Work and Welfare: 18 - Rilegato

Solow, Robert M.; Gutmann, Amy

Rilegato

ISBN 10: 0691058830 ISBN 13: 9780691058832

Casa editrice: Princeton Univ Dept of Art &, 1998

Riassunto

The Nobel Prize-winning economist Robert Solow directs his attention here to one of today's most controversial social issues: how to get people off welfare and into jobs. With characteristic eloquence, wit, and rigor, Solow condemns the welfare reforms recently passed by Congress and President Clinton for confronting welfare recipients with an unworkable choice--finding work in the current labor market or losing benefits. He argues that the only practical and fair way to move recipients to work is, in contrast, through an ambitious plan to guarantee that every able-bodied citizen has access to a job.


Solow contends that the demand implicit in the 1996 Welfare Reform Act for welfare recipients to find work in the existing labor market has two crucial flaws. First, the labor market would not easily make room for a huge influx of unskilled, inexperienced workers. Second, the normal market adjustment to that influx would drive down earnings for those already in low-wage jobs. Solow concludes that it is legitimate to want welfare recipients to work, but not to want them to live at a miserable standard or to benefit at the expense of the working poor, especially since children are often the first to suffer. Instead, he writes, we should create new demand for unskilled labor through public-service employment and incentives to the private sector--in effect, fair "workfare." Solow presents widely ignored evidence that recipients themselves would welcome the chance to work. But he also points out that practical, morally defensible workfare would be extremely expensive--a problem that politicians who support the idea blithely fail to admit. Throughout, Solow places debate over welfare reform in the context of a struggle to balance competing social values, in particular self-reliance and altruism.


The book originated in Solow's 1997 Tanner Lectures on Human Values at Princeton University. It includes reactions from the distinguished scholars Gertrude Himmelfarb, Anthony Lewis, Glenn Loury, and John Roemer, who expand on and take issue with Solow's arguments. Work and Welfare is a powerful contribution to debate about welfare reform and a penetrating look at the values that shape its course.

Su questo libro

Informazioni sull?autore

Robert M. Solow is Institute Professor of Economics, Emeritus, at the Massachusetts Institute of Technology. He won the Nobel Prize for economics in 1987. He is the author of numerous books and articles, mostly about the sources of economic growth, the nature of the labor market, and other topics in macroeconomics.

Dalla quarta di copertina

"This book should be read by anyone interested in the philosophical underpinnings of welfare and the likely consequences of welfare as we shall come to know it. Solow presents a grim but accurate picture of the meager job prospects of most welfare recipients. It is a very readable book based on hard evidence."--Alan Krueger, Princeton University

Estratto. © Ristampato con autorizzazione. Tutti i diritti riservati.

Work and Welfare

By Robert M. Solow

PRINCETON UNIVERSITY PRESS

Copyright © 1998 Princeton University Press
All right reserved.
ISBN: 978-0-691-05883-2

Contents

Introduction Amy Gutmann....................................................viiPreface to the Lectures Robert M. Solow.....................................xviiLecture I: Guess Who Likes Workfare Robert M. Solow.........................3Lecture II: Guess Who Pays for Workfare Robert M. Solow.....................23Comment Glenn C. Loury......................................................45Comment Anthony Lewis.......................................................55Comment John E. Roemer......................................................63Comment Gertrude Himmelfarb.................................................77Response to Comments Robert M. Solow........................................85CONTRIBUTORS.................................................................95INDEX........................................................................97

Chapter One

LECTURE I

Guess Who Likes Workfare

ROBERT M. SOLOW

* * *

I am sure that some of you are bemused by the almost oxymoronic character of the occasion. No doubt you recall Edmund Burke's gloomy thought that "the age of chivalry is gone, that of sophisters, economists and calculators has succeeded; and the glory of Europe is extinguished forever." You feel, wearily, that you know what he meant; it's that bad. A lecture—no, two lectures—on "human values" by an economist: one might as well invite a turkey buzzard to lecture on table manners. How would the poor beast know where to start?

I have to admit that many of my professional brothers and sisters do exhibit what Veblen would have called a trained incapacity to deal with human values in an unembarrassed way. But a concern for human values cannot do without economics. J. M. Keynes remarked that economists are not the guardians of civilization, but they are the guardians of the possibility of civilization. His Cambridge contemporary, Dennis Robertson, once gave a lecture entitled "What Do Economists Economize?" His answer was: love. He had in mind that altruism is scarce; there is never enough to go around. The function of economics is to devise social institutions that make it possible to economize on altruism and still live tolerably. Competitive markets, when they function well, are such an institution, with the remarkable capacity to transform individual actions motivated by simple greed into "efficient" and thus in some ways socially desirable outcomes. Then the limited supply of altruism can be saved up for those occasions when markets do not work well, or for those others when markets do their job but still leave us with outcomes that 51 percent of us—61 percent in the U.S. Senate—would like to improve, even at some personal cost to ourselves.

Robertson did not say, perhaps because he was not a middle-classAmerican, that even if there is some left-over altruism available, its use may be unhealthy. In a society that places a high value on self-reliance, being the regular beneficiary of altruism may be dangerous to one's moral health. It can lead to unresisted dependency. That is no doubt one of the reasons why it is said to be better to give than to receive. (There is some moral danger in the other side of altruism too. Noblesse oblige is not always an attractive attitude in a seriously plebeian society.)

The general topic of these lectures—welfare and work—falls naturally into this category of questions. Unadulterated market outcomes leave some fraction of citizens, often including numbers of children, deeply impoverished; the question is what to do about that collectively, if indeed anything should be done. For some purposes it is important to know whether extreme poverty arises from a failure of the market mechanism or whether the system is working well but with unpromising raw materials. In one case the best long-run course might be to fix the market mechanism; in the other, the choice is between altruism and nothing. A lot of economics is about that large question, but I will enter on it only when it is directly relevant to the particular issues I want to discuss.

My aim in these two lectures is to locate the workwelfare alternative at the intersection of two social norms or virtues or "human values": self-reliance and altruism. My main point today is going to be that the total or partial replacement of unearned welfare benefits by earned wages is the right solution to the problem of accommodating those virtues in the kind of economy that we have. Welfare recipients will feel better because they are exhibiting self-reliance. Taxpayers will feel better not merely because less is demanded of their limited altruism but also because they can see that their altruism is not being exploited. The statement about taxpayers hardly needs arguing, so I shall take it for granted. But I shall spend a lot of time today making the statement about welfare recipients plausible by describing the words and the behavior of welfare recipients themselves.

Tomorrow I want to argue that carrying out the transformation of welfare into work will be much harder and more costly (in the budgetary sense) than anyone who sees its virtues has yet admitted. The standard discussion rests on the tacit belief that all the problems lie on the supply side of the labor market; kennel dogs need merely act like bird dogs, and birds will come. But that is a Panglossian error. The number of jobs is not a constant, but neither is it likely to respond one-for-one to the number of offers to work. To the extent that it responds at all, it will be as a result of forcing already low wages even lower; and that is precisely why the social norm of altruism leads to the creation of welfare benefits in the first place. A contradiction or paradox seems to arise. There is a possible reconciliation, but it is not what current legislation envisions. So today my subject is welfare; tomorrow it will be work.

The United States has, like other rich countries, a complicated patchwork of devices for transferring tax revenues to poor people. The part of the system that is most often discussed pays cash benefits—welfare checks—mostly to single mothers and their children. There are other parts of the system—food stamps, Medicaid, housing allowances, and so on—but I will speak in a loose way only of welfare benefits, because I am interested only in one or two issues of principle, and not in the details. Everyone is aware that reform of the welfare system has been and may again be a hot, partisan, political issue. The recently passed legislation was bitterly fought over, and neither logic nor fact-based analysis featured strongly in the debate. No one can say with confidence what will happen in practice. The outcome matters intensely to the people involved. When you get very close to the limits of subsistence, little differences bulk large. Nevertheless, these lectures are not intended as a comment on current legislation. The small number of arguments I want to pursue should be equally significant whether you were born a little liberal or else a little conservative, or so I hope.

The particular form now taken by efforts to reform the welfare system is to eliminate as far as possible the passive receipt of transfer payments and replace it by a requirement to work, either as a condition for receiving benefits or as a total substitute for receiving benefits. There is also a movement to put limits to the length of time for which anyone can receive benefits, in contrast to the current rules that make eligibility—entitlement—simply a matter of meeting certain conditions. These proposals are actually more complicated in practice than they are made to sound in political rhetoric. In any case, they are not what I want to discuss; when I speak casually of "welfare reform" I will mean the intention to transform welfare into work.

If it could be taken for granted that welfare reform in that sense would be accomplished in ways that are neither punitive nor degrading, then it seems to me that the routine substitution of work for welfare would be clearly desirable, indeed a necessary step toward whatAvishai Margalit has recently characterized as "a decent society." The reason is straightforward, and it has to do with human values. "In our culture" a large share of one's self-respect derives from one's ability to make a living. It is never an insult, not even a sly one, to describe someone as "a good provider" or "a hard worker" or even as a reliable "meal ticket."

One could go further and appeal to less casual sorts of evidence. It is a standard finding from survey research that much of an American's felt identity derives from his or her job. Occupational level is perhaps the most important single index of status, as perceived by oneself and by others. The occupational category "welfare recipient" is definitely not high on the list of designations that make a person feel good about herself. This is an important enough point that I will take time to document it directly.

I will start a little distance from home, and then come closer. The Canadian government is currently conducting an experiment it calls the Self-Sufficiency Project in two provinces, relatively prosperous British Columbia and relatively poor New Brunswick. The treatment being tested is not a compulsory substitution of work for welfare; it is an attempt to make work more viable for single parents. Those who choose to enroll in the program have one year in which to find a job or a couple of jobs that add up to thirty or more hours of employment per week. When they do, and for as long as they do for the next three years, they receive a supplementary payment that roughly doubles their earnings. The supplement is larger the lower the wage. It is on a very generous scale as these benefits go.

The short-run intention is to make market employment a more desirable option for welfare recipients with very low earning power, for some of whom unsupplemented work might mean an absolute reduction of income below what is provided by welfare. The long-run hope, of course, is that when the three-year time limit is up, many of the beneficiaries will have increased both their earning power and their attachment to work enough to keep them in the job market and off the welfare rolls. The Self-Sufficiency Project is a carefully planned, statistically sound, experiment. Eventually we will have a pretty good idea of its effectiveness and its cost. But that will not be for several years, and it is not what I want to report now.

What I do want to report is some conclusions from interviews with Canadian welfare recipients conducted by the research team that is following the project. The unavoidable impression is that most of the women find their current position shameful, degrading, embarrassing. They are aware of being looked down on. They report trying to hide from other people in the bank the fact that the check they are cashing is a welfare check. The verbatim reports contain passages like this: "People call you `welfare scum.' They look at you—all you ladies here in this room know—they look at you as if 'Hey, you're dirt,' right? And it's a very horrible feeling." Or this one: "You go out to any social event and people ask you what you do for a living ... so you say under your breath ... [mumble]. A lot of people think of you as being either lazy, or you don't care, or you're not educated enough." There is no doubt that most welfare recipients feel like losers.

On the subject of work, the researchers report as follows. "First and foremost, work was seen as the route to feeling better about oneself and having more control over events in one's life." The women say things like: "You get up in the morning and you know what you're going to do ... you're confident." "You feel useful." "You don't have your hand out." "Even though it's peanuts ... at least it's mine." "You get more respect from others." Then why do they remain on welfare? (It is called Income Assistance in Canada.) Some, of course, are disabled, some are going to school, and some have made a conscious decision to stay home with preschool children. But they speak frequently of growing lazy, of having "a feeling of dependency that grows and grows." One of them said: "In the first few months of being on Income Assistance, you still have that incentive: `I don't want to be doing this; I'd rather go out and get a job.' But when the job doesn't come, self-esteem gets lower. Then you realize, `Oh, even if I do get a job, it's easier doing this.' And it does, it grows with time. You realize that you're pretty stuck."

There are no surprises here, unless you are one of those who think that all or most welfare recipients are happy-go-lucky exploiters of the system, or one of those others who think that the notion of dependency is the pure invention of unsympathetic right-wingers. The unshocking temporary conclusion I want to take from this recital is that a well-constructed substitution of work for welfare, provided it is applied humanely to those who are disabled or personally troubled, and provided it pays careful attention to the needs of children and the self-respect of adults, would be felt to be a step in the right direction by almost everyone, including those who would find their welfare benefits replaced by a requirement to work.

I chose to begin with the Canadian example partly to create a little distance, but more to elicit the reflex reaction: Ah yes, but those are Canadians (meaning "white people down on their luck"), and therefore not relevant to our problem. Indeed the Canadian sample has few if any blacks; the ethnic mixture contains about 10 percent "First Nations" and 5 percent Asian ancestry, more of both in British Columbia than in New Brunswick. Now comes the real point: there is exactly similar evidence from the United States. Beginning as long ago as 1983, states have been experimenting with work requirements for welfare recipients. In 1986, the Manpower Demonstration Research Corporation in New York interviewed a casual sample of participants in seven different states. Each of the states was operating a program of its own design, not all alike, but with a family resemblance to each other and to what would emerge from any current welfare reform. Unlike the Canadian experiment, these involved a mandatory work requirement, with sanctions for noncompliance. The states were New York, Arkansas, Virginia, California, Illinois, Maryland, and West Virginia, some high-benefit states, some skimpy. The interview sample was almost entirely female, predominantly Black and Hispanic (except for West Virginia and, to a lesser degree, Arkansas).

There is a lot to be said about the job-readiness of the participants, and other such characteristics. Here I want to report some attitudes, which seem to have been carefully elicited. Across the seven states, 70 percent of those interviewed said that they were satisfied (either "strongly" or "somewhat" satisfied) about receiving benefits that are tied to a job, as compared with just receiving benefits. With some variation from state to state, again roughly 70 to 75 percent said that they felt better about getting welfare checks now that they were working for them.

More than 90 percent reported that they liked their jobs (most of which were subclerical or janitorial), and the same fraction looked forward to coming to work (to those jobs). Interestingly, fewer than a third thought that they had learned anything on this job. As a last touch, when asked whether they thought that they or the employing agency was getting the better of the deal, three-quarters thought the employer was paying less than full value, 15 percent thought they were getting more than they were worth, and the remaining tenth thought it was a wash. So welfare recipients required to work feel more or less like the rest of us. The colonel's lady and Rosie O'Grady ...

Another collection of cross-state interviews was collected in connection with the Job Opportunities and Basic Skills or JOBS program established under the Family Support Act of 1988. (The field of welfare reform is Acronym City; I am waiting for the first attempt to solve the unemployment and health-care problems simultaneously by a new System for Turning Unemployed People Into Doctors.) The difference is that this time single mothers were asked to make explicit comparisons of work and welfare and the choice between them. The source of the general preference for working was confirmed. "I am determined to get off welfare. They treat you as less than human. Nothing is personal. I am tired of having to be accountable to welfare for everything that I do." Or: "To be self-supporting, independent, the personal satisfaction, working will be better."

(Continues...)

Excerpted from Work and Welfareby Robert M. Solow Copyright © 1998 by Princeton University Press. Excerpted by permission of PRINCETON UNIVERSITY PRESS. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Dettagli dell'edizione

• Editore: Princeton Univ Dept of Art &
• Data di pubblicazione: 1998
• Lingua: Inglese
• ISBN 10: 0691058830
• ISBN 13: 9780691058832
• Rilegatura: Copertina rigida
• Numero di pagine: 100
• Contatto del produttore: non disponibile
• Persona responsabile: non disponibile