Family-Friendly Europe

The belief that single motherhood is the preeminent
cause
of poverty in America has become a bipartisan cliché. The welfare reform
enacted in 1996 was designed, among other things, to discourage single parenthood
and to promote marriage. Yet a look at the experiences and policies of other
nations suggests a more complex story behind the causes of and cure for poverty.
Evidence from Europe shows that the remedy is to increase the economic resources
available to low-income families -- through better-paying jobs that relieve
poverty directly and social supports that reconcile paid employment with
reliable parenting.

U.S. women, men, and children experience significantly higher levels of
economic hardship than their counterparts in other affluent Western nations. For
example, a common cross-national measure of poverty considers households poor
when their family income falls below 50 percent of their country's median
income. By this measure, according to the Luxembourg Income Study (LIS), in the
mid-1990s more than 45 percent of U.S. single mothers were poor; by comparison,
single mothers' poverty rates were 13 percent in France and around 5 percent in
Sweden and Finland. Overall, U.S. women's poverty rates were 15 percent -- about 4
to 5 percentage points higher than those of Canadian, Australian, and British
women, 8 to 9 percentage points higher than in France or the Netherlands, and 12
to 13 percentage points higher than in Sweden and Finland.

Because single mothers have higher poverty rates compared with other women, a
higher percentage of single motherhood, all else being equal, would raise poverty
rates among women generally. Yet recent research using the LIS shows that even if
U.S. women had extremely low rates of single motherhood, their poverty rates
would still be higher than those of women in other affluent Western nations.
Marriage, therefore, is no panacea. Rather, the high poverty rate of U.S. women
is due to two main factors: the prevalence of poverty-wage jobs and the failure
of the government's welfare programs to pull its citizens out of poverty.

As the table on page 61 shows, compared with their Western counterparts, U.S.
women and single mothers are among the most likely to earn poverty-level wages.
When working full-time (at least 35 hours a week), about one-third of U.S. women
and more than 40 percent of U.S. single mothers earn wages too low to free their
families from poverty. In other Western nations, particularly Sweden, the
Netherlands, and the United Kingdom, working full time pulls the vast majority of
women (including single mothers) and their families above the poverty line.

Social Transfers and Employment Supports

But wages are only part of the story. In many countries, citizens receive
generous subsidies from the government to help pay the costs of raising children
and to protect workers from labor-market vicissitudes. The United States is
notorious for its paltry welfare state, which is by far the least effective
among industrialized democracies in reducing poverty rates. In the mid-1990s,
the U.S. system of social transfers and tax credits reduced women's poverty
rates by about 15 percent, while comparable welfare programs in other affluent
Western nations reduced women's poverty by anywhere from 40 percent (in Canada)
to 88 percent (in Sweden).

Although the Earned Income Tax Credit (EITC) is increasingly effective
in reducing poverty among low-income families in this country, total
social-assistance payments in the United States have decreased over time. The
main social-aid program for single parents, Temporary Assistance for Needy
Families (TANF), provides monthly payments that often fail to cover even the cost
of rent and utilities. In 2000 the majority of states provided maximum payments
between $50 and $150 per month for a family of three.

If the United States is to take seriously the task
of reducing
economic hardship among single-parent families, we must stop focusing on
marriage and instead rethink our existing labor-market and welfare-state
programs. Other affluent nations provide us with several viable alternatives.

The countries most successful in reducing poverty among single mothers
encourage them to pool income from a variety of sources. Examples of various
"policy packages" that accomplish this include employment supports, such as
child care, that provide single mothers with access to paid work; welfare
benefits, such as child allowances, that all parents receive; and cash and
near-cash subsidies. U.S. welfare policy gives lip service to the goal of
enabling mothers to work but often fails to provide the supports to do it
properly.

Employment supports like subsidized child care are essential in increasing
mothers' employment rates. Research by social scientists Janet Gornick, Marcia
Meyers, and Katherin Ross shows that countries with more-comprehensive child-care
and paid-leave programs significantly increase the employment of mothers with
young children. In Sweden and France, 80 percent to 95 percent of children ages
three to five are in publicly supported day care. In sharp contrast, only 14
percent of U.S. children in the same age group are in publicly subsidized child
care. The U.S. figure is more than 25 percentage points lower than any European
nation. The lack of affordable child care is an important reason why the majority
of U.S. mothers reduce their work hours after having children -- particularly
while their children are young. This difficulty in sustaining full-time
employment, in turn, contributes to their low income.

Paid-leave policies are also important in raising single mothers' income, for
two reasons: They provide a source of income for mothers caring for newborns and
they keep mothers attached to the labor force. Again, the United States is a
laggard. The U.S. Family and Medical Leave Act offers 12 weeks of unpaid
leave to women who work in companies with more than 50 employees. Other affluent
nations provide at least 12 weeks of paid leave, with most granting closer
to 20 weeks. Some nations, like Finland and Sweden, allow up to almost one year
of paid leave, at 80 percent to 90 percent of one's former wage rate.

Beyond Poverty Wages

In addition to making employment more accessible for mothers, other affluent
nations truly "make work pay." Among the stark differences between the United
States and other industrialized nations (particularly Scandinavian nations) are
the stronger presence of social-democratic parties and a much higher rate of
unionization in the latter countries -- two factors that foster more-egalitarian
wage structures than exist in the United States. (As the table indicates, the
wages of single mothers employed full time in other industrialized nations more
often prove sufficient to pull families out of poverty than they do in this
country.)

It should not be surprising, then, that Finnish and Swedish single mothers
have the highest employment rates and lowest poverty rates worldwide. Yet it is
not only employment that keeps their poverty rates low: Single mothers in these
nations receive benefits that other parents and workers get, such as child
allowances and guaranteed pensions later in life. They also receive child-support
payments from the government when absent fathers cannot or do not pay them.

Contrary to the warnings of opponents, there is no
evidence that
such policies per se increase out-of-wedlock births. For one, single motherhood
in the United States has grown in the past few decades, while social-assistance
payments to single mothers declined. So it seems that social assistance alone
does not increase single motherhood. In addition, European countries with the
most generous social programs for single mothers (such as the Netherlands) have
high rates of children growing up in families with two parents.

It is important to note that in some European countries with generous
welfare states, such as the Nordic countries and France, parents increasingly
cohabit as singles rather than get married. While such cohabiting relationships
are generally less stable than marriages, social scientists Lawrence Lu and
Barbara Wolfe note that the dissolution of such unions is much less common in
Europe than in the United States. So in the most generous welfare states found in
Northern Europe, most children grow up with two parents -- though many form
long-term cohabiting unions rather than marriages.

In addition, like all their fellow citizens, mothers in the most generous
European welfare states qualify for social assistance if their incomes fall
below a certain level. But according to Diane Sainsbury, an expert on
cross-national social policies for women, most single mothers in Sweden and
Finland support themselves via employment and universal social programs, so
there is little need for social-assistance programs explicitly targeted toward
them. When welfare states make it easier for mothers to combine parenting and
paid work, the vast majority of mothers also choose to work for pay.

Many U.S. social scientists who point to marriage's benefits for children also
acknowledge the importance of income and other social supports. In their book
Growing Up with a Single Parent: What Helps, What Hurts, Sara McLanahan
and Irwin Garfinkel show that, on average, children of single-parent households
do
indeed fare worse than children of two-parent households on a host of issues,
such as high-school and college dropout rates. But they add that single-parent
families typically have low income, which accounts for "a substantial portion" of
the differences between children of single- and two-parent families.

What Can the United States Learn?

Though the United States is not likely to adopt the employment and welfare
policies that exist in other nations, we could modify our government's current
social policy to substantially reduce economic disadvantage among single-mother
families.

First, single mothers need more access to subsidized or low-cost child care.
Low-income families spend as much as 35 percent of their incomes on child
care -- much more than higher-income families. In an article published in the
Prospect ["Support for Working
Families
," January 1-15, 2001], Janet
Gornick and Marcia Meyers suggest that if the United States were to spend the
same share of gross domestic product on subsidized child care and paid leave as
France does, we would need to increase expenditures by at most $85 billion
yearly. This seems a huge outlay, but it is only about 3 percent of President
George W. Bush's recently proposed $2.1 trillion budget for 2002 and far less
than the annual cost of his tax cut. States could also bear part of this cost:
Given the precipitous declines in welfare caseloads over the past few years, some
states have redirected leftover funds to child-care programs, and many more could
do so. Further, paid-leave policies are currently on the agenda in many states.

The fact remains, however, that increasing employment rates of single mothers
is not enough to ensure their families' escape from poverty. As President Bush
emphasized in his State of the Union Address, "good jobs" are essential. But
most single mothers in our country have bad jobs. According to a 2000 report by
the U.S. Department of Health and Human Services, the median income of people
leaving welfare is between $8,000 and $12,000 a year. Recent research by Pamela
Loprest of the Urban Institute shows that only 23 percent of those who leave
welfare have health care provided by their employer. [For a comprehensive
discussion of welfare reauthorization and suggestions for future policy
directions, including the EITC and child-support policies, see Jared Bernstein
and Mark Greenberg, "Reforming Welfare Reform," TAP, January 1-15, 2001.]
Clearly, low-income single mothers need better jobs.

Gornick's cross-national research on labor-market inequality finds that U.S.
women earn low wages largely because of the U.S. wage structure's inequality. She
suggests that employment policies that could help women are those that could help
all low-income workers: increases in minimum wages, higher rates of
unionization and other institutional wage-setting mechanisms, and increased
regulation of the international-trade policies that are pushing wages downward.
While opponents claim that wage increases will lead to job losses, the Economic
Policy Institute reports that neither the 1990-1991 nor the 1996-1997
minimum-wage increases resulted in significant job losses. Macroeconomic factors
were far more important influences on the unemployment rate.

Such policies are also attractive because they are universal: All parents or
all citizens could receive them. Politically, universal policies generate broad
constituencies rather than leaving the poor isolated, because voters generally
support policies that benefit them. However, this does not mean that we should
dismantle social-assistance programs targeted toward single mothers. A recent
study by the Urban Institute found that about one-third of mothers on welfare
have children with chronic health or developmental problems. It will be
difficult for many of these women to work outside the home, and low-income single mothers
should not be impoverished while tending to caregiving responsibilities in the
home.

Overall, we need policy packages that make it easier for all
parents to combine caregiving with employment -- or when employment is untenable,
that provide economic support for caregiving. Funding these policies would, of
course, require reallocating government taxing and spending, such as a rejection
of the tax-cut extensions recently enacted by the Bush camp (with the support of
some Democrats). But providing single mothers with policy packages that allow
more of them to be employed, and at better jobs, will reduce spending on
means-tested social assistance.

Most important, comprehensive policy packages for single mothers could
vastly reduce economic hardship among children. In the United States, growing up
in a single-parent family can significantly reduce children's life chances. But
experience in other industrialized nations shows that it doesn't have to be this
way. To advocate marriage as the panacea for low-income families' economic
problems is to avoid the real reasons why so many U.S. mothers and their children
are poor: bad jobs, an inequitable wage structure, and a shoddy welfare state. If
we truly want "no child left behind" in this country, we must back our political
rhetoric with policy packages that address the true sources of economic
disadvantage among single-parent families.

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