One Saturday in late summer, Mary Manley's 20-year-old son, Earl, came home from a state camp for the retarded. Earl was a mess. He was grouchy from homesickness and bad food. The camp had lost most of his clothing. For the two weeks of her vacation, Mrs. Manley's daughter Michelle could look after him, but, if Michelle went back to work, Mrs. Manley didn't know what she would do with Earl.

In the eyes of the federal government, Mrs. Manley's life at this point would have seemed a great triumph. The Manleys were a family that had just ended two decades of welfare dependency. Michelle, thanks to the government, had made the transition from school to work without getting on welfare. Mrs. Manley, thanks to Michelle's job, would (in the eyes of the government) no longer be needing her welfare check. Now, for the first time, the Manley family -- five people out of 10 million on welfare -- was finally free of the system.

In the eyes of Mrs. Manley, the situation was precisely the opposite: The government, by taking her welfare check away, had turned her financial situation from precarious to untenable.

Mrs. Manley's gas was cut off. Hew welfare check was cut off. She had Earl to worry about. Her house was in the process of being repossessed for nonpayment of the mortgage. She had to find a way out. And the way she would find would horrify -- there is no other word for it -- a government policymaker looking on with pride at her exit from the welfare rolls.

She decided to worry first about the house.

On the Monday after Earl came home from camp, Mrs. Manley went up to her congressman's district office and told one of the assistants there about her problems with the house. The assistant suggested a plan: Mrs. Manley owed the mortgage company $2,100 in back payments and lawyers' fees. The aide would call the company and suggest that Mrs. Manley pay half the money on Wednesday and the other half after two or three more weeks. Then she would call Mrs. Manley back; meanwhile, Mrs. Manley was to try to raise some money.

Where would a poor woman raise $1,000 in a hurry? Her best hope was the informal network of friends and relatives on whom she had relied through years of such crises, just as many of them had relied on her. The network was, in effect, Mrs. Manley's bank. She began calling and visiting around North Philadelphia.

By Wednesday the congressman's aide hadn't called yet, and Mrs. Manley hadn't come up with much of the money either. She called on her more prosperous brothers and sisters and got a couple of hundred dollars. She went to see a lifetime's worth of acquaintances around North Philadelphia and got a little. A new friend promised $200. She thought she was around the $500 mark, and she was still trying.

Mrs. Manley was sitting in her office, a glassed-in cubicle just inside the front door of the R. W. Brown Community Center, a sort of children's camp in a drafty old building nestled by an elevated railroad track in the heart of North Philadelphia.

She wore a pink cotton dress with a white rope belt that had small seashells fastened to the ends. She fanned herself with a sheet of paper. Every now and then she waved away the flies that were buzzing around her office.

She smiled and waved at the children and counselors coming in and out. Her job was to answer the phone, write down the caller's name, and transfer the call.

She had been doing it for 11 years, and next to her children and grandchildren it was the chief source of pleasure in her life. She harbored no illusions that her work was challenging or creative, but it did provide regular, pleasant human contact. Also it paid better than just being on welfare. When she began working she allowed herself to believe that it would lead somewhere financially; that, as she puts it, "I could be able to stand on my own two feet." That never happened, but the money was still nice. And there was another advantage: "Mentally, when I started working at least I didn't have time to be depressed all the time."

There was a lull in the calls and she picked up the phone to try to put the touch on yet another friend.

"How you doing?" she said into the phone. She listened for a moment. "Oh yeah? She got hurt bad? Oh, Lord. Ain't that something. What they stepped on? Her leg or her stomach? Her back? God! That's the kind of thing makes you want to run away from here. Gee whiz! "

She hung up the phone."Oh boy," she said. "Can't get no money there. She don't have any."

She picked up the phone again and called Michelle at home. "What your girlfriend's name, Michelle?" she said. "Yeah, well, she got hurt. She got trampled on her back. That's right."

She looked at the clock on the wall. It was after noon already. "Oh, Lord," she said. "I'm telling you. That girl at the congressmen's office don't call me, I don't know what. I'm gonna call her." She called the congressman's office. There was no answer.

Politicians often complain that the welfare system discourages its beneficiaries from working, and thus encourages them to become dependent on the state.

"When Los Angeles is supposed to have a higher than the normal unemployment rate," Ronald Reagan said this summer, "The Los Angeles Times carried 65 full pages of help-wanted ads, and you wonder how we call someone unemployed if there are employers taking out ads begging someone to come to work. Maybe part of our employment problem has been that with the best of intentions and the utmost generosity we made it uneconomical for some people to work."

Milton Friedman, the Nobel Prize-winning conservative economist, puts it even more pointedly. "Suppose you were cruel," he said in a recent television documentary about welfare, "and took away the welfare overnight. Cut it off. What would happen?"

While speculating on this, Friedman was standing in front of a public housing project, discussing the plight of a man on welfare who lived inside. "He would get a job," Friedman said. "What kind of a job? I don't know. It might not be a very attractive job. But at some wage, at some level of pay, there will always be a job that he could get for himself."

In North Philadelphia, there are plenty of people who agree with that view. Even Mary Manley agrees, up to a point, the point being that she isn't like that and neither are her friends. "They got plenty of people on welfare that uses drugs and drinks," she says. "And I don't know none of them."

There are even people who are living proof of the Reagan-Friedman view -- Pearl Brown, for instance. She is 23 years old, lives alone in a $100-a-month apartment, gets $172 a month in welfare and $51 a month in food stamps along with free medical treatment, and has no intention of working any time soon. She has had two factory jobs this year, but quit both after a few days because she found the work dull.

"Whatever job I get right now is gonna be penny ante," she says. "I'd rather be at home taking a rest. One day I hope to be making good money. Right now I'm content living on $1,600 a year." A generation ago, women such as Pearl Brown often made their living as housemaids; now, almost none does, and welfare -- which pays about the same and is perceived as having a marginally higher dignity level -- is one reason why.

The consensus among North Philadelphians is that of the people on welfare, perhaps a quarter or third are practically devoid of ambition and make no real effort to get jobs.

But the majority would rather work.

There's no more vivid proof of the strength of the desire to work than the scene on summer mornings at 4 o'clock at the intersection of ninth and Jefferson streets in North Philadelphia. Before the first hint of dawn, there will be anywhere from 50 to 200 people lined up in the dark, carrying small plastic sacks. They're waiting to get on creaky old buses that will take them to the farmland of New Jersey to pick blueberries or peaches or apples all day and then return them to North Philadelphia at 5 or 6 in the evening.

There are half a dozen farm labor pickup points around North Philadelphia, all jammed every morning at 4. At the peak of the season, 3,000 to 5,000 people in North Philadelphia work as day farm laborers. They're paid anywhere from $8 to $40 a day, depending on how much they pick. Every day the buses have to turn people away.

Fast food restaurants in North Philadelphia get an average of 25 applications a week. Employment agencies, which place people in low-level jobs in exchange for a week's wages and which have a reputation on the street for providing placements that don't last very long, dot North Philadelphia and no other part of town. They get as many as a thousand applications a week.

The federal Work Incentives Program in Philadelphia has 72,000 registrants, and placed fewer than 1,000 people in jobs last year. Enlistment in the Army in Philadelphia is largely black and poor; it's a job middle-class people won't take but poor people will. bAll day long, people drift into State Rep. Milton Street's office on Diamond Street to ask about jobs.

The Philadelphia Inquirer carries pages and pages of help-wanted ads, mostly for skilled jobs. In the Philadelphia Daily News, the paper most-read in North Philadelphia, the help-wanted column is usually only a few inches long, and filled largely with ads for maids, for "masseuses" and "dancers," and from the employment agencies. The Philadelphia Tribune, the black paper, has even fewer help-wanted ads.

The main reason people prefer working to welfare is that it pays better. Take-home pay from a minimum-wage job in Philadelphia is about $100 a week. One person on welfare in Philadelphia gets $39.62 a week; a family of four, $87.92. Most people on welfare get food stamps too, but people at the bottom of the employment scale are also eligible for food stamps. The Pennsylvania welfare benefits went up in January, but only by 5.45 percent, and the previous time they went up was 1974. That's hardly the same pace as inflation.

Mrs. Manley knows there aren't many jobs available, and that most of the jobs that do exist offer neither security nor the possibility of advancement. As is the case with most people in North Philadelphia, the notion that there is an autonomous thing called "the economy" means nothing to her. The same goes for the idea that any American who is intelligent and hard-working will get ahead.

"That's what people just say and the people that says that don't know what they're saying," says Mrs. Manley. "That's a saying, not reality. That must come from somebody that hasn't been here, I guess."

Ask a North Philadelphian what causes jobs to be available, and you'll usually hear that the white people just decide, for reasons of their own, to "put some jobs out here." There being no white people in North Philadelphia, the idea that whites work in concert seems perfectly plausible.

Everybody on welfare in Philadelphia is aware that the system provides enticements not to work and to live at a level that is meager but well above starvation. But if they don't work, it's usually not because they have chosen this life, but for other reasons. They can't find a job. They have kids at home. They got a bad break.

Or for another reason, one that makes somewhat less sense but is essential to the life of North Philadelphia.

"Getting over" is a popular expression in North Philadelphia. Literally, it means getting by, or getting something you need: sex, money, food. It also sometimes carries an implication of stealth; for instance, cheating on welfare by not reporting income is known as "getting over." Finally, "getting over" implies immediacy: One generally worries less about getting ahead in life than about getting through the day.

Thus major life decisions about love and work are often made with tomorrow or next week in mind, rather than the rest of one's life. Traditionally, in North Philadelphia there has been little incentive to plan ahead. So people buy furniture and television sets they can't afford. They play, in droves, the state lottery or the still-flourishing illegal numbers, which requires a smaller bet -- 25 cents to win $125. Many of them drink, if that helps. And they go on and off of welfare, not because of long-range planning or deep-seated ideals, but because of what makes sense in the short run.

By Wednesday afternoon, Mary Manley, climbing the walls with nervousness, called the congressman's aide at home. "This is Mary," she said. "Mary Manley. I just been kind of jittery all day. You home with a cold? I hate to bother you but you can imagine, not knowing nothing."

The aide hadn't called the mortgage company. Nothing was arranged. Mrs. Manley hadn't gotten any more money. She figured that she'd have to work it out with the mortgage company by herself, and before she called she wanted to have the money.

There was one way she knew she could get her hands on a large chunk of cash immediately, and stave off the repossession of her house.

She could quit her job.

She walked down the hall to her boss's office and announced that, after 11 years at the community center, she was quitting to take care of Earl. How much could she get, she asked her boss, if you added up her paycheck, her severance pay, and her unused vacation days?

Her boss sat down and figured it out: $490. He told her he would have the check ready the next day. Mrs. Manley thanked him.

"Well," she said when she got back to her desk, "you just have to sooner or later give it up. I've done my best."

Now Mary Manley was in clear sight of the money she needed to keep the mortgage company at bay for a few weeks. And, of course, now that she had quit her job, Mrs. Manley could go back on welfare.