McClaughry: Poor no more, work first!

By John McClaughry

What society owes to the poor has been a recurring question in this country since colonial times. The modern, post-1935 consensus has fostered the creation of an ever-growing panoply of government programs promising to lift, push or draw people out of poverty and into an existence sufficiently life-sustaining and dignified to assuage the public conscience.

John McClaughry

John McClaughry is vice president of the Ethan Allen Institute.

Peter Cove is a veteran of 50 years of struggle to alleviate or diminish poverty. His 2017 book, “Poor No More: Rethinking Dependency and the War on Poverty,” is an eye opening account of anti-poverty programs over those years, and how most of them went sadly wrong.

It’s significant that Cove was a bona fide 1960s liberal. He frolicked with the hippie crowd at Woodstock, marched for civil rights, denounced the war in Vietnam, and enthusiastically supported President Johnson’s War on Poverty. He shared the anti-capitalism bias of that young generation, that most poor people were poor because “society” had made them victims, and that greedy for-profit businesses preyed upon consumers and especially the poor.

Cove now confesses, “Along with my colleagues on the left, I continued to think that income transfers, social services and a reliance on improving human capital were the most effective way to reduce the human pain of poverty.”

But Cove was clear-eyed enough to perceive that “the education and training programs we operated weren’t reducing the welfare rolls, and being reliant on government handouts was just as clearly not improving the quality of life of America’s poor.”

One important moment in the steady erosion of faith in the liberal welfare credo came when a New York City activist (later a congressman) led a mob into his project office demanding funding for their particular interest. Unlike nonviolent civil rights advocates, this mob, and many others like it, was “muscular and intimidating.” It dawned on Cove that the War on Poverty programs were actually “building blocks for bringing out the increasingly organized black vote.”

His startling discovery was that the demand for generous budgets for the multiplying anti-poverty programs was totally unconnected to the results expected or obtained. It was a political shakedown racket targeted at the guilty “establishment.” Few of its practitioners much cared whether poor people moved up into decent jobs in the large economy, so long as their power, patronage and paychecks were secure. Cove describes this as corruption, “a conspiracy to foreswear performance for political support.”

So Cove and his wife, Dr. Lee Bowes, rejected the liberal paradigm of improving the poor so they could better find work. Instead, they revived a contrary policy that generations of earlier Americans would have well understood: Work first, supplemented with education and training to improve the worker’s skills.

Their company, America Works, became the first for-profit business organized to help poor people climb out of poverty through immediate work. It contracted with governments to work with employers to place unemployed persons into real-world paying jobs.

Unlike the War on Poverty programs, America Works contracts are performance-based. If their client drops out of a job placement, America Works doesn’t get paid. So America Works stays with the new worker to help him or her overcome obstacles and improve work skills to advance up the income ladder.

Cove rightly hails the 1996 Gingrich-Clinton welfare reform law, which is firmly based on work. His preferred form of government support for workers climbing out of poverty is the Earned Income Tax Credit, which amplifies wages earned in real work.

Cove recognizes that the vast array of income-tested federal programs — welfare (TANF), food stamps (SNAP), Medicaid, Section 8 housing, LIHEAP, and loosely administered SSDI disability payments — creates a “benefits cliff” that can makes a $15 an hour job an economically bad deal. His solution is to convert most of those programs into one big EITC-type wage support. This idea, however, is not without its problems.

Anyone interested in helping poor people out of poverty will find this valuable and often entertaining book a gold mine of experience and creative reform.

Historically, the Vermont welfare bureaucracy has promoted “thinking about getting ready to work” programs, and has stoutly resisted meaningful sanctions for able-bodied people who want benefits but do not want to work. (Needless to say, it never contracted with America Works.) In 2013, a Cato Institute national survey ranked Vermont 47th in “work activity,” involving a mere 30 percent of its TANF cases.

With employers crying for workers — anybody, so long as they aren’t on drugs, reliably show up, and actually want to earn a paycheck — this would be a great time for Agency of Human Services to announce a “work first” requirement, as Cove recommends. That won’t happen, of course, unless a governor makes it happen, over the howls of the 1960s anti-business progressive left.

John McClaughry is vice president of the Ethan Allen Institute.

Images courtesy of Bruce Parker/TNR and John McClaughry
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9 thoughts on “McClaughry: Poor no more, work first!

  1. Lyndon Johnson scattered the spores for his “Great society” that have grown into the mycelium of the fungus that is today consuming America. Will a “monsanto” fungicide be what is required? And who can know the consequences of that? We’re way past nipping it all in the bud, if one might be permitted a conflation of analogies.

  2. Repealing the estate tax also hiders people from working.Should free money be generational?

    I don’t think so

  3. People wonder why Vermont has a hard time filling entry level jobs, it’s because the state of Vermont pays wages to able bodied citizens to do nothing.

  4. There should be a rating sheet regarding skills and physical ability to hold a job.
    There should be training programs to improve skills and physical ability to get better jobs.
    There should be vocational high schools with evening programs to teach skills and improve physical ability.
    All that should be financed and managed by the private sector, which would employ the people.
    Keep the government out of it, as it would triple the cost and standards would be watered down to increase dependency and vote getting.

  5. Thomas Sowell, Cornell University and UCLA economics professor, and Stanford University Hoover Institution senior fellow, reports in his 1999 missive, The Quest for Cosmic Justice, that ‘the poor’ are often defined as the bottom 20% of income distribution but that only 3 percent of those in that demographic at any point in time remain in the bottom 20 percent for more than 8 years.

    In other words, the American low-income demographic is a transient cohort. In fact, according to Sowell, more people who began in the low-income group reached the top 20 percent of income distribution after only eight years than remained there.

    None the less, politically correct progressives cite this 20 percent group as justification for such programs as increasing the minimum wage, increasing social welfare and subsidized housing stipends, even though the low income group is transient with individuals improving their own lot quite quickly without government assistance. If anything, increased low income subsidies seem to provide a disincentive to that group’s otherwise upward economic mobility. Go figure.

  6. What makes perfect sense to me is a time limit on the taxpayer handouts. I’m all for a safety net when needed but it should not be depended on for a lifetime, always at the expense of others. I don’t think the time limit should be a “one size fits all” and maybe it is nieve to think the applicant themselves should determine a time limit, allowing them to estimate when they can be independent again. It might even make sense to suggest awarding a one lump sum for their success if they beat their own estimated target goal of getting off the benefit early. If they are back one month later in the same situation, then they understand the lump sum awarded is then deducted from their future benefit.

  7. ” Poor no more, work first ” like this will ever happen in Vermont the home of Sanders
    Socialism…… Look what VT has become a haven for every low life that knows if you
    come here it’s free and easy, you ask and some bleeding heart will hand it out !!

    They don’t help they only hinder these people, they take away any self-esteem they
    have, if they have any !!

    Every able body person on the system and from what I have seen there are plenty
    that should be out earning a dollar, not living off the ” Socialist Government Tit ”
    for no reason ……………. shameful.

    Poor No More, it sounds good but it won’t work, because Liberals won’t let it happen
    and if you look a the makeup in Montpelier …………..that says it all.

  8. Another great aspect of rescinding welfare benefits and forcing the able bodied to seek employment is the level of self esteem they will enjoy. They will earn a sense of independence that they have never known. Paying ones way can be liberating.

  9. That all makes perfect sense to me. Now you just have to convince all the rest of the liberal/progressive establishment which will never happen in this State because they want the freebies to keep flowing.
    The more they take care of these people, it makes them look good and they know that they’ll get their support. Pretty sad really, yet we’ll keep paying out..

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