In the past dozen years, the U.S. government has financed four major experiments with the guaranteed-income concept for poor people, the Labor Department reports, and the results were always the same: people who got the guaranteed income worked less than those who didn't. Some worked a lot less and some only a bit less, but all worked less.
The findings, summarized in the latest issue of the Labor Department's Monthly Labor Review by Prof. Robert A. Moffitt of Rutgers University, appear to support Reagan administration arguments that unless welfare programs include a strong work requirement, many recipients will reduce their work effort and not make a maximum attempt to get off welfare and into a full-time job.
The administration is backing an extreme emphasis on work requirements as part of its proposals to change the $13 billion federal-state welfare program for families with dependent children.
The four experiments, the only major ones undertaken in this country, were conducted over the past dozen years. On involving 1,300 people, took place in New Jersey and Pennsylvania from 1968 to 1972; a second (800 people) in rual areas of North Carolina and Iowa from 1979 to 1972; a third (4,800 people) in Seattle and Denver from 1970 to 1978, and the fourth (1,800) in Gary, Ind., from 1971 to 1974.
Conditions varied from place to place, according to Moffitt. But basically, the participants -- all low-income or impoverished -- were given a govenment welfare payment (or negative income tax payment, as the cash payment was sometimes called.) On the average, according to Moffitt, the payment was equal to the poverty line (now $8,410 for a family of four).
Recipients were told that they were not required to work. But if they did work, their welfare payment would be reduced by 50 cents for each dollar earned; in effect, they could keep the full welfare payment and half of anything earned.
The work behavior of recipients was then compared with a "control" group consisting of nonrecipients with similar social characteristics.
Here are the results as reported by Moffitt:
All four experiments produced "unequivocal evidence that hours of work are reduced by the negative income tax."
Husbands in intact families reduced their work effort by only a few hours a week on the averge, anywhere from 1 to 8 percent, as compared with the control group. Moffitt concluded that while a guaranteed income, at the relatively low levels of support involved in the studies, reduced the work ethic somewhat for husbands, the negative income tax "does not appear to have a persuasive effect." He said the 1 percent to 8 percent reduction was largely the product of a handful of men ceasing work altogether; most others had minor or no reduction of hours.
For wives in these families, the reduction of work effort varied but on the whole was much greater. One group (black women in the New Jersey-Pennsylvania experiment) reduced their hours only 2.2 percent, but in other places reduction of wives' hours ranged from 14.6 percent (Seattle-Denver) to 20 percent (Iowa white wives) to 30 percent (North Carolina black wives and New Jersey-Pennsylvania white wives) to 55 pecent (Spanish-speaking wives in New Jersey-Pennsyvania). (Moffitt thinks the 55 percent figure is so high it may be a fluke.)
Female heads of families also reduced their work effort -- about 11.9 percent in Seattle-Denver and possibly as much as 27.8 percent in Gary (Moffitt thinks the latter raw figure is too high and has recalculated it to 9 percent). t
All told, says Moffitt, the studies show conclusively that a guaranteed income without any work requirement, even at the low levels of support involved in these four experiments, cause people to work less.