In the Sunday Book World, a word in Robert Kuttner's review of Charles Murray's "Losing Ground: American Social Policy, 1950-1980" was misprinted. The sentence should have read, "Welfare became far more unattractive relative to work after 1970."
CHARLES MURRAY's provocative thesis can be summed up in three words: social programs backfire. His prose is thoughtful, well-mannered, tempered by protestations of deep concern for the poor, and bolstered by seemingly impressive data. He is certainly right that the poor are still with us. But his effort to blame poverty upon the war on poverty is overstated and often based on dubious statistical artifice.
Murray begins by documenting how the condition of poor people, and especially black families, worsened during the 1960s, precisely when social outlays were burgeoning. Poverty rates declined, but illegitimacy, welfare dependency, youth unemployment, all increased, while the purchasing power of black earned income soon eroded. Blacks who made it into the labor force improved their status relative to whites, but the black "underclass" fell further behind.
Murray's disconcerting conclusion is that the programs themselves were largely responsible for the lost ground. Incentives influence behavior, and Murray argues that the incentives of the 1960s promoted idleness. Specifically, more generous welfare benefits discouraged work effort; permissive and experimental schooling retarded education. And well intentioned court reforms made criminal behavior a nearly risk-free option for ghetto youth. Worst yet, Murray contends, do-gooder programs not only created inducements for lazy, shiftless and irresponsible behavior, but they mocked the upward striving of the more diligent poor by treating idleness more generously than effort. "When working no longer provides either income or status," Murray writes, "the last reason for working has truly vanished. The man who keeps working is in fact a chump."
His solution, stripped of the mannered prose, is the familiar one of social Darwinism, a theme that really goes all the way back to the English poor laws. Coddling the poor makes them uppity; if welfare benefits compete with the meager rewards of low-wage jobs, nobody will sweep the streets, and the poor will be spoiled rotten. Affirmative action, which violates the basic link between merit and reward, is a further assault on the work ethic. Thus, we should scrap the social programs, and go back to the discipline of the market.
What differentiates Murray's book from conventional conservative truisms about "permissivness" is the seemingly impressive array of data, and the subtle analysis. For a moment, one believes that social programs indeed cause poverty. But much of the analysis, on closer inspection, is inconsistent with the data; and more seriously, some of the stastics are misleadingly deployed, to put it charitably.
For example, one of Murray's most persuasive devices is a hypothetical young black couple, whom Murray dubs Harold and Phyllis. According to Murray, in 1960, when welfare benefits were stingy and standards strict, it made more economic sense for Harold, Phyllis, and their young baby to lead a conventional family life. They get married, Harold takes a job, and the net family income, $40 a week from Harold's minimum-wage job, is superior to the $23 a week Phyllis could get from welfare.
But by 1970, welfare benefits have so increased that the family does better if they stay unmarried, Harold works intermittently if at all, and Phyllis becomes a welfare mother. The minimum-wage job now pays about $136 a week (before taxes), but the package of "welfare" benefits now pays Phyllis $134 a week, tax free. Good intentions have broken up another family.
SEVERAL THINGS, however, are wrong with this picture. First, Murray has credited food stamps as part of the welfare package but not part of the work package, even though the working poor qualify for food stamps. In truth, Harold does not have to quit his job to get food stamps. All of the work disincentives attributed to AFDC (Aid For Dependent Children) do not apply to food stamps. Secondly, if one reads the footnotes carefully, Murray has located Harold and Phyllis in Pennsylvania, a state where AFDC levels increased far more than the national average during the l970s. Place Harold and Phyllis in most states, and the supposed incentives for idleness would be minimized. The actual arithmetic of work versus welfare is quite different from Murray's chart. In most states, it paid to work, even in 1970.
Finally, though the book's subtitle is "American Social Policy, 1950-1980," Murray is too reticent about what happens after 1970. In fact, AFDC benefits during the 1970s declined by about 30 percent; Congress also added the "Earned Income Tax Credit," which made it still more attractive for the poor to work (and which is nowhere mentioned in the analysis). Welfare became far more unattractive relative to work after 1970. If Murray is right, the trends should have reversed in the 1970s; the poor should have quit the welfare rolls and taken honest, low-wage jobs. But of course unemployment soared during the 1970s, and so did illegitimacy and the other pathologies. Clearly, something else must be at work.
Murray is also oddly silent on the influence of unemployment. Joblessness increased during the 1970s, mainly as a result of macroeconomic and demographic factors: OPEC, stagflation, slower growth, and the huge increase in the working age population relative to the supply of jobs. Murray implies that unemployment may have increased because the poor chose the welfare life over the working life; but that hardly makes sense given the macroeconomic climate of higher joblessness.
It is hardly surprising that as unemployment rates rose, they hit young blacks -- often the least job-prepared segment of the population -- with greatest force. Blacks historically have made their greatest gains during periods of near full employment, and suffered reverses when jobs were in short supply. At one point in the book Murray observes that many more blacks went to college after the 1960s. At a later point, he blames the statistical drop in black labor force participation on the welfare culture, when in fact much of it reflects those blacks staying in school.
Another serious lapse in the logic is the assumption that people get locked into the welfare culture for the long term. But most reputable studies, notably the extensive Michigan panel study, concluded that less than one-fifth of welfare recipients were long-term cases. The bulk went on the rolls when unemployment, illness, illegitimacy, or other misfortunes struck, and soon went back into the job market. If the welfare culture were as attractive as Murray paints it, people would simply get on welfare and stay there. In a treatise so richly festooned with scholarly references, it is odd that ne of this literature is acknowledged.
Finally, Murray extrapolates from the most intractable piece of the poverty puzzle -- the culture of the "welfare mother" and the black underclass -- to social policy as a whole. But AFDC represents less than 10 percent of social spending. He virtually ignores the impressive reduction of poverty among the elderly attributable to rising Social Security levels, the well documented improvements in health care, infant mortality and longevity that flow from Medicare and Medicaid, the gains in nutrition that resulted from food stamps, and the nearly universally acclaimed benefits of particular programs like Headstart.
The roots of black poverty are deep and tangled. White America has committed a variety of assaults on its black citizens, including slavery, segregation, and legal discrimination in housing, employment, accommodation, and education, which ended only in the mid-'60s. In assigning causality for the continuig black plight, it is short sighted, if not churlish, to focus on the one moment when the white community endeavored to right past wrongs. One should not read Murray without reading Myrdal.
Murray, to be sure, provides much food for further thought. Two decades of antipoverty programs relieved some misery; but they did not eliminate poverty. Illegitimacy indeed continues to rise, despite a decade of diminished coddling of the poor. Inner-city education is a mess; crime is far too risk-free. Youth unemployment is a scandal. But a fair look at the real benefit levels suggests that people still do much better taking jobs than taking welfare, when jobs are available. I agree with Murray about the limits of social transfers; but I conclude that the answer is a commitment to full employment, not to social Darwinism.
"Social programs backfire" is a very marketable theme these days. Losing Ground is the apotheosis of the sort of article that regularly graces the pages of the Public Interest Quarterly and the editorial pages of The Wall Street Journal. Properly qualified, the claim is sometimes valid. But the contentions in this book are far too sweeping, and they are often inconsistent with the data. Murray, who will be lionized as the thinking man's George Gilder, has not proven his case.