Insufficient funds: when hard work doesn't pay

Christian Century, June 14, 2003 by Marcia Z. Nelson

ARE THE POOR blessed or lazy? The prevailing answer in America is lazy. The welfare revolution of the past decade put the poor to work. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 changed the social support system. As the name of the law implies, people are held personally responsible for getting out of poverty by taking advantage of work opportunities.

This work-based welfare system is now undergoing another round of scrutiny because the legislation needs renewal (see sidebar, p. 22). President Bush is asking the poor to work more, invoking once again the goal of moving people from "welfare dependency to self-sufficiency."

Work is a gospel that we live by, seemingly more than ever. Sociologists tell us that the number of hours worked by American families have increased and that Americans work more hours than workers in other nations. The work ethic is a deeply held social value with biblical roots. It's the gasoline of the American dream of getting ahead, the sweat-equity portion of home ownership. The poor themselves accept the gospel of work. In an essay in Welfare in America: Christian Perspectives on a Policy in Crisis (1996), political scientist Lawrence Mead writes:

   In dependency politics, values per se are not at issue,
   only the realization of values. No one disputes that the
   work ethic and obedience to the law are good things.
   There is no evidence that the poor themselves question
   these values.

Yet the value of work ought to invite questions if the work itself proves not to be much valued. Those leaving welfare for work are earning between $6 and $8 an hour at the bottom of the economic ladder. For them, and other low-income working Americans, work and poverty coexist. Work does not lead to self-sufficiency.

Statistics on work and poverty paint the picture by numbers. In 2001, 38 percent of poor working-age adults held jobs. The Census Bureau, in its 2000 annual report on poverty, observes that "having a job, even a full-time job, does not guarantee an escape from poverty." It is more likely today than it was seven years ago, as the Census Bureau tracks trends, that poor households have a working family member.

Some of these households include children. A Department of Labor report from 2000 showed that 8.5 percent of families with children under 18 were "working poor." An Urban Institute study from that year estimated that one in six nonelderly (under age 65) Americans lives in a family in which adults work at least half-time but family income falls below twice the federal poverty level. This range is important because within it families are more likely to experience hardship: to skip a meal or a bill payment.

Despite changes in the economy since the Urban Institute's data were collected, Gregory Acs, one of the authors of the report, says his one-in-six estimate remains reasonable.

In Low Wage Workers in the New Economy (Urban Institute, 2001), Richard Kazis notes that the incomes of more than 9 million working Americans are below the poverty level. He and others who analyze the jobs picture agree that low-wage jobs are a needed entry way into me economy. But for those with families to support and lots of bills to pay, "the challenge becomes what kind of policies can help people move up," says Kazis, senior vice president of Jobs for the Future, a Boston group that specializes in workforce development issues.

IN A 2002 study of 30,000 welfare recipients, the Manpower Research Demonstration Corporation found that those who succeeded in staying off welfare were older, better educated, and had more recent work experience and fewer children and child care problems. (The average welfare family size is 2.6; some families have two children and a single mother, others only one child.) But success is relative to the goal of staying off welfare, not of escaping poverty. According to the report, "Many families who leave and stay off welfare long term are still poor when they leave."

For poor working families, the low wages of work aren't a vehicle out of poverty but merely a bus ticket to the next paycheck. Barbara Ehrenreich rode that bus for a year, an experience she describes in Nickel and Dimed: On (Not) Getting By in America (2001). She chronicled her attempt to support herself on a variety of low-wage jobs, and reported on the economic difficulties of those with whom she worked. The insufficiency of work to provide self-sufficiency is behind the movement--backed by many religious groups--to ensure that all employers pay a living wage, which is generally understood to be the wage needed to support a family at or slightly above the poverty level.

The minimum wage is considerably less than a living wage. A full-time, 35-hour-a-week job paying $5.15 an hour (the minimum) yields a yearly income of $9,373. The federal poverty level for a family of three (with one wage-earning adult but three bodies to feed, clothe and house) is $14,259. If the pay scale rises to $8 an hour, the income rises to $14,560, one week's paycheck above poverty level. Consider the case of Myrna, a 42-year-old single mother supporting two children. The family lives in Aurora, a mixed working-and middle-class city of 150,000 outside Chicago. Myrna worked hard enough as a bank teller to get a promotion to teller supervisor. She got a $3,000 raise, boosting her income to $25,000. She also became eligible for overtime pay. Before her promotion, she had qualified for a state-paid child care subsidy. She paid 827 weekly for after-school care for her two boys, ages eight and nine. But she discovered that her promotion disqualified her for the subsidy. Unsubsidized, the cost rose to $108 weekly per child. So her advancement at work cost her $8,450 a year in child care assistance.