiveness of government programs is lower today than in the 1970s, and pre-transfer poverty is, if anything, rising. Thus poverty rates do not fall; indeed, though they bounce about, they are higher than they ought to be based on overall growth trends of the 1960s and 1970s. The earnings gains from welfare-to-work policies and job training are consistently far too small to alleviate poverty, much less to improve economic mobility or create work incentives. No one, moreover, not even their supporters, expects the Family Support Act or the Job Training Partnership Act (JTPA) as currently administered to alter this picture.

But the persistent failure of these policies hasn't prompted a reexamination of their premises. Because the 1980s economy was relatively robust, blame for policy ineffectiveness could be variously assigned to conservative social welfare budgets, to mounting federal deficits that induced an advocacy gap even among traditional, egalitarian liberals, and to the counterproductive behavior of the poor themselves. With employment growing and unemployment falling to 16-year lows during the Reagan years, liberals and conservatives alike could wonder, why aren't these people working?

Clinton's election has not altered this mindset. His goal is to finish the job begun by the Family Support Act to transform welfare into a "transitional assistance system" and get "these people" to work. As for the rest of the poor--men, the young, older workers, the marginally employed--they should work and earn. If they qualify for good, well-paying jobs--and sincere efforts are promised by the administration to "make work pay" (although most have been deferred)--so much the better. If picking fruit is what's available, though, they had better pick it. In the meantime, liberals have joined conservatives in cutting or eliminating General Assistance, the main source of cash relief for these "miscellaneous poor."

If those queuing are patient and communicate mainstream values, employers will realize that "good workers" are available and will create jobs. Labor markets will clear, the welfare rolls will fall to truly transitional levels, and a "normal" pattern of economic mobility will be restored.


Really? There is something wrong with this Pollyanna-ish picture. Despite the economic recovery of the early 1980s, the increase in earnings inequality that began during the 1970s became pronounced, indicating, as David Cutler and Lawrence Katz have put it in a 1991 Brookings paper, "a break in the relationship between macroeconomic performance and inequality beginning about 1983." Because average earnings growth during this period was slow, this increasing inequality meant that the rich became richer, and the poor poorer, in absolute as well as relative terms.

This development has been particularly striking for men. Their wages have been stagnating since the early 1970s. From the 1980s on, low-wage male workers have experienced substantial declines in real wages. For low-wage women, the story isn't quite as bleak; real-wage declines have been relatively small. Higher wage workers of both sexes have seen their earnings increase significantly, thus spreading their earnings distributions.

The increase in earnings inequality has been pervasive, occurring within both manufacturing and service sectors, for both men and women, and for those of varying levels of age, experience, and educational attainment--that is, for older, experienced workers as well as for new entrants to the labor force. But it has been occurring between groups as well, with particularly devastating consequences for those at the bottom of the skill ladder. There was a dramatic increase in the education premium and an increase in the age premium as well. Younger, less-educated male workers experienced a virtual collapse in their earnings and in hours worked, though older, less-educated men experienced earnings declines too. One consequence, as Wilson noted in The Truly Disadvantaged, has been falling marriage rates, affecting family income prospects. Fortunately, young, low-wage women have been faring somewhat better, and women's wages on the average have been catching up with those of men. At the low-wage end, however, even women's earnings prospects have been stagnant at a time when women are assuming greater long-term importance as family breadwinners.

The fact that both employment and wages have been declining for low-skill cohorts might suggest that the cause is deterioration in the quality of labor services offered because of increasing problems of educational preparation and socialization. But that interpretation is refuted by evidence that these declines have been uniform across age cohorts, not just affecting younger, less capable workers. Concluded Chinhui Juhn, Kevin Murphy, and Robert Topel in a Brookings paper, "We are left with little doubt that secular increases in both unemployment and nonparticipation are demand driven." In other words, as the economy restructures itself, relative demand rises for those with higher order skills--and there is net job creation--but falls precipitately for the relatively unskilled. Moreover, they say that because of discouraged worker effects, "changes in unemployment understate the effect of declining demand on male joblessness and welfare, making unemployment a poor measure of labor market performance." Such findings are reinforced by survey responses from the Current Population Survey. According to Juhn, Murphy, and Topel, the reason "could not find work" increased from about 8 percent between 1967 and 1969 to 27 percent between 1986 and 1987 among annual nonworkers, and from nearly 4 percent to over 16 percent for annual nonparticipants in the work force, thus accounting for the decline in hours worked over the period and suggesting that workers are discouraged.

The effect of race is striking. Full-time employment rates for young black men with some college education have deteriorated from 48 percent in 1967 to 37 percent in 1989. Nonemployment rates among young black high school dropouts have risen from 10 percent in 1967 to over 35 percent in 1989. The full-time employment rates for these uneducated men have correspondingly dropped from over 46 percent to around 20 percent, although--and this is significant--their prospects do get better as they age; nearly 45 percent of prime age black high school dropouts worked full time in 1989. The differential effect for blacks reflects relative skill deficiencies, but, as research for Wilson's Urban Family Life Project has shown, it reflects employer racial discrimination as well.

The fact that industries employing relatively low-skill workers are facing increasing competition from low-wage economies suggests that the equilibrium wage of low-skill workers is declining and is, in fact, probably lower than the minimum wage. These downward pressures on wages will only continue or worsen as competition from Asian and Latin American low-wage economies increases; as technological change continues, so that educational attainment as conventionally measured no longer signals productivity; as industries are deregulated, undermining already weakened support for collective bargaining; and as the structure of the economy responds to such changes with increased demands for better educated, more specifically skilled workers.


This deterioration in the career-earnings prospects of the less skilled, even if it has slowed recently, has had a number of consequences. One of the most obvious is the impact on the distribution of family incomes. Lynn Karoly, writing in Uneven Tides: Rising Inequality in America, concludes that the number of lower class and upper class families increased in the 1980s, especially families with children and black and Hispanic families. In their recent book Growth with Equity, Martin Baily, Gary Burtless, and Robert Litan report that the adjusted (for family size) real incomes of families and unrelated individuals in the poorest one-fifth of the income distribution fell by 2 percent from 1979 to 1989, whereas it rose by 20 percent for families in the top quintile. Moreover, female earnings became a more important source of family income, especially among low-income families.

Thus it is increasingly difficult for low-income families, whether headed by a couple or by a woman, to earn their way out of poverty in the legitimate economy. Mothers who head families are triply disadvantaged by having primary--and, increasingly, long-term--responsibility for providing family income, parenting, and household maintenance. Obtaining affordable housing isn't getting any easier, either, and the possibility of moving to a better neighborhood grows more remote.

In short, the growing inequality of labor-market rewards suggests that the low-skilled are more likely to face career inequality and economic immobility. Calculations by Susan Smith and me based on data from the Survey of Income and Program Participation indicate that, with a high school education or less, mother-only households face better-than-even odds of being poor or near poor regardless of race or age. Black mother-only households face better-than-even odds of being poor or near-poor no matter what the age or education of the mother. For these households, prospects do rise somewhat with the age and educational attainment of the householder but hardly enough to give them better-than-even odds of escaping poverty. Similarly, Bailey, Burtless, and Litan concluded that "Families at the bottom of the income distribution are not only further away from the American mainstream in a given year; they remain further away for years."

These findings have important policy implications. Persistently poor women on AFDC need considerably higher skills to face appreciably better economic prospects. Both the budgetary allocations for the FSA-created JOBS program and the standard two-year planning period are too meager to support these skill improvements. Data from well-designed welfare-to-work demonstrations show convincingly, moreover, that for young mothers dependent on welfare, joining the paid labor force is an arduous process and is impossible without patient, forbearing support services. This is especially true if the goal is genuine upward mobility, not just apparently cost-effective but illusory short-term earnings gains.

Even when these women do find employment and get off welfare, their relative economic gains may be occurring in part at the expense of the economic prospects of low-skill men. When this happens, poverty has not changed in the aggregate but has simply experienced a sex change. It is from this shrinking earnings pool of relatively uneducated 25- to 34-year-old men, it must be remembered, that a successful child-support enforcement policy must draw. Focusing only on the earnings of the mothers misses this larger point and yields an irony: success is claimed when children's immediate caregivers are working for low wages even if biological fathers are increasingly unable to pay support. Welfare reform, moreover, cannot by itself overcome racial discrimination in hiring. For all but higher earners, being black puts you and keeps you very low on the economic ladder no matter what. Ending discrimination must be part of any strategy to improve economic mobility.

David Cutler and Lawrence Katz argue that, though "a buoyant macroeconomy" cannot eliminate poverty and arrest the decline in inequality, macroeconomic performance does matter: "The poor bear a disproportionate share of losses from a recession." Beyond that, they argue, "In an environment of persistent and severe shifts in relative labor demand against the less skilled . . . policies designed to improve the skills of the disadvantaged and a more generous safety net may be necessary to gain ground on poverty, even with a booming aggregate economy."

Baily, Burtless, and Litan are even bolder: "We recommend a fundamental reorientation of the current system for providing non-college educated workers with improved general occupational skills. We suggest a much more activist government policy to encourage private companies to invest in the job skills of workers who have not received a college education. This policy must be combined with a much greater public-private effort to define and certify necessary occupational skills, preferably within the framework of an expanded apprenticeship system. . . . The performance of the nation's high schools must be improved, too." This afterthought should be transformed into a well-developed policy strategy.


As Joel Handler and Yeheskel Hasenfeld observe in their recent book, The Moral Construction of Poverty: "Social welfare policy cannot be fully understood without recognizing that it is fundamentally a set of symbols that try to differentiate between the deserving and undeserving poor in order to uphold such dominant values as the work ethic and family, gender, race, and ethnic relations. In this sense welfare policy is targeted not only at the poor, but equally at the nonpoor, through the symbols it conveys about what behaviors are deemed virtuous or deviant." Resource commitments, they argue, are sufficient only to give credence to the symbols. They are not intended to "solve the problem" of poverty.

Some may dismiss such views as those of the ideological left. Recent analyses of widening income inequality and diminishing economic opportunity at the bottom are not so easily dismissed, however, because they are the product of mainstream research traditions that depend on empirical data. Yet this work has not dislodged welfare reform orthodoxy. The initial statement of Clinton's Working Group on Welfare Reform, Family Support and Independence, for example, asserted that, with the right incentives in place, "those who are healthy and able to work will be expected to move off welfare quickly." Why this intellectual inertia?

Concern for the normative behavior of welfare mothers has a policy history dating back to the Work Incentives Program in 1967 and the infamous Talmadge amendments of 1971, which required mothers of school-age children to register for work and training. But stigmatizing these moms was formerly the role of Southern conservatives. It was politically unthinkable for liberals to do so until the Reagan Democrats shifted the political center sharply to the right. As Reaganomics shoved the poor further under, it became fashionable across the political center to bemoan their behavior.

There are many reasons for the ceaseless and increasingly narrow focus on the normative behavior of women on welfare. Some policy intellectuals who are nominally liberal see no solution to non-work and dependency in economic growth or labor market policies and employment opportunities. Mickey Kaus, for example, as he writes in The End of Equality, has become convinced that AFDC really does promote self-defeating behavior and argues for unplugging the underclass culture's life support system and replacing it with a draconian program of mandatory make-work. Rebecca Blank, impressed with the inequality data, argues in a Northwestern University working paper that "we can't solve poverty through work and employment programs" and that, while such programs can make marginal improvements in people's lives, the best effort we can make is to prevent children from entering the unschooled and under-schooled underclass.

Even progressives like David Ellwood and Jencks, who are willing to redistribute heroic levels of resources to combat poverty, have endorsed part of the conservative critique of non-working mothers. Ellwood, Clinton's assistant secretary of Health and Human Services for planning and evaluation and co-director of the welfare reform working group, has focused on "making work pay" following a services-rich transition on welfare through an expanded Earned Income Tax Credit, a higher minimum wage, and modest investments in vocational skills. Jencks and Kathryn Edin ("The Real Welfare Problem," TAP, Spring 1990) concede that AFDC recipients cheat by taking off-the-books earnings and argue, with Ellwood, that the solution to this and other "pathologies" is to make work pay so that AFDC is not a long-term attraction.

To a significant extent, the current orthodoxy-cum-ideology is an artifact of favored research and evaluation methods. Basing inequality analyses on distributions of family income including publicly provided income support payments, for example, relegates labor income to being only one of many factors theoretically contributing to the outcome. Often inequality is a peripheral concern as attention is devoted to the behavioral variables that are the obsessions of human service interest groups and interdisciplinary groups of social scientists. Program interventions are typically evaluated by their cost-effectiveness in terms of the net present value of earnings gains, even though the underlying problem of dependency has been diagnosed as cultural and behavioral.

The nature of political sponsorship for policy analysis, and thus its essential character, has changed. The initial impetus for this kind of work came from political leaders who sought to overcome entrenched thinking and bureaucratic interests with bold, research-based ideas. Even Nixon was willing to entertain a negative income tax. But a decade dominated by problems of stagflation and deep recessions, followed by a decade of mounting budget deficits and political gridlock, put an end to the politics of ideas. Policy analysts now serve a highly constrained and expedient status quo. If problems have solutions requiring a challenge to entrenched interests and significant new resources, they will reach the decision agenda only in symbolic form. Policy analysts have become the technicians of political compromise. Foundations, with their risk-averse, interlocking elite boards and their predilection for conflict-free openness, success models, and immediate impact, unwittingly reinforce these essentially conservative tendencies to reify the status quo.

Thus many policy analysts have been coopted into the symbolic treatment of poverty by the sponsors and clients of their work. How else can we account for their widespread support for the Family Support Act, which many of the best and brightest conceded in private was deeply flawed? (Perhaps liberal welfare reformers are still atoning for being on the wrong side of the debate on Nixon's Family Assistance Plan.)

Ideology is also crucial in the welfare reform debate. Conservatives have successfully revived nineteenth century fears of the low morality and antisocial behavior of the poor among economically insecure voters of the working and middle classes. The respectable political center unites liberals such as Moynihan and Ellwood and conservatives such as Lawrence Mead and Douglas Besharov in a common cause: ending welfare as we know it.

For liberals, however, this alliance is a Faustian bargain. In exchange for a promise to join the nominal welfare reform coalition and support some transitional "carrots" such as EITC expansion, conservatives expect to set the budgetary and behavioral ground rules. They then pick and choose from among the elements of a balanced reform agenda those which resonate well with conservative voters and call the selection process "recognizing the political facts of life." Anxious to govern, liberals accept these "facts" as immutable, their role as creative intellectuals diminished while they accept assignment as technocrats and pore over census data. Thus Ellwood, whose Poor Support program is comprehensive and humane and emphasizes making work pay, has become known as the father of welfare time limits after the program's most conservative feature. And Moynihan, who has long recognized the disastrous consequences of a sluggish economy for male unemployment and the diminishing role of men in providing family income, is quoted instead on the disastrous consequences of "defining deviancy down," that is, accepting as normal those behaviors that are better seen as deviant. In the meantime, Mead and Besharov, who are philosophical opponents of livable income supports and "coddling" welfare recipients, get away with posing as gently humane behavior modifiers whose only goal is to help welfare mothers become fully functional and happy. Conservatives make the rules of the game and liberals play it.


Any effort at ending welfare as we know it must recognize two incontrovertible facts. First, a rising economic tide, should we ever experience one, does not automatically raise the boats of everybody and especially not of those whose skills, characteristics, and life histories put them out of the mainstream. Second, welfare is not a fancy yacht floating on a sea of worker earnings and welcoming all aboard to an idle cruise. It is a life preserver--literally.

These truths have important implications. Promising to transform AFDC into a transitional assistance system while restricting welfare outlays when low-skill opportunities and wages are collapsing is a hoax. AFDC mothers will not be going to work "quickly." Even if some do, others will be coming onto and staying on the rolls. It is time to abandon the notion that welfare reform, in the sense of remaking AFDC, is the key weapon in the fight against non-work and poverty.

To the extent that we are stuck with the residue of past welfare reforms, such as the FSA and JOBS, let's at least have four years of continuity in encouraging the states to make it work in humane and imaginative ways. Liberals should fight for the carrots and fend off the sticks, advocating welfare reform as a tool to "reinvent" welfare administration. They should experiment with all manner of ways to define and reimburse effective welfare-to-work transitions and evaluate their long-term as well as immediate consequences.

But a reassessment of public assistance as a safety net for poor families is also due. A careful reexamination of AFDC use suggests that it sustains three types of poor women: young, disadvantaged mothers with no skills; women who are temporarily poor and need relief; and older women who are virtually disabled and are poor candidates for work.

For the first, AFDC should become a family preservation and development program: "familyfare." That means increasing benefits and using support services to help young, disadvantaged mothers care for children and households as well as for themselves. Nearly three decades of "getting tough" with AFDC mothers has neither moved them into the labor market nor broken the cycle of poverty and dependence. For the second, AFDC should continue to be a temporary safety net providing adequate benefits and modest transitional assistance. For the third, AFDC should provide a transition to the Supplemental Security Income program and appropriate intensive or maintenance services. All of this will require resource commitments. Combined federal-state AFDC outlays are around $22 billion a year. Raise this to $30 billion to restore the real value of benefits and put real money into family support services.

For no one, however, would AFDC be a velvet chain gang of mandatory make-work. Programs to promote work and productivity should be gender neutral, non-punitive, and guided by work force, productivity, and labor market analysis. Remove JOBS administration from welfare departments, leaving them to administer cash and familyfare services. Make work and workers, men and women, the responsibility of labor departments.

In the meantime, a new national debate on earnings inequality, poverty, and the consequences of both must begin. Making work pay should continue to be a part of this debate, but research and reform must take new directions. For example, researchers should identify and account for trends in pre-transfer earnings distributions and their implications for family poverty; for the careers of different age, skill, and race-ethnic cohorts; and for the economic mobility of all classes. Reformers should focus on the quality of secondary schools; the role that community colleges play in the transition-to-work process; discriminatory hiring processes; and, in general, strategies for achieving socioeconomic mobility for those whose ordinary endowments are increasingly consigning them to stagnant futures.

The policies that will emerge from this refocusing on worker productivity and long-term economic opportunity will also require heroic resource commitments. Baily, Burtless, and Litan estimate the net new costs of an employer-based play-or-pay training program for non-college educated workers at more than $20 billion annually. Earnings insurance for displaced workers could, they estimate, cost $10 billion. Making work pay, too, is costly. In Poor Support, Ellwood estimates that it could take from $20 billion to $30 billion to "do everything right," including AFDC reform. But, he asked, isn't it worth less than 1 percent of GNP to enable the poor to make it without welfare?

The issue isn't whether we should spend heroic amounts on behalf of the poor. We'll spend such amounts, all right, but if we don't get our priorities straight, it will be for relief, cleanup, rescue, incarceration, treatment, punishment, remediation, rehabilitation, disability, lost productivity, and all the other consequences of economic failure.

The Clinton administration must use its bully pulpit to shift the premise and focus of welfare reform. The goal should be enlightened public understanding of the sources of long-term economic opportunity and the possibilities for reducing structural poverty in a global, high-skill economy and of the most enlightened ways to allocate resources to promote human welfare, not short-run legislative victories with AFDC, which are likely to do more harm than good. Skills, jobs, and choice leading to materially rewarding careers for those in a position to take advantage of them, and a humane, family-preserving welfare system for others, are the answers to persistent poverty and welfare dependence in America. It is time to ask the right questions.

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