Family-Friendly Europe

Decent wages and generous social supports to reconcile work and parenting add up to a family policy that's smarter than marriage promotion.

by Karen Christopher

The American Prospect magazine, April 8, 2002

The belief that 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 S150 per month for a family of three.

IIf 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 childcare 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 :5 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 1z weeks of unpaid leave to women who work in companies with more than 50 employees. Other affluent nations provide at least 1: 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 go 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 pollicy 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.

KAREN CHRISTOPHER, an assistant professor of sociology at the University of Pittsburgh.

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