Myths That Explode Like Firecrackers : Welfare: The critics who say assistance creates more poverty have it dead wrong. Even their own facts don’t support that.

Conventional political discourse about American welfare policy and the plight of the poor is utterly beholden to popular myth. The promoters of these myths have played on the public’s legitimate concern that giving people money might well reward socially undesirable conduct while wasting huge amounts of public money. Indeed, they say, might not the attempt to reduce poverty by income transfers actually stimulate it?

This last worry deserves to be counted as Myth No. 1. Perhaps no error about the effects of welfare is more widespread than the belief that we are creating poverty by luring the poor through handouts into idleness or worse. Closely associated is Myth No. 2: that the provision of welfare to the poor also promotes a continuing cycle of illegitimacy and female-headed families, those with the highest risks of becoming or remaining poor.

The greatest contemporary popularizer of these errors is Charles Murray, whose widely discussed book, “Losing Ground,” provided theoretical justification for the Reagan Administration’s hostility to a generous poverty policy. But Murray and the other mythologizers are dead wrong. Murray’s own data undermine the argument that the poor make carefully reasoned economic decisions to seek public assistance. The major increases in the incidence of poverty during the decade that Murray studied most closely--the 1970s--took place while the real value of welfare payments was declining. According to Murrayite reasoning, the opposite should have occurred--as the real value of welfare benefits fell, we should have seen less poverty.

The same type of evidence casts doubt on the supposed relationship between poverty and illegitimacy. The rates of illegitimacy (and of single-parent households) have, without question, been going up steadily since World War II. Yet the data reveal no connection between this upward trend in illegitimacy and either big increases or declines in the availability of cash assistance to the poor. Moreover, the more generous states had no worse experience with increasing poverty and illegitimacy than did states that paid much less.

The truth about the relationship between welfare and poverty is more straightforward and less morally controversial than Americans have recently been led to believe: Welfare payments lift some families out of poverty who would otherwise be poor; and most families are poor because their breadwinners are unemployed, not because of the availability of welfare.

Following close behind the double myth that welfare payments cause poverty and illegitimacy is Myth No. 3--the belief that welfare is a large and growing portion of the public budget. In fact, what most people mean by “welfare,” the program of Aid to Families With Dependent Children, or AFDC, is a small and declining share of the federal budget. As of 1987, for example, AFDC represented a mere 0.36% of the gross national product and a modest 1.7% of total federal spending. Between 1970 and 1987, AFDC spending as a proportion of total federal spending declined by 61%.

Then where do we get the idea that welfare costs so much? Perhaps from the notion that whatever is so controversial must be a big program. Or perhaps a more realistic source for welfare’s supposed costliness is the tendency to lump together a variety of means-tested programs under the label “welfare.” And at least one of these programs--Medicaid, started in 1966--has grown remarkably. But Medicaid’s budgetary strain is largely a result of the growth in the cost of American medicine. While our generally profligate spending on medical care may ultimately make us all much poorer, few would seriously argue that providing the poor with medical benefits causes poverty or dysfunctional social behavior.

Finally, Myth No. 4: the belief that effective welfare reform can be achieved if we simply get tough with the poor and require them to work. This overlooks the reality that the AFDC has had a work requirement since 1967. The other major welfare “cash” program (Supplemental Security Income, or SSI), assists only people who, primarily for reasons of disability and age, are out of the work force. And low-income tax credits are available only to those who do work. Another difficulty is the notion that the poor can be required to work at jobs that do not exist or with skills they do not possess. This is supply-side thinking at its wishful worst.

It may be true that the most effective path out of poverty for the able-bodied poor is either to give them jobs or to train them for work. But neither Congress nor the state legislatures has ever been willing to fund anything like a guaranteed public employment program (save for a short period during the Great Depression). We also appear unwilling to accept the levels of inflation that usually accompany government efforts to stimulate the private economy to ensure “full employment.”

What then is the truth about welfare and poverty in the United States? First, the characters and causes of poverty are both varied and complex. Neither welfare nor any other single thing causes poverty, nor will any single thing (or perhaps any combination) wholly eliminate it. Second, America’s means-tested welfare programs lift some significant number of families out of poverty and cushion its effects for many others. It is also true that, given their meager size, current welfare programs do not and cannot eradicate income poverty in the United States.

Finally, the American political system is one in which any really substantial program for protecting any group against economic adversity can become acceptable and durable only by linking the fate of that group with all others in the economy and the society. It is America’s universal programs of social insurance that are both politically durable and socially acceptable. These “non-poverty” Social Security programs eliminate more poverty in the United States than all of the government’s anti-poverty efforts combined.

Next: Social Security--the expensive, popular, successful welfare program.