Work and Welfare (University Center for Human Values)

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The Nobel Prize-winning economist Robert Solow directs his attention here to one of today's most controversial social issues: how to get people off welfare and into jobs. With characteristic eloquence, wit, and rigor, Solow condemns the welfare reforms recently passed by Congress and President Clinton for confronting welfare recipients with an unworkable choice--finding work in the current labor market or losing benefits. He argues that the only practical and fair way to move recipients to work is, in contrast, through an ambitious plan to guarantee that every able-bodied citizen has access to a job.

Solow contends that the demand implicit in the 1996 Welfare Reform Act for welfare recipients to find work in the existing labor market has two crucial flaws. First, the labor market would not easily make room for a huge influx of unskilled, inexperienced workers. Second, the normal market adjustment to that influx would drive down earnings for those already in low-wage jobs. Solow concludes that it is legitimate to want welfare recipients to work, but not to want them to live at a miserable standard or to benefit at the expense of the working poor, especially since children are often the first to suffer. Instead, he writes, we should create new demand for unskilled labor through public-service employment and incentives to the private sector--in effect, fair "workfare." Solow presents widely ignored evidence that recipients themselves would welcome the chance to work. But he also points out that practical, morally defensible workfare would be extremely expensive--a problem that politicians who support the idea blithely fail to admit. Throughout, Solow places debate over welfare reform in the context of a struggle to balance competing social values, in particular self-reliance and altruism.

The book originated in Solow's 1997 Tanner Lectures on Human Values at Princeton University. It includes reactions from the distinguished scholars Gertrude Himmelfarb, Anthony Lewis, Glenn Loury, and John Roemer, who expand on and take issue with Solow's arguments. Work and Welfare is a powerful contribution to debate about welfare reform and a penetrating look at the values that shape its course.

Work and Welfare (University Center for Human Values) Review

The two essays in this brief book were originally the 1998 Tanner Lectures in Human Values, delivered by the Nobel Prize winning economist Robert Solow at Princeton. The volume also includes an introduction by political scientist Amy Guttman and comments by economists Glenn Loury and John Roemer, journalist Anthony Lewis, and historian Gertrude Himmelfarb. The book closes with Solow's response to the comments.

Solow's lectures were prompted by passage of the Personal Responsibility and Work Opportunity Act, signed by right-of-center Democrat Bill Clinton in 1996. Solow dismisses the title of the act as fatuous, and finds the Temporary Assistance to Needy Families (TANF) provision, meant to replace Aid to Families with Dependent Children (AFDC), as bordering on barbarous. With its diminished benefits and life-time restriction of five years of aid, Solow judges TANF to be a cynical political concession to the mean-spirited ignorance of benighted policy makers with no interest in the long-term harm it will do, especially to children.

The Republican authors of the Act proceeded from the unsubstantiated but politically popular assumptions that welfare bred dependency and that work was available for those who wanted it, the rest being slackers and malcontents. Since one of the provisions of the Act that eliminated AFDC, replacing it with the narrowly time-constrained TANF, provides for state-level welfare to work programs, Solow focuses on the likely efficacy and cost of welfare to work.

While Solow is nobody's radical, his work as a mainstream economist situated squarely within the neo-classical tradition has demonstrated that, even in the best of times, labor markets will rarely if ever provide jobs for all those willing and able to work. Moreover, a large percentage of workers will be limited to jobs that are unstable, pay too little to live on, and provide no fringe benefits. Furthermore, when times are tough, with high levels of unemployment and diminished real incomes, an ever larger number of prospective employees, as well as those unable to work, will be driven into abject poverty. Existing research, moreover, has convinced Solow that few people receiving welfare prefer it to the structure, purposefulness, and enhanced sense of self-reliance that comes with work.

Since the routine functioning of labor markets are inadequate to the task of providing decent employment, or any employment at all, for millions of prospective workers, Solow supports enhanced government involvement in welfare to work programs. He acknowledges, however, that such programs will be expensive, especially if they are to result in jobs that provide a level of compensation that will cover the cost of child care, as he thinks they must if welfare to work is to succeed.

Solow is a realist, and he acknowledges that the cost of effective welfare to work programs will test the altruism of the American electorate. Given that only two years have passed since enactment of the Personal Responsibility and Work Opportunity Act, Solow's lectures raise many unanswered questions, and Solow readily acknowledges the incompleteness of his proposal.

Whether or not one shares Solow's views, they are historically notable because they address consequences, in this case elimination of AFDC, of the first aggressive and dramatically consequential attack on the Social Security Act of 1935. In his first lecture, Solow notes in passing that Social Security for the elderly and infirm enjoys broad-based support across the political spectrum. While his lectures are in many ways timely, it is also clear that Solow failed to foresee the continuing rightward shift of political discourse in the U.S., rendering nothing sacred when confronted with the ideology of privatization and diminished government.

Those assigned the task of commenting on Solow's lectures were, with the exception of Gertrude Himmelfarb, in fundamental agreement with what they took to be his innocuously mainstream position. Himmelfarb, however, holds that Solow has given too little attention to the role of private charity, and has failed to include disincentives in the form of shame-based requirements for continued participation.

Loury's views, while similar to Solow's, place much greater emphasis on what he concludes are the already-inflicted injuries of ghetto-level poverty. Specifically, Loury has concluded that, whether or not the impoverished and unemployed want to work, they commonly lack the cultural wherewithal to do so.

Roemer's comment is especially interesting in that he has constructed a simplified mathematical model that provides approximate values for the cost and consequences of an effective national welfare to work program. Roemer notes that the modest cost, when calculated in the form of increased taxes for individuals and families, makes welfare to work seem practical and humane, but that even relatively small tax increases may be political poison.

Anyone who expects to find radical or even progressive proposals will not find them here. There are no references to vastly increased income inequality and diminished purchasing power for all but the rich, processes that were already underway in 1998. Furthermore, much like the influential sociologist William Julius Wilson, Solow, in his response to comments, gives voice to the very American, very conventional, and very dubious view that unemployment and poverty are fundamentally problems to be solved by improved education. The sharpest departure from very commonplace views is manifest in the comments of historian Himmelfarb, who seems to yearn for imposition of the values and ways of living of Victorian England.

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