>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Welfare, Underclass, and Working Poor Continued....

Murray's warnings are not unexpected, he has been warning about the effects of a pernicious underclass since his famous Losing Ground was published in 1984. And, generally, good news about social trends is typically accompanied by the proverbial bad news because even the most favorable developments can have multiple consequences, some of which are adverse. For example, we delight to hear that our generation is living longer and bemoan the looming bankruptcy of old age pensions. In this sense the underclass as bad news is a non sequitur, not so much bad news as old news, which gains no currency from the positive trends related to employment, crime rates, welfare rolls, and illegitimacy rates. The underclass has been recognized since at least the mid-19th century, as reflected in Marx's observations on the lumpen-proletariat, "a recruiting ground for thieves and criminals of all kinds, living on the crumbs of society, people without a definite trade" and Charles Loring Brace's treatise on the "dangerous classes of New York." Most recently, the 20% waiver to the five-year-lifetime-limit imposed by the Temporary Assistance to Needy Families welfare reform is a tacit acknowledgment of a long-term, hard-core group of dependents with limited employment prospects. But the facts that teen-age pregnancies, out-of-wedlock birth, crime, unemployment and welfare rolls have substantially declined neither create nor exacerbate a growing underclass that might fray the moral and cultural fiber of society. No doubt the underclass continues to be a serious problem, but sounding an alarm about this group is the wrong button to push in response to the positive trends evident in recent years.

Yet, even with unemployment at its lowest level in 29 years and the welfare rolls shrinking rapidly, the dictum still holds that every silver lining has its cloud. The positive trends in welfare and employment have swelled the ranks of the working poor. This problem is not as sensational as a menacing underclass, but is potentially more destructive to the social fabric. The working poor are largely invisible, much more so than the underclass if the homeless and deinstitutionalized mentally ill are taken into account. The working poor would include most of the 42 million people without the security of coverage by private or public (Medicare and Medicaid) health insurance in 1996, about 15.6% of the population (up from 13.9% in 1990). They have a tenuous hold on the margins of economic independence and little prospect to accumulate assets and share in the American dream of home ownership.

Whether public opinion is rallied to address the plight of the underclass, whose problems resist conventional efforts at social engineering, or the predicament of the working poor, has significant implications for future directions of social policy. There is little evidence that social programs have had much success in changing the norms, attitudes, and behaviors of hard-core criminals, drug addicts, the homeless, and long-term welfare recipients. The dramatic decline in the welfare rolls is likely to have been concentrated among the estimated 30-50% of recipients who were already engaged in unreported work and those who would have been among the short-term recipients under normal circumstances. The problems of the working poor do not usually require intensive programs to change norms and behaviors. Measures such as extending health insurance coverage or Medicaid to low-income families, increasing the federal Earned Income Tax Credit and introducing state Earned Income Tax Credits, and revising the mortgage interest deductions to incorporate a refundable mortgage tax credit would do much to promote the security of the working poor. These are costly measures, but they do not involve the creation of new bureaucracies manned by trainers, counselors, therapists, and other change agents-the benefits go directly to the working poor. Of course, social policy can move on more than one front at the same time. However, if society cannot ensure a modicum of security and material well being for those who work and play by the rules, how can any policy be designed to bring the underclass into the mainstream?

Excerpted from Neil Gilbert (November/December 1999), "The Size and Influence of the Underclass: An Exaggerated View," Society.