In 1996 Congress and the President of the United States repealed the nation’s entitlement to welfare for single mothers and their children. In 950 the federal government stipulated that “all individuals wishing to make application for Aid to Dependent Children shall have the opportunity to do so, and that aid to dependent children shall be furnished with reasonable promptness to all eligible individuals."[1] The legislation replacing Aid to Families with Dependent Children (AFDC) and establishing its replacement, Temporary Aid to Needy Families (TANF) is very clear on the subject of entitlement: that the part of the legislation pertaining to TANF “shall not be interpreted to entitle any individual or family to assistance…."[2] Lifetime limits on receipt of benefits and strict work requirements, even for the mothers of young children, are the hallmarks of Washington’s new poor law.

AFDC is a lost entitlement for a very vulnerable group, single mother families.[3] Lurking in the background of AFDC throughout its troubled history—or perhaps in the foreground--was a missing entitlement.  The equivalent of an entitlement in the employment sphere is a job for all who seek to be employed. This is the missing entitlement in a society that reveres the work ethic but deprives millions of people the opportunity to practice it. The missing entitlement critically influenced the course of ADC/AFDC. In what follows I discuss the relationship between ADC/AFDC and the labor market, including the ways in which the existence of chronic, widespread unemployment and underemployment and its official denial or downplay contributed to the vulnerability and unpopularity of the program. Further, I examine lost opportunities for reform, give reasons why the entitlement to work was repeatedly rejected, and finally take a look at the labor-market context of the nation’s new welfare law that has the words “Work Opportunity” in its title--the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

AFDC and the Labor Market

AFDC was highly dependent on labor market conditions for both women and men. This was the case even though single mothers were excused from the labor market for the first 30 years and thereafter required to work or register for education and training only after their children reached various ages—six, three and in its last years, as little as one at states’ options. The advocates of what was first called Aid to Dependent Children[4] held the maternalist view that public assistance should free single mothers from the breadwinning role in order that they could perform the nurturing role. To the planners and advocates of ADC mothers were nurturers and fathers were breadwinners, a family policy that fit well with efforts to reduce the size of the labor market during an era of massive unemployment. In fact single mothers of dependent children were, like the elderly, defined as “unemployables.”[5] The model for ADC, the pre-Depression Mothers’ Aid programs available in most states, had the stated goal of enabling mothers to be nurturers but was so meager in benefits and limited in coverage that very few poor mothers had, in fact, been freed from the breadwinning role. The planners and advocates of ADC, women reformers in the U. S. Children’s Bureau, a division of the Department of Labor, held that federal funds would correct this shortcoming of state Mothers’ Aid programs.

Children in two-parent families with able-bodied fathers or potential breadwinners were excluded from ADC. The Social Security Act of 1935 defined a “dependent child” as one who is “deprived of parental support by death, continued absence from the home or physical or mental incapacity."[6] The advocates of ADC assumed that the large-scale public employment programs that were initiated months before the passage of the Social Security Act would meet the employment and income needs of two-parent families with able-bodied fathers who were excluded from ADC. These two major assumptions of the ADC planners proved wrong. Many of these fathers would not be able to support their families, and many single mothers would not be freed from the breadwinning role.

The New Deal work programs, ambitious as they were, served a minority of the unemployed, even at their peak, and were, in any case, terminated in 1942, not to be seen again for more than 30 years. After the brief spell of full employment during World War II, full employment, though seriously contemplated by Congress, was also among the missing. The “welfare fathers” were often unemployed or underemployed, and they were without federal aid altogether until 1962. After that, they and their families could get AFDC only if they met the strictest definitions of unemployment. Many of these men recognized that their families would be better off economically without them, either actually or only officially, for as single-mother families their wives and children would be eligible for ADC/AFDC. In its rationale for repeal and replacement of AFDC Congress, which regarded single motherhood as part of a “crisis” in the nation, deplored the fact that “Eighty-nine percent of children receiving AFDC benefits now live in homes in which no father is present.”[7] But Congress had made the rules that excluded nearly all fathers. If the welfare mothers were stigmatized and under-budgeted, the “welfare fathers” and their families had recourse only to even more meager state general assistance programs that were sometimes available only on an emergency basis. The women were “regulated” by the welfare system, but the men were often subject to the criminal justice system.[8]

Many mothers whose children were eligible for aid were, in fact, obliged to work. Low benefits, limited coverage and state work requirements—often invoked at cotton-picking time--forced some poor women to support themselves independently and others to supplement their meager grants with wages.[9] Although the Social Security Act did not exclude children on the basis of their parents' marital status or their race, states found ways to limit aid to black children born to unmarried women on the basis of their not providing “suitable” homes.[10]  Adults in the families so excluded also became dependent on the labor market and other non-governmental sources of income.

The present or past labor-market position of "welfare fathers"--not married to their children's mothers, divorced, separated or deserting and paying insufficient or no child support--is pertinent to any discussion of AFDC. Additionally, the former labor-market status of deceased parents determines whether and how well their dependents are covered by social insurance or whether they are consigned to the more demeaning and stingier public assistance programs. Finally, employment and earnings of both parents in a married-couple household are particularly critical, given the lack (until the recent growth of the Earned Income Tax Credit) of federal government support for poor families with two, able-bodied parents in the home.

The Missing Entitlement and Welfare Repeal

The labor market in which AFDC operated throughout nearly all of its history and the pervasive denial of the conditions that consistently afflicted millions of workers contributed mightily to its vulnerability. This was the case when mothers were considered nurturers and categorized as unemployable, and it became even more so when, with so many mothers in the workforce their role expectations changed. Evidence of changing expectations came as early as 1962 when John Kennedy recommended an increase in subsidized childcare asserting that "Many women now on assistance rolls could obtain jobs and become self-supporting if local day-care programs for their young children were available.…”[11]  JFK had reinforced this expectation by recommending grants to the states to aid in establishing local programs for day care of the children of working mothers. In five years, attempts to impose work requirements would begin.

Relief rolls expand in response to a number of factors, but chronic problems of unemployment, involuntary part-time employment, and low wages have to be counted among the factors that swelled AFDC caseloads. It is true that the great rise in the rolls in the 1960s was not a response to increased unemployment but to a combination of much greater numbers of eligible families claiming their “welfare rights” and liberalized eligibility determination. It was not a matter of increased need but of more of that need being met. Nonetheless, underemployment was widespread and documented in the nation’s ghettos during the sixties, low rates of official unemployment notwithstanding (see p. 12 and note 38). Growth in a program that does not directly benefit those who pay for it tends to cause resentment among taxpayers and to increase its political liability. High rates of unemployment among African Americans and Latinos made their families disproportionately dependent on AFDC and burdened the program with another source of unpopularity--racial and ethnic prejudice.

Unpopularity and resentment of welfare are aggravated if the structural roots of economic dependency are denied or downplayed and the individual factors magnified. Official unemployment rates that conceal all but the iceberg tip of actual joblessness shape public perception of a capacious labor market that can absorb all who merely make themselves available for work. Uncounted are those who are forced to work part-time, who become too discouraged to continue to look for a job, who are in prison, often for reasons related to unemployment, and who earn so little that their families are hungry without income supplements. Nor does the public recognize that increases in unemployment are often deliberate government policies undertaken to prevent inflation and that those who become unemployed and underemployed as a result of these policies are, in effect, sacrificed on the altar of price stability. With the problem all but denied, minimized, undercounted or misdiagnosed, those who suffer are seen as perpetrators—malingering rather than unfortunate. And public policy that forces them to work by restricting and ultimately denying them relief carries the name of reform rather than repression. The official denial of chronic underemployment and unemployment in the U. S. labor market carried heavy political consequences for its victims and their families.

Anyone who knows even a little about social movements will recognize that widespread denial of a problem deters efforts to remedy it. And public awareness—of the magnitude, severity, duration, and consequences of a problem—is a necessary step in building a movement to conquer it. That is one reason why continually deconstructing official unemployment rates to show how few of the unemployed and underemployed they count is an important movement-building technique.[12]

Except for wartime, the American labor market has been characterized by chronic unemployment and underemployment. Large-scale work programs were established to employ the jobless during the Great Depression but discontinued when World War II required a different kind of government employment. Washington created a smaller-scale but significant work program 30 years later but again abandoned it, this time when unemployment was increasing, not disappearing. And twice--in the forties and the seventies--full employment bills that started out with an entitlement to work were enacted only when such a guarantee was eliminated.

Unemployment has been relatively low in the late 1990s. Yet, in 1999, when the official unemployment rate averaged 4.2 percent, there were, in addition to the 5.9 million persons counted as unemployed, 3.4 million involuntary part-time workers, 4.2 million non-job seekers who wanted a job, and approximately 16.7 million full-time, year-round workers earning less the poverty level of a family of four—a total of 30.2 million unemployed or underemployed.[13] In 1998, when the national unemployment rate was 4.5 percent, 74 cities and 300 counties had rates of 9 percent or higher.[14] And according to the U. S. Department of Housing and Urban Development, one in six U. S. cities has chronically high unemployment rates despite the general decline in unemployment.[15] People of color have suffered disproportionately from labor market disadvantages, but it is important to recognize that the great majority of the unemployed always were—and still are—white.  Let us review the lost opportunities to sustain job creation and to enact a genuine entitlement to work.

Why Were New Deal Work Programs Limited and Temporary?

Federal relief administrator Harry Hopkins wanted a permanent work program because he believed that for years to come “there will remain … as the responsibility of government, a standing army of able-bodied workers who have no jobs.”[16] Hopkins expected WPA to be a permanent agency.[17] The architects of the Social Security Act, who were members of the Administration’s Committee on Economic Security and among Franklin Roosevelt’s closest advisors, recommended that public employment projects "be recognized as a permanent policy of the government and not merely as an emergency measure."[18] Their doubts were justified but their recommendations were unheeded. According to Secretary of Labor Frances Perkins, who headed the Committee on Economic Security, both Roosevelt and Hopkins “had the idea of a permanent work relief program, perhaps instead of Unemployment Insurance.” But it had not been written into the law, and, commenting in the mid-forties, Perkins pointed out that “unemployment insurance stands alone as the protection for people out of work.”[19]

Like Perkins, Arthur J. Altmeyer, chairman of the technical board of the Committee on Economic Security recalled that FDR wanted a worker who exhausted unemployment benefits and was still unemployed to be entitled automatically to a work relief job.[20] Yet, in alluding to a 1937 Senate Special Committee to Investigate Unemployment and Relief,  Altmeyer wrote that “it was recognized that the emergency work relief program known as the Works Progress Administration was not a permanent solution of the unemployment problem, and it was hoped that, with the continuing recovery from the Great Depression permanent solutions could be found.” However, with unemployment again rising in 1937, “the committee decided the time had not yet arrived when it would be feasible to replace existing emergency programs with permanent ones.”[21]

New Deal historian Irving Bernstein holds that “Throughout its history, both the President and the Congress considered WPA a ‘temporary’ if not ‘emergency’ agency, slated for oblivion as soon as severe unemployment disappeared.” This assessment, Bernstein points out, was reflected in one-year appropriations that made long-term planning by WPA impossible. However, since unemployment did not disappear and even grew worse during the recession of 1937-38, WPA survived until World War II, when joblessness did disappear for a time.[22]

Tracing the emergence of the idea of the right to work in the United States, Peter Bachrach held that Roosevelt "was never willing to ask for more than temporary appropriations designed to employ only a minority of those who were unemployed."[23] The New Deal historian, William Leuchtenburg writes that “by any standard, [WPA] …was an impressive achievement,” [but] it never came close to meeting Roosevelt’s goal of giving jobs to all who could work.”[24] Referring to all the work programs of the federal government, a monograph prepared by the Division of Research for the WPA said as much:

Since 1935 the total number given employment on various public work programs has ranged from a low of 2.3 million to a high of 4.6 million. Large as these figures are, at the peak they represented less than half of the number estimated as unemployed. Indeed, throughout this period these programs have averaged only between one-quarter and one-third of the estimated unemployed….[25]

In December 1940, for example, there were two million persons employed on WPA projects and three times that many-- six million unemployed men and women--searching for work.[26]

Roosevelt’s reluctance to employ more of the jobless, despite his stated preferences for work programs over relief, is believed to have stemmed from the costliness of work relief, his desire to balance the budget and opposition from business and conservative politicians who considered it competitive with private industry and drove up wage rates by paying relief workers too much.[27] There was also opposition in farm areas, particularly in the South, where planters complained that work relief made it impossible to get cheap farm labor.[28]

Conservative fears were first voiced against the truly innovative Civil Works Administration (CWA) which began late in 1933, employed four million people by January 1934 and was disbanded later that year.[29] Conservatives in the Administration and Congress persuaded Roosevelt that it was too costly and that it "was highly suggestive of the right to work."[30]   By this, they meant it might lead to pressure for a permanent and expanded work program--not only from the four million CWA workers, but also from millions of unemployed workers without government-created jobs. Roosevelt also felt CWA could create a permanent dependent class and that its continuance might imply that the country would be in a permanent depression.[31] Even though unemployment was 25 percent and CWA employed only about one-third of the jobless at wages well below the national average, business interests, particularly in the South and in construction, the type of work done by most CWA workers, accused CWA of providing too much job security, too high wages, and too lax a work environment.[32]

There is disagreement over why the longer-lasting WPA was terminated in 1943. While Edwin Armenta holds that Roosevelt ended WPA in order to appease conservatives who had made big gains in the 1942 congressional elections, Edward Berkowitz and Kim McQauid write that “Programs such as WPA … made little sense in an economy engaged in the mammoth public works project called World War II.”[33]  Similarly, Nancy Rose holds that “a shortage of labor for the time being ended the need for government programs in which people were put to work.”[34]

Temporary Full Employment

Perhaps convinced by wartime fiscal policies that full employment could be achieved and seeing the promise of jobs for all after the war as a vote getter, F.D.R called for an Economic Bill of Rights in his presidential campaign that began with the “right to a useful and remunerative job in the industries or shops or farms or mines in the nation.”[35] But despite the demonstrated benefits of wartime unemployment in the one to two percent range—less than half the rates that are presently considered low-- a determined opposition of agrarian and business interests defeated full employment in the post-war years. Among the many benefits of virtual full employment in the war years was a drop in ADC caseloads-- despite factors that would otherwise have caused the rolls to expand (more states signed on, benefits levels rose, etc.). Instead of adopting a policy of jobs for all, Congress passed an employment bill with no such guarantees.

Despite favorable public opinion, there was no mass movement for full employment strong enough to counter a determined minority that was able to exercise veto power in our divided national government. The memory of mass employment during the preceding decade could have contributed to political mobilization in favor of the full-employment bill, but a number of conditions and public policies reduced the size of the labor market and kept up consumption, thereby preventing the sudden swell of unemployment that would have triggered those memories and political action. Unemployment, though it increased, was held down by these conditions and public policies: accumulated savings from wartime prosperity, pent up demand from depression deprivation and wartime shortages, expulsion of women from the labor market, and control of the effects of demobilization through the G. I. Bill of Rights.

The following statement which appeared in a special edition of the New Republic makes it clear why economic elites opposed full employment and have continued to do so:

Our experience with periods of labor shortage indicates that its first effect is greatly to increase the bargaining power of labor, both individually and collectively. This results in steady improvement of wages and working conditions, up to the limit set by productive capacity. It means that employers must seek to make employment attractive, since the workers are no longer motivated by the fear of losing their jobs. A shift of workers from the less pleasant and remunerative occupations occurs, so that standards are raised at the lower levels….

The status of labor will improve, since employers can no longer rely upon the discipline of discharge to enforce authority. The tendency will be for labor to have more participation in industrial and economic policy.[36]

After the Korean War, unemployment rose and became increasingly serious for young workers and for black men and women whom discrimination shut out of the growth industry-- white collar work. The consequences of federal failure to provide work for the unemployed on a permanent basis, which had been masked during the two wars, became apparent to some economists and some members of the legislative and executive branches of government in the late fifties. Measures to aid the unemployed in “depressed areas” were advocated by liberal Democrats but vetoed by then President Dwight Eisenhower even though public opinion was in favor of the measures. The problem was neglected by both economic and social policies in the fifties.[37]

“Economic Opportunity” in the 1960s

Job strategy rejected.“Economic opportunity,” the watchword of the anti-poverty program, was not defined as employment opportunity. The chronic unemployment and underemployment of the urban ghettos—30 percent even when overall unemployment rates were dipping to 3.5 percent—were, in time, documented by Congress and the Department of Labor[38].  Despite the advocacy for job creation at the Cabinet level, notably labor secretary Willard Wirtz, LBJ, who had been the Texas administrator of the National Youth Administration, a New Deal employment program for young people,  resisted job creation because it was more costly and also because such a program might have lost the business support he sought for his anti-poverty program.

Political scientist Judith Russell, who studied archival materials extensively, considers this the decisive reason for the failure of the War on Poverty to pursue a jobs strategy: “the lack of a clear consensus among experts, early on, about the nature of unemployment and how it related to economic performance and the relationship of these two factors to poverty.”[39]  Russell’s account certainly shows disagreement between labor secretary Wirtz and Chairman of the Council of Economic Advisors Walter Heller, the latter favoring a tax cut to stimulate the economy rather than targeted job creation measures and the former believing that a macroeconomic stimulus was essential but that it would not solve the “hard core” unemployment central to poverty and characteristic of the ghetto.[40] Adam Yarmolinsky’s view, cited above, suggests that anti-poverty planners may have shared Heller’s faith in a tax cut and that they considered job creation important but too costly.[41] Russell also suggests two other reasons why policymakers eschewed substantial job creation: belief that the Labor Department was incapable of administering such a program effectively, and the government’s “halting and partial” commitment to the black struggle for full economic rights.[42]

Ironically, the anti-poverty program, which was supposed to provide a “hand-up” instead of a “handout,” stimulated a welfare explosion. Fearful of civil disorder, local agencies yielded to pressure from welfare recipients and their advocates, adding to the rolls eligible families who would  have been denied assistance in earlier decades. The War on Poverty, through its Community Action Program, came to focus on welfare rights, and advocacy for the poor was largely for income support instead of work. Indeed, welfare advocates were to continue this one-sided approach to economic justice until welfare repeal forced them to give more consideration to job creation.

Jobs for all was a stated goal of civil rights leaders. Indeed the slogan of the great civil rights march on Washington in August 1963 was “Jobs and Freedom.” Yet, full employment was not the issue over which the historic battles of the movement were fought. Freedom or civil rights came first. In this decade of great social movements there was no mass mobilization for full employment. Perhaps Martin Luther King was moving in that direction; he had begun to emphasize economic—as well as—civil rights. Very late in his life he wrote: “In our society it is murder psychologically to deprive a man [sic] of a job or an income.”[43] But the assassin’s bullet which hit him as he was about to stand in solidarity with striking garbagemen left that prospect in the realm of speculation. King’s untimely assassination stilled an important voice for jobs, just as Roosevelt’s death two decades earlier had robbed full employment of potentially its most effective advocate.

Welfare “reform.” Although federal funds helped fuel the welfare explosion, Congress tried to stem the expansion to which the War on Poverty had contributed.  With the 1967 amendments to the Social Security Act, a new, more illiberal Congress took aim at escalating relief rolls and illegitimacy rates through an attempted “freeze” on increased state AFDC costs attributable to desertion or illegitimacy, and it also began the thirty-year effort that culminated in stiff work requirements.  Chairman of the House Ways and Means Committee, Wilbur Mills, a conservative Southern Democrat, decried the failure of states to develop programs to stem the rising rolls and illegitimacy. “ If there are any jobs available for them [recipients], we want them to have them.[44]

The new policy, which initiated the Work Incentive Program (WIN), disqualified adults and out-of-school children from AFDC if they refused to accept employment or to participate in training programs without good cause. Indicative of the extent to which these policies were unnecessarily punitive is the fact that “voluntary requests for training under the Work Incentives [WIN] program exceeded the available supply, and compulsion became unnecessary.”[45]

Added to the work requirements were some work incentives. The 1967 amendments contained a work incentive that exceeded a 1962 rule that for the first time had allowed deductions for employment expenses: the first $30 of earnings, plus one-third of the remainder were to be discounted. The new Work Incentive (WIN) program would also fund some day care as well as placement, training and job creation.      

WIN was not a successful program, either in its initial, rather mild phase (WIN I), or in later stages (WIN II and III), when it placed less emphasis on training or job preparation and more on job placement. In fact, WIN was a loser. As interpreted by officials of the Department of Health, Education and Welfare, fathers in the AFDC program for unemployed parents, dropouts over sixteen, and a few mothers of school-age children who had access to free day care ever had to register for work under WIN I.[46]  The results of the first years of WIN were meager, indeed. Early in 1970, after about 19 months of implementation, WIN data took the shape of a funnel, narrowing with each step of the process from the number screened for possible referral to those who were actually employed after participating in WIN. At the wide end were 1.5 million screened and at the narrow, 22,000 employed, or less than 1.5 percent.[47] Considering that one-sixth of welfare recipients found employment without WIN, these results were not promising.[48] Welfare expert Gilbert Steiner points the finger at the limited number of child-care slots in determining major responsibility for these results, whereas manpower specialists Sar Levitan and Robert Taggart put the blame on the critical shortage of jobs for welfare mothers.[49] The findings of a study of WIN during 1973-1975 underscore the importance of job creation. Subsidized public employment was a particularly effective tool for increasing the employment and earnings of welfare recipients. But WIN had only modest success in increasing employment and earnings in the private sector.[50]

 Disappointed with the initial results of WIN, Congress passed the "Talmadge" amendments in 1971, requiring all recipients of working age, except women caring for children under age six, to register for WIN. Further, states that did not place 15 percent of those registered in jobs were to lose federal funds. In practice, this was more a threat than an enforceable requirement. "The principal reason,” according to an Urban Institute study, “is that there were always more AFDC recipients who wanted to avail themselves of the services offered by the work-registration program than there were funds available to finance these services."[51]  Calling attention to the "severe job shortage" and other factors that rendered most welfare mothers either unable to find work or unsuitable for it, social-welfare historian, William Trattner, writes, "Rather than pass legislation designed to deal with the causes of the problem or meet the needs of the poor, Congress strengthened the more coercive features of the Work Incentive Program...."[52]

According to the 1974 Manpower Report of the President, welfare recipients were usually offered unskilled labor or low-level clerical jobs, typically characterized by high turnover and low wages.[53] Unfortunately the conclusions of the Report were ignored by subsequent welfare “reformers”: “…research findings point to a paucity of jobs available to welfare recipients at a sufficiently high wage level to result in the removal of most family heads from the rolls.”[54]

Denial of labor market realities for relief recipients is an old story that continued  during the WIN program. Thus, nearly all employers in a survey of rural communities held that jobs were available for welfare recipients—despite the fact that only 2 percent of these employers actually had job openings for WIN participants.[55] Having reviewed the early history of WIN, Brookings Institution analyst Gilbert Steiner predicted that work training and day care would do little to reduce welfare recipients or relief costs. It would be more realistic, Steiner concluded, “to accept the need for more welfare and to reject continued fantasizing about day care and ‘workfare’ as miracle cures.”[56] Without serious efforts to create decent jobs for welfare mothers and fathers, Steiner's recommendation was both sensible and humane.

Realism about the labor market. At the end of the 1960s, two high-level commissions, both appointed by President Lyndon Johnson, acknowledged the paucity and inadequacy of jobs for less-educated and skilled Americans, particularly for African Americans. One of these recommended job creation; the other being charged with the problem of income maintenance rejected work requirements on the basis of an insufficient number of jobs. Such realism about the labor market went unheeded.

Appointed in July 1967 the National Advisory Commission on Civil Disorders, the euphemism for the severe riots that had broken out in one city after another, the National Advisory Commission on Civil Disorders, was charged by LBJ to "find the truth and express it in your report." Known as the Kerner Commission, after its Chairman, Otto Kerner, a Democrat and Governor of Illinois,[57] the Commission’s "Recommendations for National Action" began with employment: "Unemployment and underemployment are among the most persistent and serious grievances of our disadvantaged minorities. The pervasive effect of these conditions on the racial ghetto is inextricably linked to the problem of civil disorder."[58] In the "riot cities" the Commission found that "Negroes were three times as likely as whites to hold unskilled jobs, which are often part time or seasonal, and 'dead end'--a fact that's as significant for Negroes as unemployment."[59] Consequently, the Commission recommended: continued emphasis on national economic growth and job creation "so that there will be jobs available for those who are newly trained, without displacing those already employed"; consolidation of existing education, training, job development and recruiting programs to avoid duplication; and creation of two million jobs (one million in the public sector and one million in the private sector) in three years.[60]

This was just one of the recommendations of these commissions that was ignored. Unemployment rates which were 3.8 and 3.6 percent for all civilian workers in 1967 and 1968 when the Commission was studying the problem and making its recommendations, fell to 3.5 the following year but averaged 5.5 percent in the first three years of the seventies. For blacks, the rates averaged 6.8 percent in the last three years of the sixties and 9.2 percent in the first three of the next decade, and they climbed higher as the seventies progressed.[61]

Chaired by Ben W. Heineman, top executive of the Chicago and Northwestern Railroads, the Commission on Income Maintenance was appointed by President Johnson in January 1968 and directed to "examine any and every plan, however unconventional ...." [62] The Heineman Commission delivered its report, Poverty amid Plenty, in November 1969 and recommended: “the creation of a universal income supplement program financed and administered by the federal government, making cash payments to all members of the population with income needs"(their italics).[63] This was really a version of the guaranteed income or negative income tax approaches that were devised during the sixties and seventies.

Unlike subsequent welfare "reformers" the Commissioners considered work requirements coercive. "Since we do not have employment for all those who want to work, employment tests lose much of their meaning in the aggregate."[64] The Commission was convinced that "the poor are not unlike the nonpoor. Most of the poor want to work."[65] A systematic study of how poor people, especially black recipients of public welfare, feel about work was conducted at about that time and corroborated the Heineman Commission's views. This research for the Brookings Institution by Leonard Goodwin concluded that there are "no differences between poor and nonpoor when it comes to life goals and wanting to work."[66] Goodwin, however, found that failure in the workplace crushed the hopes of the poor. Thus, women terminated from the WIN program without jobs became more accepting of being on welfare and less inclined to try again.[67] The Commission, which, like the Kerner Commission, did its work at a time of very low, official unemployment, directly challenged the assumption that "everyone who is employable could work at adequate wages," pointing out that one-third of all persons in poor families in 1966 lived in families headed by full-time, employed male workers.[68] The Commission's proposed guarantee, then, would cover the poorly paid as well as those without income. Thoroughly opposite to stated public policy which was to prevent economic dependence, "the Commission ... concluded that there must be a larger role for cash grants in fighting poverty than we have acknowledged in the past." ^[69]

Reforming Work and Welfare in the Seventies

               Welfare reform, job creation and full employment were all on the national agenda in the 1970s, when the average unemployment  rate (6.2 percent) was the highest since the Great Depression. Yet, after a decade of debate and some legislative enactment, the legacy was rejected welfare reform[70], a national job creation program that again turned out to be temporary as well as too little, and a full employment law that was powerless to prevent the rise of unemployment from 6.1 percent in 1978 when the legislation was passed to the post-Depression high of 9.7 percent, four years later. An interim goal of four percent unemployment within four years was established by the Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978; instead the rate was over twice that amount (9.7 percent) in 1983. The only lasting reform in the 1970s is a subsidy for low-wage work that is designated a tax credit but is really a form of public assistance. The difference is that it doesn’t aid the jobless.

Welfare reform and work requirements. Presidents Richard Nixon and Jimmy Carter both proposed welfare “reforms” resembling the negative income tax or guaranteed income plans that were afloat at the time but differing from them in some important respects. Both the Nixon and Carter plans would have provided a basic federal income. In contrast to the various schemes for guaranteeing incomes, Nixon’s Family Assistance Plan (FAP) would have been confined to families with children, and it had work “requirements.” Carter’s Program for Better Jobs and Income (PBJI) included the whole population but had work expectations and different benefits depending on whether a member of the family was employed or not. Both guarantees were below the official poverty standard but considerably higher than allowances in low-benefit states.

Nixon distinguished his plan from a guaranteed income by insisting that it was "primarily ... an income supplement to reinforce work efforts and family stability of those who can work but are not able to provide adequately for their families."[71] This was in contrast to the proposal of the Heineman Commision, which considered it unfair to require work when jobs were not available. Yet, some experts have pointed out that FAP would have amounted to an income guarantee, for only one member of a family would lose benefits for refusal to comply with its work requirements.[72] It is signifiant that Moynihan who was a principal domestic advisor to Nixon at the time used the words, “guaranteed income,” in the title to his book on the FAP. The Administration's stated intention was to increase the self-sufficiency of employable recipients by providing more training opportunities and child-care services, but both were very inadequate in relation to the number of eligible mothers and children.[73] Observing that under FAP training would be geared to males, Jill Quadagno infers that the intent was for “federal policy … [to] reinstate black men as household heads by reducing the labor-force participation of black women.”[74] However, FAP’s adoption of work requirements for mothers, except those with children under six years of age, seems to be a move in the opposite direction.

Johnnie Tillmon, a leader of the National Welfare Rights Organization (NWRO), pointed out that FAP would deny poor mothers the choice of staying home with their school-age children or going to work.  Rather, they would be required to register for work, regardless of the availability of adequate child care and without designated labor standards for wages and working conditions.[75] NWRO also objected to very low benefits that would not aid its constituents, most of whom were from the higher-benefit Northern states.

Citing the conclusions of “many researchers and activists,” historian Linda Gordon holds that “many, perhaps most, ‘welfare mothers’ would like employment outside their homes.”[76] Yet, the goals to which the welfare rights movement dedicated its resources, did not reflect this preference. Indeed, Dona Hamilton and Charles Hamilton emphasize that NWRO’s position during the FAP debate was weakened by its failure to emphasize the critical issue of jobs: “A demand for jobs would have dispelled many of the myths and assumptions about welfare dependency …[and] would have exposed the hypocrisy involved in developing a mandated work policy for welfare recipients when it was clear that jobs were not available for all of them.”[77] What Hamilton and Hamilton say about NWRO could be applied as well to most welfare advocates at least since the 1960s-- until, handed a fait accompli  with TANF, they have begun, post PRWORA, to concern themselves with job creation.

Opposition to FAP came from many quarters, including many liberals who supported the NWRO in its campaign to “ZAP FAP” and Conservatives who opposed adding millions to the welfare rolls.[78] But powerful Southern legislators and ultimately lack of support from the President himself were the real spoilers. While it has been argued that low benefits were partly a function of southern states' limited fiscal capacities or low per capita incomes,[79] Southerners were no more friendly to higher benefits when Washington offered to pay the bill. It was the preservation of a low-wage labor force that mattered more. "There's not going to be anybody left to roll those wheelbarrows and press those shirts" complained Georgia Congressman Phil Landrum.[80] Governor Lester G. Maddox put it this way: "You're not going to be able to find anyone willing to work as maids or janitors or housekeepers if this bill goes through...."[81] "Many white Southerners," write Burke and Burke, "feared that FAP's guaranteed income would shrink the supply of cheap labor, bankrupt marginal industry, boost the cost of locally-produced goods and services, increase taxes, and put more blacks into public office."[82] Senate Finance Committee Chairman Russell Long-- of “black-brood-mares-of-AFDC” infamy-- was particularly concerned that the guarantee would pay people not to work, leaving them time to produce illegitimate children.[83]

Civil right groups consistently pointed out that FAP work requirements were unnecessary because welfare recipients wanted to work.[84] The final version of the FAP, HR 1, proposed a minimum wage for recipients that was considerably less than the statutory minimum and that would have been “tantamount to a differential wage for a large portion of the African-American population.”[85]

According to some observers, Nixon himself lost interest and certainly did not exert strong efforts to influence Senators.[86]  Nixon’s Chief of Staff, H. R. Haldeman attributes a more Machiavellian motive to the president in the first round of the FAP debate. According to Haldeman’s diary entry for July 13, 1970, Nixon “wants to be sure it’s killed by Democrats and that we make big play for it, but don’t let it pass, can’t afford it.”[87]

Introduced by Jimmy Carter nearly five years after the defeat of Nixon’s welfare “reform,” the Program for Better Jobs and Income (PBJI) was distinctive in two important respects: it combined income support and job creation in one program and recognized that it is unfair to expect people to work if there are insufficient jobs or workplace supports, especially child care. While PBJI combined aid for the employed and non-employed poor in a single program, it divided them into two groups, those expected to work and those not expected to work, with different treatment and income guarantees. Those expected to work would receive wage supplements, including an increase in the recently-enacted Earned Income Tax Credit (see below, pp.    ), federal help in finding employment, or one of 1.4 million special public service jobs offered through the CETA program (see below, pp.    ) and paying the higher of the federal or state minimum wage. In families with at least one child, these jobs were reserved for the "principal" earner, that is, the person with the highest earnings or the one who worked the most hours during the six months prior to application for job-search assistance.[88] However, analysis of the bill led to the conclusion that the number of new job slots created by PBJI were insufficient to accommodate both the unemployed and welfare recipients expected to work.[89]

Those "not expected to work" included the aged, disabled, blind, and single parents whose youngest child was under seven years. The adult in a single-parent family whose youngest child was seven to 14 years old was expected to work part-time. Thus, there was a limit to support for full-time nurturing. By combining SSI, AFDC, state-local general assistance, and food stamps in one cash program with a single eligibility standard, PBJI would streamline the income-support system. PBJI offered higher income guarantees to single mothers not expected to work than to families in which the adult was expected to work, but lower incentives to work, for if single mothers with young children worked, their incomes would be subjected to higher cumulative, marginal tax rates than families with a member expected to work.[90] After an unsuccessful, eight-week search for a private or public job, persons expected to work would be eligible for the higher guarantee.

Carter's proposals ran into the same kind of opposition that had defeated the similar Family Assistance Plan in 1972.  PBJI, too, would increase costs, expand the rolls, and raise questions of work incentive.[91] Perhaps the cost is one reason for Carter’s failure to support the plan vigorously, for he had been adamant about wanting a zero-cost reform.[92] Like FAP, PBJI ran up against the "veto coalition"--the South, business, and the Republican Party.[93] Of these, however, only the Southern legislators had been monolithic in their opposition to FAP

PBJI was regarded as patriarchal by some critics because, as NOW asserted, “the designation of ‘principal wage earner’ inevitably results in exclusion of the woman from priority consideration for job training and placement.”[94] Arguing that work requirements were unnecessary because people would work if decent jobs were available, NOW called for full employment or a job guarantee but also held that  “true welfare reform must include minimum federal benefit levels that respect the value of work done in the home by providing assistance at an adequate level.”[95] In this statement NOW supported employment for women and compensation for reproductive work, a policy that would permit mothers choice between the two types of work. While not consistent with women's equality, Carter's plan, in contrast to FAP, the several WINs and welfare "reform" in the 1990s, would not have forced mothers to work if there were insufficient jobs, training opportunities and adequate child care.

Although there was less interest in PBJI than in FAP, HEW Secretary Joseph Califano maintains that its prospects for enactment were promising until the passage, in June 1978, of California’s Proposition 13 to slash state property taxes.[96] As a result, Congressional leaders withdrew the legislation in order to avoid a humiliating defeat for the Administration.

Wage subsidies. A form of welfare reform was enacted in the 1970s, and it was championed by one of the fiercest foes of federalizing public assistance. Called an Earned Income Tax Credit, it is really financed and budgeted like a conventional income support program instead of like a tax expenditure.[97]

The working poor were among the main casualties of the defeat of FAP. Conservative Senator Russell Long, perhaps the most formidable Congressional obstacle to the FAP, maintained that he wanted to keep people from being taxed onto the welfare rolls.[98] Long's objection to a larger benefit for non-workers because it would make them unwilling to take menial jobs at low pay did not apply to supplementation of earned income. It would encourage just the opposite. With the EITC Senator Long and his fellow Southerners did not need to worry about whether maids would iron shirts and "boys" push wheelbarrows. Providing a work bonus was Long's aim. And it was the public, rather than the low-wage employers, who would foot the bill. EITC was supposed to increase the work incentive by "making work pay" or “to enlarge the supply of labor by increasing the relative attractiveness of work (versus welfare)."[99] The EITC may help to preserve some low-pay jobs. However, with the EITC public money is used to subsidize sweatshop and other marginal labor whereas job creation can pay for socially-desirable work—child care, elder care, home health care, etc.

The share of full-time, year-round workers who earned less than poverty-level wages (equivalent to less than $12, 195 per year in 1990) jumped 50 percent between 1974 and 1990.[100] The EITC cushioned the impact of this decline for many workers and their families and by intent also eased the burden of social security and Medicare payroll taxes.[101]

The EITC began modestly in 1975 with a maximum credit of $400 for families with annual adjusted gross incomes (AGI) up to $4,000. It became permanent in 1978, was indexed in 1986 during the Reagan era, substantially increased in 1989 under Bush and, in 1993, under Clinton. By 1999, the EITC provided a maximum credit of $3,816 for families with two or more children and benefited families with AGI up to $30, 580. Adjusted for inflation, the bonus is somewhat more than three times its 1975 value. By providing a substantially higher benefit for two or more children than for one, the 1989 legislation addressed family size, albeit to a limited extent. Six states had enacted earned income tax credits by 1992.[102] By 1998, nine states had enacted earned income tax credits that provide their residents with money in addition to the federal EITC.[103] For example, New York, which adopted a state EITC in 1994, adds 20 percent ($763) to the federal EITC, making a maximum, federal-state benefit of $4579 in 1999 for a family with two dependent children.[104]

The EITC, though means tested, escapes the meanness and the stigma usually associated with public assistance. Instead of applying to a public assistance agency or department, applicants claim credits from the Internal Revenue Service, an agency that interacts with the public generally, not only with the poor. Thus, the EITC has the appearance of universalism, despite its selectivity. This is one of the reasons why the proportion of eligible persons who actually claimed their benefits early in the 1990s was between 81 percent and 86 percent, compared to 62-72 percent for AFDC, and 54-66 percent for food stamps.[105] Yet, the EITC is no substitute for public assistance since persons who have no earnings are ineligible and those with very low incomes also get very low benefits.

The availability of the EITC may reduce incentives to raise the wages of low-paid workers, thereby contributing downward pressure on the entire wage structure. However, since nearly all claimants get their benefits in a lump sum,[106] they may remain aware of their paltry wages and of the need for a raise. There is little research to date on how recipients perceive and use the EITC, but one study based on a small sample of women in the welfare-to-work transition found that most of them could not make an explicit link between the EITC and work incentives.[107] Nonetheless, some recent academic research credits the EITC with the dramatic rise in labor force participation of single women with children since the mid-1980s.[108]

If the EITC does take pressure off the minimum wage, some analysts find this a desirable feature. They point to the possible job-destroying effects of increases in the minimum wage. These, however, have been seriously challenged by recent research.[109] It is also claimed that minimum-wage rises are not well-targeted to the poor, again a debatable point.[110] The EITC also has targeting limitations in that two-thirds of its benefits go to the nonpoor. While the very poor should remain a priority of public policy, it is important to keep in mind that the poverty standard itself underestimates poverty and that aiding individuals and families with incomes above the poverty line is an anti-poverty measure in all but the limited, official definition of the term.

The minimum wage was already declining in value when the EITC was enacted and sunk much lower during the years since then. Persons who worked, full time, year-round for the minimum wage earned 120 percent of the three-person poverty level in 1968; just over 100 percent in 1975; 70 percent in 1989, when the value of the minimum wage was the lowest since 1950; and 82 percent in 1998.[111] Interestingly, in 1998, the minimum wage, plus the EITC benefit for two children, was 111 percent of the three-person poverty standard, compared to these figures for the minimum wage alone: 120 percent in 1968 and 102 percent in 1975.[112] Rather than bettering the condition of low-income workers, the EITC has served to offset the decline in the minimum wage. Moreover, for families with a minimum-wage worker and more than two children or four or more persons in the family, the EITC does not even provide an escape from poverty—even as measured by a standard that has not been revised in over 30 years and that was paltry to begin with.

The EITC lifts millions of families out of poverty, indeed more than any other anti-poverty program. In 1996, 4.6 million people in low-income working families who would have been poor without the EITC were raised out of poverty.[113] Yet, poverty rates for families with children were 16.5 percent in 1996, when the 1993 increase in benefits was fully phased in, compared to 13.3 percent in 1975 when the EITC was enacted.[114]

Although one is loathe to gainsay a policy that puts more money in the hands of the needy, it seems more desirable for workers to earn an adequate wage than to depend on a government transfer.  When they do so, their total earned income is counted toward social security and unemployment insurance benefits whereas the part that consists of the EITC does not. Instead of employers paying the full price of the wage bill, the EITC has passed part of the cost onto taxpayers and government at a time when there is reluctance to spend on other programs, notably cash assistance for families with no earnings or housing subsidies for the poor.  Not surprisingly “leading business groups” called upon New York Governor George Pataki  to expand the state’s income tax credit. “Businesses,”observed the New York Times reporter, “likes the credit because it effectively raises the incomes of lower paid workers without any cost to their employers, easing the pressure to raise wages.”[115]

Public service employment. It took a recession and the return of high rates of unemployment for Washington to become directly involved in job-creation once again.  Increased in response to a subsequent, deeper recession, job-creation programs were eventually targeted to the hard-core unemployed and the disadvantaged instead of to the victims of countercyclical unemployment. But once again, government job creation was short-lived. This time it was fear of inflation rather than a substantial reduction of unemployment that accounted for the decline and repeal of employment programs. Indeed, unemployment was rising when job creation was cut back.

Public service employment, the major, job-creation measure of the 1970s, had small antecedents in the 1960s. Urban areas lacked the fiscal capacity to meet increasing demands for public service.[116] One approach to the shortage of jobs and public services was public service employment. Anti-poverty programs had begun to employ neighborhood workers in order to make services more responsive to the needs of low-income communities and clients.[117] Impressed with these services and concerned about job shortages for disadvantaged groups, Frank Riessman and Arthur Pearl recognized that the two needs—for public services and jobs—could be combined to create “new careers for the poor.”[118] Initially, Congress responded to this combination of unmet community and worker needs through modest additions to the Economic Opportunity Act, including a New Careers programs that trained some of the urban poor for existing public-service jobs. As noted, the Kerner Commission, which investigated the urban riots of the 1960s, called for the creation of one million jobs in the public sector as a solution to the endemic poverty of the urban ghettos.[119] Proponents of job-creation programs used the Kerner Commission recommendation to gain support for their programs.[120]

The Nixon administration was willing to deal with underemployment through income support but was quite opposed to government job creation until recession and politics forced its hand. Although Nixon vetoed a 1970 bill that included authorization of a small public-service-employment component, he signed the Emergency Employment Act (EEA) a year later, when recession, partly brought on by the Administration’s conservative economic policies, drove unemployment up to 5.9 percent and cost Republicans losses in the 1970 elections.[121] Serving only 3 percent of the unemployed (150,000 jobs)—far fewer than the number who lost their jobs due to Nixon Administration policies—the EEA was nonetheless important because it was the first general, public-employment program since the Depression and the first antirecessionary jobs program to emphasize public-service employment rather than public works.[122]

Although Nixon stopped supporting public employment after his reelection, he did, under the pressure of Watergate and in return for consolidation and decentralization of existing manpower and training programs, agree to a small jobs component in the Comprehensive Employment and Training Act (CETA) of 1973.[123] The severe recession of the middle 1970s, “provided liberals…with the leverage they needed over a conservative Republican president [Gerald Ford] to accept a measure he would otherwise have blocked.”[124]

CETA grew considerably under the Carter administration. Faced with the new stagflation, Carter’s economic advisers considered it more efficient to deal with unemployment through targeted job creation than macroeconomic stimuli that could heat up the economy and exacerbate inflation.[125] Under Carter CETA reached its zenith of 742,000 public service slots, up from 310,000 under Ford. Still, this represented only about 12 percent of the more than six million unemployed persons in 1978—a much smaller proportion of the unemployed than WPA served. In the first Carter fiscal year, the CETA budget increased by 70 percent, and the Public Service Employment (PSE) proportion of CETA funds grew to 60 percent, compared to 37 percent in 1975.[126] Nonetheless, CETA served a small proportion of the unemployed in a time of growing, mass unemployment. Indeed, with one hand the government gave a little through CETA job creation and with the other, it took more away through its restrictive fiscal and monetary policies.

In response to some real or alleged problems Congress made changes that crippled CETA. In its early phases there was a tendency toward “creaming” or giving jobs to the most employable applicants and toward substituting CETA workers for regular government employees, thus providing fiscal relief to localities. The amount of substitution is itself debatable because in an atmosphere of severe recession and state initiatives to limit taxes, CETA probably preserved services that would have been cut rather than substituted for them.[127] In late 1978, Congress addressed these problems by restricting eligibility in PSE to the hard-core jobless, keeping wages very low, limiting employment to the least skilled, and requiring prime sponsors (usually local governments) to spend more money on training. These changes were the political kiss of death for CETA. First, a program for the poor tends to be as unpopular and politically powerless as its clientele. Second, CETA’s strongest lobby, local governments, got less fiscal relief and consequently provided less political support.[128] Local government officials, who had been major supporters of CETA, were also less than enthusiastic about changes that centralized the program and limited their autonomy, such as strict monitoring by the federal authorities to reduce mismanagement and fraud.[129] Exaggerated, mismanagement and fraud, according to one expert, represented at most one percent of CETA jobs.[130]

The enthusiasm for jobs programs was short-lived. In addition to the consequences of serving a constituency with less political voice in its later years, CETA suffered from a very bad press that distorted its accomplishments.  Like WPA, which was also a favorite whipping boy, CETA was responsible for many useful services.[131] Reviewing CETA reauthorization hearings in 1978, Bullock reveals that hostile critics did not want to hear evidence contradicting their prejudices. Despite reams of studies and other evidence, one of the main influences on Congress was a negative Readers’ Digest article on a boondoggle.[132] Finally, as unemployment rates dropped from 8.5 percent in 1975 to 6.1 percent in 1978 and 5.8 percent in 1979, public concern shifted to rising inflation.

Willing for a few years to create jobs as a countercyclical measure during a period of high unemployment and eventually to target them to the hard-core unemployed, political leaders became less supportive of employment and training programs toward the end of the Carter administration.[133] Certainly, they had not accepted the reality of chronic unemployment and underemployment or the responsibility for permanent expansion of jobs. Indeed, a leader with deep ideological resistance to government job creation like Ronald Reagan terminated CETA when unemployment rates were climbing to their highest since the Depression and with virtually no public protest.

Toying with full employment. Higher unemployment served as an impetus, not only to employment and training programs, but to already-pending, full-employment proposals, including permanent government responsibility to create jobs for all those who want to work and are not absorbed by the private sector. Representative Augustus Hawkins, an influential member of the Black Congressional Caucus from the Watts district of Los Angeles and Chair of the House Education and Labor Committee’s Subcommittee on Equal Opportunities, was the guiding spirit behind the 1970s’ effort to guarantee jobs for all. Hawkins’ one-minute address to the House of Representatives, a week after he and Congressman Henry Reuss (D-WI) introduced the Equal Opportunity and Full Employment Bill, conveys his human-rights conception of full employment:

 Assuring full employment is the single most important step in the national interest at this time…. an authentic full employment policy rejects the narrow, statistical idea of full employment measured in terms of some tolerable level of unemployment—the percentage game—and adopts the more human and socially-meaningful concept of personal rights to an opportunity for useful employment at fair rates of compensation.[134]