Summary and Implications

On the whole, AFDC fares much worse than social security on the criteria used in this case study. One must bear in mind, however, that AFDC, confronts tasks that are inherently tougher than the providing of pensions for the elderly, a particularly favored task among social insurance programs.

Despite a poor fit with American notions of distributive justice, AFDC distributes resources that are important, if not essential, to the survival of a shifting recipient population that currently numbers about 11 million people a year, most of them children. The program's effects in reducing starvation, homelessness, and other forms of human misery are laudable, especially given its low cost.

Additional strengths include the noncompulsory nature of participation, minimal effects on economic efficiency, relatively high target efficiency, and—for better or worse—a considerable degree of regional and local discretion.

The list of AFDC's weaknesses is far longer. Because the distribution of benefits is not systematically related to either need or effort and does not require effort-based certifying activities from beneficiaries, the consequent public skepticism about AFDC beneficiaries' true neediness undermines the program's goal of enhancing human dignity. The financing of AFDC poses relatively few constraints on citizens' discretionary income, but the income transfers are highly vertical, and additional constraints are posed on the liberty of recipients and providers. The program's consequences for work, savings, and risk-taking, while uncertain and probably modest, do not look promising.

AFDC also receives low ratings on administrative efficiency. Its artificial insulation of program recipients from the labor market creates notable limits and harmonization problems. The program has not appealed to traditions and symbols respected in American political culture and has not aroused the interest of political elites on matters other than containing costs.

Finally, the program does not well serve the needs of either episodic or persistent users. In particular, efforts to promote greater self-sufficiency among AFDC recipients have foundered on three central issues: program features that create only weak work incentives, inadequate labor market opportunities for recipients, and the personal disadvantages and limitations of recipients.

The reforms initiated in 1962 focused on improving beneficiaries' capacities for using the labor market through job training and placement, related social services, and simple coercion. It is possible that this approach failed because we simply did not try hard or long enough, but the difficulties experienced along this path suggest that we try other avenues.

Nonetheless, today one sees a resurgence of support for the failed approach of the 1962 reforms. In Beyond Entitlement , Lawrence Mead, for example, thoughtfully and provocatively argues that the fundamental fault with the American welfare system is not its size but its permissiveness. Programs of public social provision, according to Mead, should require more rigorous effort at self-development and help among beneficiaries than AFDC or public assistance in general currently do. While I agree with this premise, there are two serious flaws in Mead's proposal that we develop intraprogram policing capacities for assuring that beneficiaries are working, studying hard, treating fellow family members reasonably, and avoiding crime.

The first flaw is the impracticality of such a proposal. For one, programs with administrative teeth are hard to develop. Although California's new Greater Avenues for Independence (GAIN) and Massachusetts's Employment and Training Choices (ET) have reputations as more constructive than workfare generally, both programs ultimately rest on the individual recipient's willingness to cooperate.^[47] Furthermore, intraprogram policing takes us back along a route we have already traversed and decided, through a series of court decisions, we did not like. And American political values are not likely to be well served by a set of larger, seriously more intrusive state bureaucracies that monitor public assistance.

The second general flaw in Mead's approach is the particular character of its optimism, which seems in part a reincarnation of the withering thesis. Mead does not imagine that all poverty will wither away through coercively imposed work, but he is optimistic that a good deal of it will. Yet to suppose that a considerable measure of poverty rests on personal actions alone is to ignore characteristics of the labor market that limit its universal usefulness in providing a living wage for many workers. Low wages and modest skills combine to keep the working poor hovering barely above poverty, and the slightest misfortune is apt to plunge them into destitution. Many households recover through their own efforts, but the pool of households likely to experience episodic poverty is so large and the persistence of their collective problems so great that eliminating or even dramatically reducing such poverty through work alone seems unlikely. The overall problem is less one of changing the attitudes of a small subculture, although this may be

a factor among persistent AFDC users, than of overcoming a variety of structural problems in the labor market that preclude adults from being able to support their families.

Moreover, Mead's optimism seems to ignore the effects of certain demographic trends, including the birth rates for single mothers and the divorce and desertion rates among couples with young children. To take but one example, for poor women the single most frequent escape route from poverty is marriage or remarriage.^[48] But marriage and remarriage rates are notably low among single urban black women who have children. One explanation of this trend holds that the limited economic opportunities of urban black men contribute to their reluctance to take on the obligations of a wife and children or stepchildren; black women, seeing little economic relief in such marriages, might be equally reluctant.^[49] Another explanation looks to sex ratios. In those urban areas where women greatly outnumber men, men—and not just American black males—tend to be less responsible toward women and children; in areas where sex ratios are more balanced, stable two-parent families predominate.^[50]

In contrast to Mead's vision, the AFDC reforms initiated in 1967 (and dismantled in 1981) represent a nascent example of an approach that incorporates a more adequate recognition of the limitations of the existing labor market. These reforms extended to a category of the poor a minimal level of economic support (a guarantee) that could be enhanced by work. Expanding upon this approach, the FAP and PBJI proposals offered both advantages and drawbacks in comparison to AFDC. They covered more people, thus reducing horizontal or support inequities. But they also brought a much larger population into prospective programs that offered their recipients economic support insulated from requirements of working. And the language of guarantees, as developed from WIN through PBJI, contradicted the core American concerns of work and self-sacrifice as essential to human dignity.

During the last quarter-century, then, public assistance programs have tried either to alter the capacities of people ill suited for the existing labor market or to insulate these people from the rigors of that market. In the renewed debate over workfare conservatives have tended to argue that in order to reduce the public assistance rolls we need to put people to work, and liberals have

tended to argue that we therefore need to create jobs that will allow people to work. We can, I believe, carve out a position between these views. Most Americans would agree that able-bodied working-aged adults ought to participate in the paid labor force, rather than be insulated from it. For single adults and childless couples, self-support through the labor market is a reasonable expectation. But for households with children, particularly single-parent households, regular full-time work at or near the minimum wage will not cover basic needs or cushion a household from poverty. And in single-parent households regular full-time employment is extremely difficult in the absence of adequate and affordable child-care. For these households, then, it seems appropriate and socially productive to establish a program of public social provision that would both facilitate labor market participation and supplement wages inadequate to support a family.

In chapter 8 I will propose such a program, one that will create a structure of opportunities and incentives far stronger than any that has characterized AFDC to date. Rather than enlarge existing public assistance bureaucracies for the policing of recipients, my measures would facilitate the socially responsible activities we want to encourage and, as necessary, supplement low-income workers' constructive efforts at self-support. But before I lay out my proposal, we need to examine the special problems associated with the delivery of social services. For this purpose, let us turn to a case study of Medicare.