Eurowelfare, Part 1: Security blanket for families

Eurowelfare, Part 1: Security blanket for families

Jean Hopfensperger / Staff Writer

PARIS, FRANCE -- Salia and Hamid Mechakov are the kind of people who, if they lived in the United States, would be subsisting in poverty or stuck "on the dole."

Hamid is a part-time supermarket clerk who hasn't had a steady job for months. Salia runs a small day care out of their modest apartment in the city of Lyon. They have three children to support -- but they're making it.

The reason: government family benefits. The Mechakovs, like all French parents, get a monthly "child allowance" to help buy food, clothes and other necessities for their three children. Their two daughters attend a free preschool so both parents can work. The family also gets health insurance.

And if they ever divorced, and Hamid were unable to pay child support, Salia would receive a minimum stipend from the government to raise her children.

This is how most of Europe "does welfare." It provides a series of benefits for families of all incomes (not just the poorest of the poor) that help defray the cost of child-rearing, make working low-wage jobs worth while, and help ensure the health and well-being of children.

"The idea is that all children should have the same rights, and those rights should be independent of the income of their parents," explained Elizabeth Lion of the French Ministry of Social Affairs and Health.

U.S. welfare system unique

The United States is the only major Western nation whose principal family welfare program is targeted at single mothers -- who eventually lose all benefits after they take a full-time job.

"Industrialized countries vary in their level of generosity toward families with children, but the U.S. is the least generous of all," said Elizabeth Duskin, chief social policy economist at the Organization for Economic Cooperation and Development (OECD), a Paris-based economic research organization.

"Outside of AFDC [Aid to Families with Dependent Children] . . . and modest tax preferences for families with dependent children, the United States has no explicit family policy or a family support system," Duskin said.

Critics of the European welfare programs point to their steep cost: Workers give up 40 percent to 50 percent of their paychecks in taxes (compared with about 34 percent in the United States).

But the high social spending in Europe is driven mainly by health care and pension benefits, just as it is in the United States. For example, child allowances, child care and paid maternity leaves consume less than 10 percent of social spending in most northern European nations, according to the OECD. Similarly, the main U.S. family safety nets -- AFDC, food stamps, nutrition Headstart, federal child-care grants and the Earned Income Tax Credit for poorer families -- account for about 7 percent of U.S. social spending, according to reports by the House Ways and Means Committee.

In any case, the notion of helping families who aren't destitute runs against the grain of U.S. social policy. The nation's powerful streak of individualism, and a distrust of big government and high taxes has made Washington wary of being generous with tax dollars. That's particularly true today, as the nation grapples with a huge budget deficit.

The sweeping proposals to cut welfare, housing and social programs -- now at an impasse in Congress -- have been fueled by the belief that social benefits discourage work, breed dependency and sometimes make matters worse -- by encouraging teen pregnancy, for example.

"I think it makes far more sense to try to institutionalize marriage than to manipulate the economy and social welfare programs," said Mitch Pearlstein, director of the Center of the American Experiment, a conservative think tank in Minneapolis. "Because what we've learned in the past decade is we don't do those things very well, in fact we make things worse."

But family and children's advocates say the United States is at a critical juncture.

"What happens over the next six months [with congressional budget cuts and presidential elections] will be critical for children and families in this country," said David Liederman, executive director of the Child Welfare League of America. "The question on the table is: Are we going to come into the 21st century with services for children and families that look more like our sister nations in the industrialized world, or more like services in less-developed nations?"

France's family benefits

The Mechakovs illustrate how family benefits play out in France, a country with an international reputation for children and family programs.

Each month the couple receives about $337 in "child allowances" -- a government payment made to all families with children. That money helps them buy food, clothes and other necessities.

They also get free medical care through a national health insurance plan. That includes the neighborhood health clinic two blocks away, where they take their kids for checkups and vaccinations.

As for child care, the couple's 5- and 6-year-old girls attend a government preschool a few blocks away called an école maternal. It's a free, mandatory preschool attended by virtually all French children.

Salia, who is from Algeria, says the preschool has helped her children assimilate into French culture and has prepared them for school. "The children love it," she said. "During the holidays they ask, 'Can we go to school?' "

When Mohammed, her youngest, was born, Salia took six months' maternity leave paid by the government.

This is how France supports families. Variations of these programs are offered to families in most European nations.

In the United States a similar family would likely end up on AFDC. If the parents found jobs, they would lose their public assistance check and health care either immediately or after a transition period -- even if they were working at near-poverty wages.

It's one of the reasons so many U.S. families fall back on public assistance after they leave it. It's also a reason that about 30 states, including Minnesota, have asked for federal waivers to let families earn more money while receiving welfare. Most of those families would qualify for one-year transitional Medicaid.

"In the United States, every family assistance program is small and qualified," said Olga Baudelot, a senior researcher at France's National Center of Pedological Research "You have a lot of programs, but they are always a piece of something. We have a national system that helps all families."

U.S. kids pay the price

International studies have shown that European-style family programs have helped shield lower-skilled families from poverty and have made working even low-wage jobs a viable option.

But the main U.S. family benefits -- AFDC, WIC, Headstart and Medicaid -- are targeted for families on welfare or the poorest of the poor. They don't prevent poverty; they help some people already living in it.

For example, the United States, France and Britain have a similar percentage of children who are poor based on wage income -- between 24 percent and 29 percent. But after receiving tax breaks and social benefits, only 5.7 percent of French children and 7.3 percent of British children are still poor, while 21 percent of U.S. children still live in poverty.

Many scholars point to other signs that U.S. families and children are lagging behind their European counterparts. According to research at Syracuse University and Columbia University in New York, the United States:

Has the highest child poverty rate of any major Western industrialized nation.

Has the widest gap between rich and poor families of any major Western industrialized nation.

Has the highest teen pregnancy rate of any major Western nation.

Has an infant mortality rate that is higher than 19 Western nations, including countries such as Spain and Greece, and a bigger percentage of babies born at low birth weights than 30 other nations.

"We're in trouble," said Timothy Smeeding, a Syracuse University professor who is the U.S. project director of the Luxembourg Income Study, a joint U.S.-European research project that has tracked poverty and income data for nearly 15 years.

"Our children at the bottom 10th percentile [in income] have less income than children in almost all other rich industrialized countries. The only other two countries of the 18 [studied that are worse off] are Israel and Ireland."

In addition, U.S. parents rely more on their wages and income to get their basic needs met, Smeeding said. For example, they buy their own health care, their own child care and often their post-high school education. "So we have low real incomes for people at the same time they have to spend more money on essential things," he said. "It's a double whammy."

Welfare for single moms

European nations, like the United States, have witnessed a boom in single parents and divorce. About 30 percent of America's children are born to unmarried mothers. That compares with about 50 percent in Sweden, 45 percent in Denmark, 33 percent in France and Britain, 18 percent in Germany, and 8 percent in Italy, according to statistics compiled by the office of U.S. Sen. Daniel Patrick Moynihan (D-New York).

However, single mothers in Europe are more likely to be living with the fathers of their children.

If they're not, the mothers can work without the fear of losing their health insurance, housing or monthly child allowances. Single mothers receiving welfare in the United States, however, will eventually lose their cash assistance and health care if they take a job.

France, for example, has an allocation de parent isole (single parent allowance), which is about $461 a month for a mother with one child, according to Barbara Bergmann, an economics professor at American University who is writing a book comparing French and U.S. family benefits.

The single mother in France can collect money only when her children are under 3. After that, the mother is expected to work because her child can attend a government preschool, Bergmann said. The exception is for mothers who are recently divorced; they can receive one year's benefit even if their children are older.

France also has a type of guaranteed minimum income, called revenu minimum d'insertion, designed originally for unemployed youth. About 25 percent of the recipients are single mothers no longer eligible for the single parent allowance; the majority are unemployed youth.

Likewise in Germany, about half the people receiving sozialhilfe (social help) are unemployed workers, said Ina Fohlmeister, a social researcher at the welfare office in the city of Cologne. There is no special welfare program for single mothers, she said.

Andrea Panthel, 23, is a single mother receiving sozialhilfe in the city of Cologne. She shares a cheery, three-room apartment with her 3-year-old son, Julian.

Panthel has been on welfare for three years. Last year she started working part-time at a kindergarten. The government deducts her wages from her welfare check. She plans to stay home part time with Julian until he enters school. Most German women do the same.

Under German welfare rules, she can continue getting sozialhilfe until the child is 7 -- at which point mothers are expected to work, Panthel said.

"If you refuse to work, they cut your welfare," she said. "And they stop giving you winter assistance." Winter assistance? It's one of the many benefits that mothers on welfare receive in Germany.

Panthel receives about $840 a month in benefits, including child allowances, education money and summer and winter assistance of about $350 to pay for seasonal clothes and supplies.

When told about the AFDC system in the United States, Panthel was incredulous: "How do you prepare you and your child for the future in such a situation? Everyone could see you are poor."

Few Americans realize that U.S. welfare benefits for single mothers are among the lowest in the Western world.

For example, a single mother with two children in the United States receives 27 percent of the median family income in cash or near-cash benefits, according to a study by Greg Duncan, a social policy professor at Northwestern University. But that same mother would receive 60 percent of the median income in Britain, between 47 percent and 67 percent of the median income in Germany, 61 percent in the Netherlands and between 18 and 54 percent of the median income in France -- depending on whether the mother is newly divorced or simply unmarried.

Do such generous benefits lead to dependency? The numbers are mixed, said Duncan. Twenty-six percent of German mothers, who receive generous benefits, stayed on welfare longer than three years. Britain also has generous benefits, but 84 percent of parents there stayed on welfare for more than three years. Meanwhile 36 percent of U.S. parents on welfare, who receive comparatively low benefits, stayed on longer than 3 years, according to a 1993 study by Duncan.

Implications for the U.S.

It's not the programs for single mothers that have caught the eye of so many children's advocates and scholars in the United States. It's the family benefits such as child care, guaranteed child support and maternal/infant health programs.

Dozens of major studies on America's children have concluded that such programs would help improve their health, education and well-being. In 1991, for example, the National Commission on Children -- a bipartisan commission that spent two years investigating the state of America's children -- issued a final report calling for a $1,000 refundable child tax credit for all children, a universal system of health insurance coverage for pregnant women and children, job training to help welfare mothers get work and Headstart available to all eligible children.

Those look a lot like the European system.

So why doesn't America adopt European-style benefits?

Cost is a big reason. The United States is much bigger than most European nations, and offering benefits to all families -- or even half of all families -- would demand a major financial commitment. France, for example, spent $229 billion on children's programs in 1991, compared with $146 billion in the United States, according to American University's Bergmann. Generous social spending is pinching the economies of many northern European nations.

To launch them nationally, Washington would have to shift spending from other programs, raise taxes, or overhaul the existing system and try to run it on a similar budget -- none of which is likely. The welfare revisions now stalled in Congress don't call for such a dramatic change, although they would give states the flexibility to experiment with new antipoverty strategies.

National ideology is another reason. Family programs enjoy the support of liberals and conservatives in countries such as France because they are viewed as contributing to the stability and future prosperity of the nation. But they are considered excessive to many Americans.

"There are people who would look at Europe's programs and say they have an impact on personal responsibility and initiative," said John Petraborg, deputy commissioner of the Minnesota Department of Human Services. "There is a concern that they foster a reliance on government to solve problems for us."

Taken as a whole, Europe's social safety net may do that, said Petraborg. But many of the programs have merit and need to be evaluated individually, he said.

And race is an issue. European nations are more racially and culturally homogenous than the United States, although that is slowly changing. Benefits that helped families there were not viewed as disproportionately helping immigrants or people of different races -- as they've been viewed in the United States. They therefore enjoyed broad political support.

In recent years, however, countries such as France have found racial issues coloring the national debate. For example, the ultra-conservative French National Front is calling for banning child allowances to immigrant families. The Front, however, is virtually the only group in France calling for an end to child allowances for immigrants, said Jean Francois Lacronique, social affairs counselor at the French Embassy in Washington.

Nonetheless, European-style family benefits have been creeping into communities across America. No one is predicting a wholesale transfer of programs, but many of the broad strategies make sense for the United States too, say scholars and social policy officials.

Said Petraborg: "We are looking at things in Minnesota that bridge the two strategies of universal benefits common in Europe and the means-tested programs common here."

Joey McLeister
Toddlers get their first painting lessons at the Creche des Halles in Paris, one of hundreds of subsidized infant center in France. The centers, plus free public nursery schools for all children 3 and older, are ways the French help parents work and give children quality care.