ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, June 18, 1996 TAG: 9606180078
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
ACTIVISTS WORRY the money being spent to make worst-case welfare recipients self-sufficient will leave less aid available for the much larger number of low-income working families.
Gary Foutz and his wife earned a comfortable living.
He worked as an exterminator, she as a factory laborer. They rented an apartment in Southwest Roanoke County. The rent was high but manageable - worth it for the peaceful, country surroundings.
They considered themselves solid middle-class citizens.
In February, Foutz, 43, had surgery on two ruptured disks in his back. He was scheduled to miss work four to six weeks.
Sixteen weeks later, Foutz still is recuperating.
Returning to work has been out of the question because he can't stand or sit for long, he said. His wages - the bulk of the family income - are gone. Because the injury didn't occur on the job, Foutz is not eligible for workers' compensation payments.
They are living on his wife's small salary. Foutz asked that it not be made public. His wife asked that her name not be used.
Foutz had the phone service cut off to save money. He uses a pager and a pay phone at a nearby convenience store as a cheaper option.
They are looking for an apartment with lower rent. They applied for food stamps but were turned down because their reduced income was $33 more than allowed. Foutz's wife is working overtime to make ends meet.
"We're not starving," said Foutz, who made an unsuccessful bid for Roanoke City Council in 1982. "But we're not used to this way of living."
They live now as do 4.8 million families nationwide who have been dubbed "the working poor." They are families that fail to accumulate a total household income above the federal poverty line - $12,980 for a family of three - despite having one or both heads of household working all or part of the year.
"Something just ain't right about the way the welfare system is," Foutz said. "They don't want to raise minimum wage and help people, but at the same time they want to do away with welfare."
Concern has surfaced in the national clamor over welfare: How will retooling the welfare system - primarily Aid to Families with Dependent Children - affect the working poor?
Virginia is nearly one year into its welfare-to-work plan. The plan cuts off AFDC benefits after two years and provides a third year of transitional benefits - transportation, Medicaid, food stamps and child care.
Advocates for the poor have questioned whether a plan aimed at putting recipients to work will wind up hurting the poor who already have jobs.
"The concern is that this effort will divert funds from people who are poor but who do not meet the AFDC level income," said Judy Mason, executive director of the Richmond-based Virginia Council Against Poverty. "Dollars could be diverted from programs that are working for low-income people and be diverted into welfare reform."
She cited a proposal this year to cut $2.1 million in state funding for Virginia's community action agencies and allocate it to the state's welfare-to-work efforts. In explaining the proposed cut, state social services officials told Mason that they had been "charged with finding all available dollars they could to focus toward welfare reform," she said.
Although the state legislature restored the funding, the proposal concerns Mason. The state's 26 community action agencies, including Roanoke's Total Action Against Poverty, provide programs that help not only people on welfare but also the working poor - home ownership programs and basic emergency assistance with rent or utility bills when hard times hit.
"It's refocusing dollars," she said. "You spent money on one program, and you're going to spend it on something else."
More than 800,000 Virginians are classified as low-income - those who receive food stamps, fuel assistance and medical benefits, according the U.S. Census Bureau. But only 74,000 of those receive AFDC, the nation's primary form of welfare and the target of efforts to change the system.
AFDC recipients fall into the category of people who need an intense level of services to become self-sufficient, Mason said. When resources are concentrated in an effort to help them become self-sufficient, she said, fewer resources are available for low-income working people.
And the fewer resources for them, the greater the chance they will fall into poverty, Mason said.
"The frustrating thing may be that at one end of the spectrum, you're moving families out of poverty, but they're just being replaced by other families," she said.
The Annie E. Casey Foundation's latest study - "Kids Count Data Book" for 1996 - found that nationally, 7.3 percent of children are growing up in working poor families. In Virginia, 5.4 percent of children are in working poor families.
The foundation - a Baltimore-based organization that works with programs affecting disadvantaged children and families - noted in the study's overview that national debates on social and economic policy in the United States have focused on people who are not working and who are dependent on public assistance.
But what policy-makers have overlooked, the foundation said, is the growth in the number of American children who live in poverty despite the fact that one or both of their parents work all year. More than a third of the nation's poor children are in families where at least one parent works all year.
"The goal of virtually every welfare reform proposal is to enable AFDC recipients to become more capable of meeting the economic needs of their children through their own labor and earnings," Douglas Nelson, the foundation's executive director, wrote.
"But if we continue to see growing millions of American families who are unable to protect their kids from poverty despite year-round work efforts, it is truly hard to imagine how we will plausibly promote meaningful self-sufficiency for those millions of parents who are not yet even in the labor force."
In the late 1960s, a full-time job at minimum wage could keep a family of three out of poverty, according to the foundation. In 1994, a full-time minimum wage job provided only 70 percent of the income needed to keep the family out of poverty.
The foundation has suggested enhancing wages earned by the working poor by strengthening of the earned income tax credit, a government subsidy to keep the working poor above the poverty line. It provides low-income wage earners with a refundable tax credit that enlarges their net income.
Enhancing the tax credit may be preferred over a minimum wage increase, said Naomi Lopez, a health and welfare studies researcher for the Cato Institute, a libertarian think tank in Washington.
"Some people believe that increasing the minimum wage offers people a better standard of living," Lopez said. "But you're also siphoning new job creation."
Small employers may not be able to pay higher wages, she said, adding that a loss of jobs could be the result.
"It would do a lot more good to focus on the earned income tax credit than on increasing minimum wage," Lopez said. "What it does is actually increase household income."
The foundation maintains that the suggested tax credit has the effect of raising the pay of a minimum wage worker with two children from $4.25 an hour to $6 an hour.
But on its own, that income still would not be enough to lift that family above the federal poverty level.
Gary Foutz applied for Social Security disability benefits. He was turned down because his doctors anticipate his condition improving and his return to work by the end of the year, he said.
He said he doesn't know how. Spasms sear the middle of his back without warning and knock him off his feet, and his left leg feels like a hunk of concrete, he said.
His exterminator job still is open to him. But he said bending under cabinets and kitchen sinks "is impossible."
He applied for four jobs with less physically taxing work. He's been up front with employers about his back problems. That may be why no one will hire him, he said.
The Foutzes' 22-year-old daughter is planning to marry next month.
"I can't give her a good wedding, like I wanted to," Foutz said. "But I'll do what I can for her.
"I've come to the conclusion that I have to go one day at a time. I can't look to the future anymore."
LENGTH: Long : 150 lines ILLUSTRATION: PHOTO: WAYNE DEEL/Staff. Gary Foutz may soon have to move fromby CNBhis apartment in Buck Run Drive if he cannot find work that he can
do with his back injury. color.