Journal Issue: The Next Generation of Antipoverty Policies Volume 17 Number 2 Fall 2007
Extending Sticks and Carrots to Young Men
A major limitation of the current stick-andcarrot approach to fighting poverty and reducing inequality is that it is confined almost exclusively to single mothers. At the same time as poor women were entering the labor force by the millions during the 1990s, the work rate among less-educated men fell. That decline is particularly remarkable because during the second half of the 1990s the unemployment rate fell to 4 percent and wage rates at the bottom of the wage distribution rose for the first time in two decades. The stick-and-carrot approach of encouraging or requiring work and reinforcing it with work support benefits has not been tried with men, in part because most are not eligible for public benefits. Thus, we asked two of our authors, Gordon Berlin, president of MDRC, and Lawrence Mead of New York University, to focus their antipoverty analysis and recommendations on young men.
Providing Work Incentives for Fathers
As noted, falling wages and the striking increase in children living with a lone parent, usually the mother, are the two principal explanations for the lack of progress against poverty since 1973. The problems of falling wages and single parenthood are intertwined. As the wages of men with a high school education or less began to tumble, their employment rates also fell. The result was that the share of men who could support a family above the poverty line began to decline, reducing the willingness of low-income women to marry the fathers of their children. Lowincome men and women consistently tell interviewers that they weigh these issues when making decisions about marriage.
Berlin’s proposal would partially overcome the low wages and income of poorly educated males by using the earned income tax credit to supplement the earnings of all low-wage workers aged twenty-one or older who work full time—regardless of whether they have children or whether they are married. Berlin argues that by conditioning the benefit on full-time work, by targeting individuals regardless of their family status, and by treating EITC payments as individual income rather than as joint income for income tax purposes, this earnings-based supplement would restore equity to the American social compact without distorting incentives to work, marry, and bear children. In addition, the policy would create social policy parity between poor men and women, help noncustodial fathers in lowwage jobs meet their child support obligations, and raise the opportunity cost of criminal activity. The largest benefits by far would accrue to two-parent households in which both adults work full time. The policy would come with a price tag of nearly $30 billion a year when fully implemented.
Helping Fathers with Special Problems
Although increasing wage subsidies could increase work rates among poor males, Mead argues that low wages are not the primary reason for their lack of employment. Many poor men appear to resist taking or keeping low-paid jobs because of an oppositional culture in which the search for respect takes precedence over maximizing income. Thus, although work subsidies like Berlin’s EITC proposal would likely make some difference, Mead believes that restoring work discipline among many of these men requires special measures. He recommends that government link new benefits with work requirements, as it has for welfare mothers. Two groups of disadvantaged men present an opportunity to test Mead’s approach of combining the government’s authority to require work with its ability to provide rewards for work. Specifically, disadvantaged men who owe child support and ex-offenders who have been released from prison on parole would be assigned to a mandatory work program if they did not work regularly. There, in return for supervised employment, they might receive the enhanced work subsidies recommended by Gordon Berlin. Large child support arrears might also be reduced. Such a work program might cost from $2.4 billion to $4.8 billion annually. A similar child support model was tested during the 1990s with partial success, and evaluations of prison reentry programs along these lines are currently under way.8 If these studies show positive results, Mead favors federal funding of additional demonstrations to help settle on the best model for mandatory work programs.