But, says Sherraden, "there are political and cultural barriers to allowing people to receive money while they're also receiving public assistance." He notes that total welfare spending on the poor, including Medicaid, accounts for about 10% of federal expenditures. "Not that I don't think welfare is a big mess, but it's not a big budget problem. The problem is entitlements to the middle class." Federal payments and subsidies to the nonpoor amounted to $651 billion in fiscal year 1990, more than five times what was paid out to the poor. Adds Sherraden, "The major problem with welfare is not that it creates dependence but that it doesn't promote development." In sum, we may spend on the poor, but we don't invest in them.
One woman who does work and is on welfare is a woman I'll call Renee Gonzales. The pseudonym is necessary because revealing her true identity would threaten her welfare benefits.
In the abstract -- a single mother with three children -- Gonzales is a typical welfare recipient. In the flesh and in spirit, she seems anything but. Alert and combative, Gonzales is in the process of digging herself out from a lifetime of deprivation, having recently completed her second year of college while starting a small business on the side. Welfare, she says, is a state that envelops and owns you because it becomes the norm. "If you grow up on welfare, there's no shame there. Everybody you know is on welfare. Once you're on welfare, you're hooked. It's a trap, and there's nothing you can do to escape except gnaw your foot off."
Gonzales, now age 20, has been on her own most of her life. Her father developed schizophrenia when she young, and the burden of raising a family alone overwhelmed her mother, a factory worker. Gonzales was put in a foster home at the age of eight.
Gonzales, like many welfare recipients, has been reduced to working the system to keep body, soul, and family together. She receives $314 in public assistance every two weeks. That buys groceries. She pays $250 a month in rent and $80 a month in day care. Her business selling clothing and accessories, which she started with a $200 loan, operates marginally. She would like to move it out of her apartment and into a storefront, but if she starts making more than $150 a week, she loses her medical benefits. She receives child support under the table from her former boyfriend, the father of her three children. "If I received that aboveboard, they would cut my welfare check." When Gonzales goes for her case review, she tells her caseworker that she doesn't know where her boyfriend is. "If you're honest, you hurt yourself."
The impression Gonzales leaves is of a person alternately defiant and self-conscious. "What do you think of when you think of the typical welfare person?" she asks. "A single mother with children, right? Do I look like a person on welfare?" Every day, she says, amounts to a trial in which she has to face "ignorant people who don't know what I've been through." Their ignorance only fires her determination. "I just look at them and say, 'You laugh now, but someday you'll still be here drinking your cheap wine, and I'll never see you again."
* * *
The Economics of Inclusion
'Victims Make Bad Entrepreneurs'
In times of economic change, people scramble all the more to protect what they have. They feel vulnerable, abandoned by traditional allies. The government today no longer delivers services in a cost-efficient manner. Its regulations seem increasingly arbitrary and onerous. The public education system once provided a vital point of entry into the American economy, the American experience. Today it spits out many "students" hardly prepared for the baffling world into which they emerge. Special interests preach the free-market gospel but then jockey for market protection and special favors at the expense of the less powerful.
As the economy has grown more complex, it has also grown more Darwinian. The highly skilled prosper. The skilled survive. The unskilled fall prey to change. The solution is not to penalize the successful but to include the heretofore excluded -- those with the potential to succeed who have simply never had access to the right levers.
When Bob Friedman, chairman of the Corporation for Enterprise Development, an economic-development and policy-research organization based in Washington, D.C., appraises the welfare system, he sees a "massive economic and social mistake that assumes that poor people have no talent and no capacity for vision."
Steve Mariotti sees government regulations and the tax code as amounting to nothing less than a violation of the fundamental civil rights of many inner-city residents.
People like Friedman and Mariotti concur that change must begin at the bottom of the economy because it has not come from the top. It must begin with people like Leroy Jones, Shanta Nurullah, and Renee Gonzales, who have defied the odds while understanding, as Friedman puts it, "that victims don't make good entrepreneurs."
But many people at the bottom of the ladder will continue to have a hard time becoming entrepreneurs unless institutional changes afford them better access to the economy. Right now too many people are lost, wandering through a labyrinth in which they are trapped.
And for that, we are all the poorer.
