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TODAY'S LEADERS LOOK TO TOMORROW ECONOMICS DAVID T. ELLWOOD HELP THE POOR, BUT NOT WITH WELFARE
(FORTUNE Magazine) – For a long time we were mired in debates over welfare. In the last couple of years we've moved toward trying to help people help themselves. It's a turning away from welfare, but not a turning away from helping the poor. The directions we should head in are clear. It is outrageous that the poorest families in America are those with a full-time worker who qualifies % for almost no public support. The working poor are playing by the rules and losing the game. There are many ways to make work pay. The most attractive is an earned income tax credit for the working poor. More controversial policies would include raising the minimum wage further. We also need to make sure everybody has medical protection outside of the welfare system. Every other major industrialized country has found a way to do this. In the next ten years we will do the same. The U.S. has not yet dealt seriously with the problem of single parents. They either work all the time or they're going to be on welfare. Unless you can get a job that pays two or three times the minimum wage, health benefits, and so forth, welfare is better. The obvious way to start helping is to collect from absent parents. Only one in three single parents receives court- ordered child support. There's $20 billion to $30 billion more that could be collected. We ought to move toward a uniform national system of child support, with payments collected automatically by the government from the employer. Recent legislative changes are moving us rapidly in that direction. Beyond that we need to do much more in finding ways to give people responsibility and resources to be self-supporting -- everything from self-help strategies to better schools. The goal is to give people control over their lives. We have the political will to address these issues. We came very close in the last session of Congress to passing measures that would provide day care, and an earned income tax credit. We raised the minimum wage somewhat, and we extended medical protection. It's a matter of simple fairness: People who play by the rules shouldn't lose the game. |
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