Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 14, 1991 TAG: 9103140402
SECTION: EDITORIAL PAGE: A-13 EDITION: METRO
SOURCE: RAY L. GARLAND
DATELINE: LENGTH: Long
RUMMAGING through my "welfare" file turned up a painful letter to Ann Landers from "Almost Free in Iowa." The writer addressed the stigma she feels from having been stuck on welfare for seven years. "If I work," she said, "the minimum-wage money earned is deducted from my next month's welfare check. There is no legal way to get ahead . . . Being forced to buy groceries with food stamps produces feelings of guilt and shame that I can't put into words."
The other side of that coin was revealed in a powerful letter-to-the-editor, under the heading "Low-paid workers need helping hand." This came from a woman fully employed, earning about $1,100 a month, who could not possibly support herself and five dependents, no matter how hard she tried.
Her letter illustrated perfectly the plight of the "working poor" in this country. You see them everywhere, doing hard and useful work, making up about 10 percent of the population. They are forced always to live from hand to mouth. They are always near the bottom of political priorities. While the woman said she had been turned down by Social Services and other "helpers" because she was employed, the local welfare office told me that based on the information provided she would be eligible for some food stamps.
But not Medicaid. For the approximately 35 million Americans without public or private health insurance, illness is the spectre which can devastate a carefully hedged budget at a single stroke.
The hope has risen of late that the spirit and pride created by the successful Gulf War can kick the "Vietnam syndrome" of falling expectations and be used to rally solutions for seemingly intractable domestic problems.
Welfare and the problems of the working poor would be an excellent place to start. The trouble is a lack of political dividends. Democrats see themselves as the special benefactors and political beneficiaries of the poor and their army of "helpers." Republicans see little political profit in taking up this cause. As for the working poor, they are seen by politicians of all stripes as politically unorganized and having little interest in the outcome of debates that might improve their lot.
In the city of Roanoke, one out of eight citizens is receiving some form of welfare assistance. More than 40 percent of the public-school students are deemed eligible for subsidized school lunches. But for those fully integrated into the bosom of the welfare system, for all its flaws, the rewards are at least as good as the working poor can obtain outside the system.
A single parent with three kids and no other income can receive $347 a month in cash plus another $250 in food stamps. If enrolled in public housing, such parents are likely to get an indirect subsidy worth another $250 a month. Medicaid would provide health insurance worth another $300. That translates to $13,764 a year, virtually free of tax.
The flaw in this picture is that only 30 percent of welfare recipients in Roanoke are in public housing. Absent the housing subsidy, only some form of illegal activity will keep the wolf from breaking down the door.
But compare the fully-integrated welfare family with the plight of the working poor. While a $13,764 annual earned income would be mercifully free from income taxes in the case of a wage-earner with three dependents - and would qualify for an earned-income credit of about $750 - this person would still pay a Social Security tax of $1,053. The bottom line is that for all the effort and incidental expense of holding down a full-time job, this person wouldn't be any better off financially than the full-fledged welfare recipient. And if their employer didn't provide health insurance, they would actually be worse off.
One place to start attacking these problems would be by incorporating the food-stamp allowance in the regular monthly check. Because food stamps are the same as cash, accepted without identification, they are always at risk of being stolen, swapped or counterfeited. Also, as one welfare administrator told me, "Food stamps make for a grubby program." By that she meant they require extraordinary bureaucratic oversight while advertising a welfare stigma for many who must hand them across while others watch.
Food stamps survive as a separate program despite these drawbacks because farm-state conservatives join liberals in blocking change. The farmers have a touching belief that they help them sell more food, while liberals fear a revolt from their constituency groups if the stamps disappeared.
If we can't touch food stamps, perhaps we could tackle the larger problem of providing more incentives for people on welfare to take jobs. Instead of offering a complex plan to extend individual retirement accounts to those already enrolled in tax-free private pension plans (as 70 U.S. senators would do), why not use the money the government would lose to preserve a larger share of welfare benefits for those willing to take low-paying jobs?
While the problem of extending health insurance to the uninsured working poor is too complex to be tackled here, it shouldn't be so difficult to expand the existing earned-income credit. Here again, we get help where it is most deserved and with a bare minimum of administrative expense.
by CNB