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Gaining Ground: Tailoring Social Programs to American Values

University of California Press

Craig was five when his father died in an automobile accident. Since the accident involved only his father's car, which skidded on an icy patch of roadway, there were no suits for damages. At the time of the accident Craig's parents had little in the way of savings or other assets, and the father's life insurance coverage was quite modest. Craig's father was in his mid-twenties and had been a high school teacher for several years. Craig's mother had never worked, apart from summer jobs in high school and between her two years of college. Grandparents from both sides of the family offered assistance of various kinds: emotional support, food, child-care, and money.

As survivors of a member of the labor force, Craig and his mother might each expect to receive social security benefits from Old Age, Survivors, and Disability Insurance (OASDI). The amount of these monthly support checks would depend on the father's earnings history. Under current rules Craig would receive benefits until he finished high school. The same benefits would be accorded to Craig had his father been permanently and totally disabled rather than killed in the accident, or had Craig's parents divorced prior to the accident so long as Craig had not been formally adopted by a stepfather.

But under slightly different circumstances, social security would not protect Craig. For example, suppose Craig's father had not yet

worked long enough to earn social security survivor's eligibility for his family. Or suppose that Craig's father had contracted an illness that forced him to stay home from work for several months. No general public program provides protection against this contingency. (State workers' compensation programs cover only job-related illnesses and injuries.) Rather, Craig's fate would depend on whether his father's employer provided for paid sick leave and private group medical insurance. Or suppose the crisis was that Craig's father had been indefinitely laid off from work. The family would then have to rely on state unemployment compensation, which provides benefits of limited duration.

As a final example of the inadequacies of current programs, consider Darlene, a two-year-old whose father deserted Darlene's mother during pregnancy. Darlene's mother, like Craig's mother, is young and has no experience or work skills that would command good wages in the labor market. Further, Darlene's extended family cannot afford to offer assistance other than intermittent child-care. With no savings and no family support to fall back on, Darlene and her mother will qualify for public assistance from Aid to Families with Dependent Children (AFDC), more commonly known as "welfare." Like workers' compensation and unemployment insurance, AFDC benefits follow general federal guidelines but vary markedly from one state to another and even within states. Generally, eligibility for AFDC provides access to Medicaid benefits, food stamps, and limited public housing assistance.

AFDC benefits provide crucial support, but the recipients pay a price, for welfare, unlike social security, is not considered an earned right but a form of public charity. Because eligibility for welfare is not based on prior contributions but on need, many Americans—including many welfare recipients—view being on welfare as a sign of disgrace, a mark of failure in a land of opportunity, an affront to personal dignity. And surviving on the largesse of public charity rather than on one's personal accomplishments sets recipients apart from the members of—and thus membership in—mainstream society.

Let us suppose that Darlene's mother is determined to be off welfare and to be self-supporting as soon as possible. Once she finds a job, the AFDC benefits will begin to disappear. The specific income levels at which benefits are withdrawn vary from state to state, but the following pattern is typical. For several months the

first few dollars of earnings that Darlene's mother makes each week do not affect AFDC benefits. Thereafter, an allowance is made for work-related expenses—child-care, for example—but above that allowance each three dollars of earnings reduces benefits by two dollars. After four months nearly all earnings above limited work-related expenses reduce benefits dollar for dollar, and earnings above modest cutoff points lead to the cessation of AFDC and Medicaid benefits. If earnings subsequently drop below the cutoff points, benefits are not reinstated until the family again reaches a designated level of destitution. If Darlene's mother is typical of many AFDC recipients, she will manage to obtain independence from welfare, perhaps more than once.1

I could add variations to these predicaments, but two points should already be clear. First, Craig and Darlene's needs for food, clothing, housing, child-care, and medical care remain about the same regardless of the scenario we pick. While a few children have exceptional medical-care or dietary needs, generally what varies from one scenario to another is not the child's needs but the availability of public and private resources to meet those needs. Second, no matter which scenario we pick, we cannot reasonably blame Craig or Darlene for ending up in a situation that may or may not provide resources to meet their basic needs. All these disruptive incidents—death, illness, layoffs, desertion—are well beyond the children's control.

While these points are clearest in a discussion of the plight of young children, they apply to all citizens of advanced industrial societies. Because we no longer live in an era of economically self-sufficient homesteaders, individuals' needs for public policy protection from certain social hazards are greater than they were a century ago. We can no longer look to the model of the society that prompted the liberal tradition—the society that grew out of Locke and Adam Smith's ideas. The gradual transformation of America into an advanced industrial society has left us more, not less, vulnerable to social hazards.

Wage Dependency and Vulnerability

Through the first half of the nineteenth century America was a nation of farmers, shopkeepers, and small businessmen living in small towns.2 Capitalism was local and commercial, rather than national

and industrial, and the family was a self-sustaining economic unit. Family members worked largely within the confines of the household, on the family's land, or in the family's shop or other small business. Gradually, however, technological development and increases in economic centralization and differentiation combined to erode households' self-sufficiency. More people began to work outside the family for wages or salary. And as needs came to be more commonly supported by participation in the labor market, fewer families held their own land or other businesses. Today, only a small fraction of Americans owns household-sustaining property. The vast majority of us, including many professional and managerial people, are dependent for our livelihoods on selling our labor in the market.

Wage dependency creates the preconditions for wage vulnerability. Any disruption in wages threatens a worker's ability to...