The Dignity of Work — A UK Model for the US

There’s diamonds in the sidewalk, the gutters lined in song.
Dear, I hear that beer flows through the faucets all night long.
There’s treasure for the taking, for any hard working man,
Who’ll make his home in the American land.

Leave it to Bruce Springsteen to celebrate the value and dignity of work in one of his most patriotic songs, “American Land.” It’s not surprising that he is appreciated as one of America’s greatest musicians by people from all walks of life, from poor to rich and old to young.

One of the reasons his popularity has spanned decades is his ability to tap into the belief that “pulling yourself up by your bootstraps” is a quintessentially American attribute. Pursuing happiness is American in nature. And the ability to achieve the American dream through hard-earned work is also American in nature.

But what happens to this foundational belief when the “hard-working man” begins to disappear from the picture? What happens when the “treasure for the taking” is actually easier to acquire via government handout than through blood, sweat, and tears?

While millions – perhaps billions – have memorized lyrics to songs composed by The Boss, a non-American leader reminds us that our value of hard work is the only way to success. Iain Duncan Smith recently spoke about the United States’ problem with labor, welfare, and the culture of dependence and demonstrated how the trend toward dependency is preventing so many Americans from pursuing their dreams.

Smith is a British Member of Parliament whose civil service has included posts such as leader of the Conservative Party and founder and chairman of the Center for Social Justice (CSJ), “an independent think tank committed to tackling poverty and social breakdown.” Under a program he established at the CSJ, he defined the “five pathways to poverty” — educational failure, addiction, serious personal debt, worklessness and dependency, and family breakdown. He then went on to craft a plan to reduce them.

A coalition led by Smith came to power in the United Kingdom in 2010. At the time, the UK was suffering a similar problem as the United States — a decline in labor participation and a growing dependence on government largesse. Nearly 20 percent of UK households had no member in the workforce, and 1.4 million people (in a nation with 52 million individuals age 15 and over) had been on public assistance “for most of the previous decade.”

Smith and his allies implemented a series of reforms that built off the ideas proposed by the CSJ. Today, just seven years later, the United Kingdom enjoys its lowest unemployment rate since 1975, “the highest proportion of people in work since records began,” and historic lows of people unemployed and not seeking work. It’s labor participation rate stands at 75 percent.

Smith recently delivered remarks at the American Enterprise Institute to address the social reform that American leaders, like their British brethren, can implement to help reverse the unintended damage caused by welfare programs. These U.S. programs — now standing at 126 in total, 71 of which provide a cash or in-kind benefit — were created with the best of intentions. But they have ended up trapping people into indefinite dependency instead of providing a temporary safety net for people while they get back on their feet to earn their own success.

As Duncan explains, the “temporary” nature of welfare makes not just financial sense, but human sense.

Work is about more than just money.

Culturally and socially, work is the spine that runs through a stable society. Not only is it the best way to increase your earnings, but it provides purpose, responsibility, dignity. It offers role models for children, and it builds community spirit.

Conversely, an ever-growing body of research has shown that inactivity not only reduces your financial well-being, but is directly linked to poor mental health, substance abuse, and in the very worst cases, suicide. Fundamentally, as Benjamin Franklin once observed, ‘It is the working man who is the happy man … [and] the idle man who is the miserable man.’

According to Smith, the idle man is the kiss of death for society because “worklessness” hurts the individuals who should be earning their success alongside society at large. Smith quoted the Father of Economics, Adam Smith, saying:

No society can surely be flourishing and happy of which by far the greater part of the numbers are poor and miserable.

Sadly, the U.S. government has taught people “learned helplessness.” It has allowed people to become so permanently dependent upon it for money, food stamps, and other financial assistance that it makes more sense for these dependents to stop pursuing work at all. This mindset bleeds into new generations of dependence and, as a result, the vicious cycle continues.

Of course, Smith carves out exceptions for individuals who need assistance, citing sickness, disability, and “times of desperate hardship” as examples of when the state should step in to help carry them through their struggle. Even then, he argues, assistance should be less about sustenance and more focused on the journey of helping shift from dependence to independence.

It is both expensive and unconservative to manage and maintain those at the bottom rather than give them the opportunity to take back control of their lives.

For all the changes that must happen for the United States to implement the proper laws and procedures — and adopt the advantageous mindset that enables individuals to prosper through the blessing of work, Smith remains hopeful.

With a new administration, the United States has now a golden opportunity to give welfare the reform it so urgently needs.

There is the potential to create a welfare system that recognizes with compassion the situations people find themselves in, but ensures fairness for the taxpayer.

One that is more conditional, less chaotic, more dynamic.

But, above all, one that is about life change, enabling people to transform themselves and their families.

As Springsteen sings, “We Take Care of Our Own.” But the ability to pursue our happiness is easier when families are able to take care of themselves.

A Safety Net That Works: Enforcing Child Support Payments

What parent doesn’t want to help his or her child? Most people would wonder why the question even needs to be asked. But while child neglect and child poverty are issues that the social safety net and public assistance rightfully focus on addressing, legislative efforts to require delinquent or absent parents to take financial responsibility prove a handy tool for reducing the problem of childhood poverty.

Child Support Enforcement (CSE) was first passed into federal law in 1974. It was set up to make parents become financially responsible for their children. At the time, 75 percent of welfare caseloads involved an absent parent.

CSE became a part of the social services network in order to take pressure off government services and return the job of parenting to where it belonged — the parent.  Yet nonpayment of child support remains a huge problem today, even after the 1996 welfare reform law strongly enhanced enforcement mechanisms.

Child Support Enforcement is an issue that crosses partisan lines. Separation and divorce are an unfortunate circumstance of modern life, and child support delinquencies are not confined to one particular income level or political belief. At the same time, CSE was a major factor in reducing poverty among children after the 1996 welfare reform law was signed.

Believe it or not, one quarter of the welfare reform law of 1996 was dedicated to CSE. Its impact was notable. Child support agreements among poor parents increased by 8 percentage points from 1993-2003, meaning more children were assured that the parent not living with them helped pay for their upbringing. Enforcing child support payments resulted in a 74 percent increase in payment collections over 10 years.

So what happened? In the second decade since the law was passed, the percentage of custodial parents with a payment agreement dropped by nearly 14 points.

What accounts for the loss of momentum? Robert Doar, the former commissioner of New York City’s Health and Human Services, explains.

What accounts for this loss of momentum is a legitimate, although exaggerated, concern about being too tough on poor noncustodial parents, the parent who is not living with the child. A false wisdom has emerged in the policy community—from academics to the media—that the child support system forces noncustodial dads to, as the headline of a 2015 New York Times story put it, “Skip Child Support. Go to Jail. Lose Job. Repeat.” Some influential commentators even see the system as fundamentally unjust by imposing on poor men burdens that are viewed as the government’s responsibility. …

Certainly, some poor noncustodial parents are struggling and need help to live up to their obligations. But most noncustodial parents, poor and nonpoor alike, are capable of working and could contribute something—even a regular payment of $25 per month has value. Analysts who are critical of the program seem to forget that the parent raising the child full time is often poor too. In 2013, for poor custodial parents who received child support payments, the noncustodial parent’s payments represented 49 percent of their income. Allowing parents to completely walk away from their financial responsibility to their children should not be an option.

According to Doar, if the share of poor custodial parents with agreements had held steady at the percentage that it was in 2003 when the welfare reform law was still being closely enforced, then 500,000 more poor custodial parents would have had orders to receive support in 2013!

“Surely a substantial fraction of these parents would have received enough in payments for them and their children to be lifted above the poverty line,” he wrote in the introduction to a recent volume he edited on the topic.

What Reasons Are There For Parents to Refuse to Pay Child Support?

A lot of times, the parent responsible for child support payments is cut off from the child. Other times, resentment of one parent toward the other leads to a child being caught in the middle. Still other times, suspicion that the money is being misused by the custodial parent is made as an excuse by noncustodial parents to withhold payments.

But sometimes, the paying parent claims he just can’t afford it. And while that claim may have been doubted or disproven, it sadly is becoming a more frequent excuse due to an unfortunate shift in American culture and economy — notably the increasing struggle of men in the labor market. More from Doar:

Reliable data on noncustodial parents are hard to come by because the Census Bureau’s major surveys do not ask whether a man living alone is also a nonresident father. But a survey from 1997 conducted by the Urban Institute found that only 43 percent of noninstitutionalized, nonresident fathers who were poor worked at all—and this was during the late 1990s economic boom. Another study from the Urban Institute used administrative data from nine states in 2003 and 2004 and found that 25 percent of all obligors had no reported income. …

I suspect, given the evidence on young, low-skilled men generally, that these rates must look even worse today. In 2000, among African American men age 16–24 without a high school diploma and not in school, the employment rate was 40.8 percent, and for similarly positioned whites, it was 72.3 percent. By 2007 (like 2000, a year at the peak of the business cycle), the rates had fallen dramatically to 28.7 and 55.0 percent, respectively.

Seven million men age 25 to 54 are not working or even looking for work, according to recent data. Many of them have children despite having never married. These men are disproportionately less educated, and seen by woman as less “marriageable.” Yet marriage is a reliable indicator of higher paying jobs.

With the increasing struggle of men in the labor market, sympathy has shifted. But there is something of a chicken-and-egg argument to all this. Where once women claimed they didn’t need men to raise their children, they still demanded that fathers (a majority of noncustodial parents) help out. Did women tell men to get lost because they were dead weight? Or did men become deadbeats because their paternal role was rejected?

Data show that 70 percent of arrears are owed by noncustodial parents who have no documented income or very little earnings (less than $10,000 a year). And 25 percent of poor custodial parents with a support agreement aren’t receiving payments. So whatever the relationship between parents, the question is now whether it is even possible to get blood from a stone?

Much can be done to fix the mish-mash of regulations and changes that have occurred over the last 40 years. For instance, determining what is a proper measure of a noncustodial parent’s income would go a long way to changing the way male parents look at work. Why is this? Because evaluating a parent’s ability to pay support based on an over-the-table paycheck disincentivizes men from going to work.

The reforms to the program in 1996 focused on tracking down and holding accountable “deadbeat” dads, but it did little to acknowledge or address those who really are dead broke. This is a difficult balance to strike—I know from my experience working in New York that many fathers who appear to have few assets and no earnings are working off-the-books or involved in illicit activities, but they are reluctant to make that known because they either do not want to pay or do not want the government to know of their off-the-books activities.

Another issue is the requirement to declare the other parent’s ability to pay support before qualifying for assistance. The purpose of the requirement is to ensure custodial parents look to the other parent to contribute before going to the government for help. This is the case with Temporary Assistance for Needy Families (TANF), the cash welfare program.

But TANF is on the decline while Supplemental Nutrition Assistance Program (SNAP), Medicaid, child care, and housing assistance programs are on the rise. And guess what? Those programs don’t require opening a child support case as a condition of receiving aid.

But the issue, Doar explains once more, isn’t necessarily a matter of what you have to reveal, but whether the revelation leads to some kind of change.

Policy should not have to choose between helping single mothers or low-income men. CSE is a rare government program (outside the criminal justice system) that interacts often with disconnected, low-skilled men, but it does not do enough to help them. Order amounts should be responsive to the noncustodial parent’s ability to pay and his changing economic circumstances, and significant improvements have been made on this front. But a singular focus on reducing order amounts and forgiving arrears distracts from the main challenge these men face: not enough of them are working. Instead of reducing what we expect of these men, we should help them better meet their obligations to their families and society.

Lastly, Doar notes that if federal or state assistance is dependent on parents working, then expand the programs that incentivize work.

While momentum has been building in Washington for an expansion of the earned income tax credit (EITC) for all childless adults, this policy is not well-targeted. A better solution is to expand the EITC for noncustodial parents who work and pay current child support. As commissioner in New York State, I created and implemented such a program, and an Urban Institute analysis found that it increased the share of parents who paid their support in full.

Why Is the Child Support Enforcement Program Important?

Historically, CSE has worked. Even as late as 2015, CSE resulted in $5.26 in payments for ever dollar spent on enforcement. Doar explains that enforcement works for several reasons:

  1. The program sends a clear message to all potential parents: if you play a role in bringing a child into the world, you have a responsibility to help support him or her.
  2. Strong child support enforcement not only communicates that essential American value, it changes the incentives around fathering children outside of marriage by making it impossible to abandon the responsibilities of parenthood.
  3. When child support obligations force an absent parent to be reminded of his financial responsibilities, he is also more likely to take up his other parental duties and be more involved in the child’s life. Unsurprisingly then, receiving child support is also linked to better outcomes for the children involved.
  4. Studies have found that formal child support payments are associated with fewer behavioral problems, better academic performance, and increased self-esteem.
  5. While it may seem counterintuitive, the CSE program offers one of policy’s best opportunities to address the crisis of prime-age male nonwork in America.

CSE is a needed and effective program. It currently lifts more than one million families above the government’s official poverty line, reduces single parenthood, and improves child outcomes, all by enforcing and facilitating personal responsibility at very low cost to taxpayers.

Michael Novak’s Legacy: Welfare to Work Is Social Justice

“America’s system of democratic capitalism represents a fusion of our political, economic, and moral-cultural systems. No facet can exist apart from the others.”

This was the central thesis in the book “The Spirit of Democratic Capitalism,” written by Michael Novak and published in 1982. It’s not the only book he wrote on the subject.

Novak died Friday at age 83 and he is remembered as a titan of intellectual thought. He is the progenitor of the 1996 Welfare Reform Law, which originated from conclusions laid out in the 1987 proposal for A New Consensus on Family and Welfare that Novak presented to President Ronald Reagan. It was the first major policy statement to suggest a work requirement in exchange for welfare aid.

That policy took shape among 35 other books that Novak wrote during his life.  Social justice was the general theme in his life’s work, and it is an outlook that helps guide new policy, like Wisconsin Gov. Scott Walker‘s latest attempt to encourage a work requirement in exchange for government assistance. Opponents of the idea try to cast it as cruel, but from Novak’s point of view, work is dignity, and the state’s support of the individual without any incentive to engage with larger society is the truly socially unjust act.

As Flavio Felice described it in a 2016 essay, Novak’s notion of social justice meant everyone is a contributor to the greater good, if only for the benefit of one’s personal growth.

According to Novak, “social justice” rather expresses the decisive rejection of individualistic sentiment, on the basis of a social anthropology in which the main actor is the “person,” which he understands as “individual and community”—the ontological, epistemological, and moral center of social action. In this way, in free societies, citizens are inclined to use their own tendencies to associate, to exercise new responsibilities, and to move towards social ends. In this sense, “social justice” is the particular form taken today of the ancient virtus of justice. Therefore, it does not necessarily involve the strengthening of the presence of the State, but rather, the development of civil society, in keeping with Hayek. In the words of Luigi Sturzo, a beloved author of the same Novak: “Nothing therefore exists of human activity, which, though originally individual has no associated value; nothing among men can come into being, which does not mention any form of association.”

Similarly, the most dangerous enemies of “social justice” appear the same as denounced by Sturzo on his return to Italy from his twenty years in  exile (1924-1946), which he identified as the “evil beasts of democracy:” “statism, particracy, waste of public money.” In practice, for “statism” we mean the false belief that, by entrusting to “the State activities for productive purposes, connected to a restrictionism that stifles the freedom of private initiative,” we can “make amends for inequalities” (Sturzo). Such a degeneration in the task of the State, which denies freedom, favors “particracy”, that is, the irresponsible interference of political parties and trade unions in legislative functions, which negates equality. A corollary of the first two “evil beasts” is the “waste of public money” which would violate justice.

That’s a heavy dose of philosophy, but as Felice summarized, “The work of Novak and (cowriter Paul) Adams puts us on guard against easy shortcuts, which are so often accompanied by rhetorical proclamations and authoritarian pretensions unsuited to a society of free men.”

Novak was a counselor of popes and politicians whose gentle and warm personality made him a beloved figure to many. His legacy lives on in good social policy.

The Poverty Debate: Why We Don’t Agree on The Same Set of Facts

The political realm is a great place to toil if you aspire to be an armchair pugilist. Without much personally at stake in the outcome of  the poverty debate, it is easy to pick a side and argue statistics and facts. But in the midst of all the fighting are real people being impacted by decisions outside of their control.

Such is the case when it comes to arguments between the political scientists of the left and right over welfare reform, and whether those at the bottom rungs are any better off despite numbers showing that millions of people were clearly lifted out of poverty as a result of the 1996 welfare reform law.

To this day, commentators on the left employ bogeyman language for the anti-poverty law — demonizing Newt Gingrich and House Republicans for coming up with legislation that Bill Clinton signed — while at the same time acknowledging that the percentage of people in poverty is demonstrably less than reflected in the antiquated methodology used to determine current poverty levels.

Take the words of Will Marshall, president of the Progressive Policy Institute:

The official poverty rate is just above 15 percent, about a point larger than it was in 1996. But that measure is misleading, because it doesn’t take into account non-cash benefits and tax subsidies. According to Harvard University’s Christopher Jencks, the absolute poverty rate falls to under 5 percent when adjusted for food and housing, the earned income and children’s tax credit, and a more accurate measure of inflation.

Nonetheless, Jencks and other social policy researchers are concerned about the rise of “deep poverty” — an increase in the percentage of families whose income is less than 50 percent of the official poverty line.

Some liberal analysts blame welfare reform for gouging a huge hole in the social safety net. Even as unemployment soared during the Great Recession, they note, TANF caseloads stayed down. That meant fewer needy families were getting cash assistance when they needed it most.

That’s true, but it’s not the whole story. As cash assistance has shrunk, other forms of social support have grown and become more generous. These include unemployment insurance, food stamps (now called the Supplemental Nutrition Assistance Program, or SNAP) and disability programs. In fact, some conservatives complain that welfare reform hasn’t made poor single-parent families less dependent on government; it just transferred their dependence to other programs that lack TANF’s strong work requirements.

Marshall notes that welfare reform, courtesy of President Clinton or otherwise, helped reduce the number of people in poverty. The big problem now is the number of women with children who live in “deep poverty,” which is defined as people living on less than half the official poverty rate. Professors Kathryn J. Edin and H. Luke Shaefer recently wrote a book in which they demonstrate that “deep poverty” rose by 2.6 percentage points between 1996 and 2011, from 1.7 to 4.3 percent.

At the same time, however, the Manhattan Institute has released a study contradicting the numbers, while saying something similar to Marshall from a completely opposite perspective.

Practically no children of single mothers were living on $2 a day in either 1996 or 2012 (the latest year for which we have reliable statistics), once the receipt of all government benefits are factored in. In 2012, fewer than one in 1,500 children of single mothers were living in what is called “extreme poverty.” This finding is consistent with other research.

Herein lies the challenge. If both sides agree that “official poverty statistics can create a misleading impression that hardship has increased,” then both sides must get out from beyond their political lens to evaluate not whether welfare reform has been a net positive — it has — but what’s the next step.

Progress is being made. More needs to be done. But the debate must start from the perspective of not what should be done, but whether we can eradicate poverty or whether it will always exist to some extent.

Then it’s a matter of determining how much help is enough to ensure that the least among of us has the means to live in safety and with dignity. This is where agreement is elusive and where next measures stall. Determining what those in deep poverty need, want, and are capable of contributing could go a long way to getting past arguments over whether six in one is equal to a half dozen in the other.