    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

            LESSONS LEARNED FROM WELFARE REFORMS IN OTHER COUNTRIES

    =======================================================================

                                    HEARING

                                   before the

                        SUBCOMMITTEE ON HUMAN RESOURCES

                                     of the

                          COMMITTEE ON WAYS AND MEANS
                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               NOVEMBER 17, 2015

                                   __________

                              SERIAL NO. 114-HR08

                                   __________

             Printed for the use of the Committee on Ways and Means

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                          COMMITTEE ON WAYS AND MEANS

                          KEVIN BRADY, Texas, Chairman

    SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
    DEVIN NUNES, California              CHARLES B. RANGEL, New York
    PATRICK J. TIBERI, Ohio              JIM MCDERMOTT, Washington
    DAVID G. REICHERT, Washington        JOHN LEWIS, Georgia
    CHARLES W. BOUSTANY, JR., Louisiana  RICHARD E. NEAL, Massachusetts
    PETER J. ROSKAM, Illinois            XAVIER BECERRA, California
    TOM PRICE, Georgia                   LLOYD DOGGETT, Texas
    VERN BUCHANAN, Florida               MIKE THOMPSON, California
    ADRIAN SMITH, Nebraska               JOHN B. LARSON, Connecticut
    LYNN JENKINS, Kansas                 EARL BLUMENAUER, Oregon
    ERIK PAULSEN, Minnesota              RON KIND, Wisconsin
    KENNY MARCHANT, Texas                BILL PASCRELL, JR., New Jersey
    DIANE BLACK, Tennessee               JOSEPH CROWLEY, New York
    TOM REED, New York                   DANNY DAVIS, Illinois
    TODD YOUNG, Indiana                  LINDA SANCHEZ, California
    MIKE KELLY, Pennsylvania
    JIM RENACCI, Ohio
    PAT MEEHAN, Pennsylvania
    KRISTI NOEM, South Dakota
    GEORGE HOLDING, North Carolina
    JASON SMITH, Missouri
    ROBERT J. DOLD, Illinois
    TOM RICE, South Carolina

                         David Stewart, Staff Director

             Janice Mays, Minority Chief Counsel and Staff Director

                                     ______

                        SUBCOMMITTEE ON HUMAN RESOURCES

                 CHARLES W. BOUSTANY, JR., Louisiana, Chairman

    TODD YOUNG, Indiana                  LLOYD DOGGETT, Texas
    KRISTI NOEM, South Dakota            JOHN LEWIS, Georgia
    PAT MEEHAN, Pennsylvania             JOSEPH CROWLEY, New York
    GEORGE HOLDING, North Carolina       DANNY DAVIS, Illinois
    JASON SMITH, Missouri
    ROBERT J. DOLD, Illinois

                                C O N T E N T S

                                   __________
                                                                       Page

    Advisory of November 17, 2015 announcing the hearing.............     2

                                   WITNESSES

    Douglas Besharov, Professor, School of Public Policy, University
      of Maryland....................................................     5
    Melissa Boteach, Vice President, Poverty to Prosperity Program,
      Center for American Progress...................................    27
    Richard Burkhauser, Sarah Gibson Blanding Professor of Policy
      Analysis, Cornell University College of Human Ecology..........    42

            LESSONS LEARNED FROM WELFARE REFORMS IN OTHER COUNTRIES

                                  ----------

                           TUESDAY, NOVEMBER 17, 2015

                 U.S. House of Representatives,
                           Committee on Ways and Means,
                               Subcommittee on Human Resources,
                                                        Washington, DC.

        The Subcommittee met, pursuant to call, at 2:03 p.m., in
    Room 1100, Longworth House Office Building, the Honorable
    Charles Boustany [Chairman of the Subcommittee] presiding.
        [The advisory of the hearing follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman BOUSTANY. Good afternoon, everyone. Welcome to
    this hearing. This hearing is the final hearing in a series we
    began earlier this year on how we can move America's families
    forward. In February of this year, I announced that the
    subcommittee would undertake a top-to-bottom review of our
    Nation's safety net in how welfare policies can better support
    work, strengthen families, help individuals escape poverty, and
    move up the economic ladder.
        In the months since, we have held hearings on using
    evidence to fund what works, reforming Temporary Assistance for
    Needy Families to make it more successful, and protecting
    taxpayers from fraud and waste. We have held our first joint
    hearing in at least 20 years with our colleagues on the
    Agriculture Committee to discuss how programs can better reward
    work. We reviewed the complicated array of programs designed to
    help people in need, highlighting how this maze makes the
    welfare system confusing for States to operate, and frustrating
    for families to navigate. But most importantly, we have
    actually heard from real people, those who are experiencing our
    safety net programs firsthand to find out what they really need
    to find work, to escape poverty, and hopefully move up the
    economic ladder.
        In the mid-1990s, this subcommittee was instrumental in
    developing and passing legislation to reduce welfare dependence
    by supporting and encouraging work. The resulting 1996 welfare
    reforms, passed by a Republican Congress and signed by a
    Democratic President, brought about major changes in how the
    Federal programs assisted those in need. As a result of those
    reforms, the number of people receiving welfare declined
    significantly, employment rates rose for those most likely to
    be in poverty, and the percentage of children living in poverty
    fell as well.
        Other countries took note of these changes and many began
    experimenting with ways they could reform their systems as well
    to help more people move off of welfare and into work. While
    welfare reform in the United States spurred other countries to
    undertake their own reforms, in many cases other countries have
    now gone well beyond the reforms we have made in the 1990s.
        For example, other countries have implemented policies such
    as requiring work or work preparation in exchange for benefits
    in multiple programs, revising eligibility standards to target
    benefits to those most in need, consolidating and coordinating
    programs to simplify their systems, working with
    nongovernmental groups to deliver key benefits and services,
    and holding programs accountable for achieving real outcomes.
        Today's hearing will highlight specific changes other
    countries have made to modernize their safety net so more
    people get the help they need to get back on their feet. We
    will also hear how the lessons learned in other countries can
    help us develop ideas to further reform the welfare system here
    in the U.S.
        So we certainly welcome our guests, our distinguished panel
    today, and look forward to their testimony.
        At this time, I would like to yield to Mr. Davis for the
    purpose of an opening statement.
        Mr. DAVIS. Thank you very much, Mr. Chairman. And I welcome
    this hearing, and I certainly want to thank our witnesses for
    being here with us this afternoon.
        While there may be some promise in welfare, the work
    experiments going on around the world, our experiences offer a
    cautionary tale about declaring victory too soon. In the
    Temporary Assistance for Needy Families program, called TANF,
    for example, after an early burst of innovation and investment,
    States began to burden their welfare block grants to fill State
    budget holes instead of investing in work and getting families
    out of poverty.
        In 2014, only 8 percent of TANF funds were used for work
    activities, and less than half supported its full purpose. TANF
    continues to measure caseload reduction but didn't hold States
    accountable for employment outcomes. As a result, more than
    three-fourths of families in poverty got no help at all from
    TANF. A recent study found that as many as 3 million American
    children live on less than $2 a day. There are lessons we can
    learn from other countries, and I hope my Republican colleagues
    will work with us to implement them. For example, Great Britain
    set a goal for cutting child poverty in half, and then they
    changed their public policies to meet that goal. My Child
    Poverty Reduction Act would allow us to follow their good
    example.
        We can also learn a lot from other nations about public
    policies that support work. The United States is the only
    developed country that provides zero weeks of paid, parental
    leave. Just this year, our committee failed to even take up the
    Family and Medical Insurance Leave Act when it was referred to
    us. The United States ranks close to dead last in terms of
    investment in child welfare. As a percent of GDP, Denmark
    invests seven times more than we do in quality child care. The
    Netherlands, five times more; Great Britain, four times more.
        Last year, Republicans have blocked the funding needed to
    make quality child care available to working families, leaving
    millions of families on waiting lists instead of at work.
        We know health care is a key work support, one that is
    guaranteed around the world. But despite all advances the
    Affordable Care Act brought, Republican governors in 19 States
    are blocking health care for millions, and Republicans in
    Congress have voted 61 times to undermine or repeal the ACA.
    Democrats are serious about the work that lifts families out of
    poverty. That means building on successes like our earned-
    income tax credit, and it means providing real support to
    working parents as they try to make a better life for their
    families.
        So we welcome this hearing. Thank you very much, Mr.
    Chairman, and I yield back.
        Chairman BOUSTANY. Thank you, Mr. Davis.
        At this time, I would like to welcome the newest member of
    our committee, the Ways and Means Committee, the gentleman from
    South Carolina, Mr. Rice. Tom, welcome. Glad to have you on the
    committee. I know we will work out subcommittee assignments,
    but we certainly welcome you here today.
        Without objection, each member will have the opportunity to
    submit a written statement and have it included in the record.
    At this point, I would like to remind our witnesses to limit
    your oral statements to 5 minutes to keep us on time here with
    the--but your full written testimony will be made part of the
    record.
        Chairman BOUSTANY. On the panel today, we have three very
    distinguished witnesses. We have Douglas Besharov, the Norman
    and Florence Brody Professor at the School of Public Policy,
    University of Maryland. Welcome. Melissa Boteach, vice
    president of the Poverty to Prosperity Program, Center for
    American Progress. Welcome. And Richard Burkhauser, Sarah
    Gibson Blanding Professor of Policy Analysis, Cornell
    University College of Human Ecology.
        We welcome all three of you.
        And, Mr. Besharov, thank you. You may begin your testimony.
    Please turn your microphone on.

      STATEMENT OF DOUGLAS BESHAROV, PROFESSOR, SCHOOL OF PUBLIC
                     POLICY, UNIVERSITY OF MARYLAND

        Mr. BESHAROV. There we are. Sorry about that.
        Thank you very much for having me. This is an important
    topic, because I think there is a great deal to learn from
    other countries. It is a tricky process, because some people
    like this part of a program, some people like that part of a
    program, and to get a fuller picture is extremely difficult,
    especially in 5 minutes. So I am going to pick one topic, and I
    am going to do what my wife suggested, which is no numbers.
        I think you have heard that although unemployment is down,
    labor-force participation in all its ways is also down. It is a
    process that started long before the recession. In fact, for
    African-American men and for low-skilled white men it started
    in the 1970s. It is partially a function of our safety net, and
    the question is, what we do about it as the numbers get larger.
        The Europeans face a similar situation. They have a much
    more generous safety net, or at least they did until recently.
    Unemployment benefits were for 5 years in some countries, in
    some countries unlimited. And what they found was,
    unfortunately, human nature being what it is, the temptation of
    unlimited unemployment benefits was a great attraction, even
    for the most productive members of our society. So starting
    about 15 years ago, they systematically started changing their
    social welfare system.
        Now, as Melissa is going to point out, there is a little
    bit of a difference here, because their systems start more
    generously than ours do. But I think that is part of the lesson
    here, which is, you can't make our system more generous without
    addressing its negative effects on labor-force participation.
    It is a little bit like the immigration problem, do we close
    the borders first and then go to legalization and citizenship?
    Do we do them both at the same time? And that is for the
    politicians. What the Europeans had was a system of very
    generous benefits and decreasing labor force participation. So
    in my testimony--and I have a picture, nice little chart, with
    all the countries that do it--they have basically done three
    things: Number one, they have synchronized benefits. And this
    is both a left and a right issue.
        In our country, someone runs out of unemployment benefits
    and it is a second step and often a different step to get on
    TANF. It is a second step and often a different step to get on
    food stamps and so forth. So what they are doing in return for
    limiting unemployment benefits, is making it easier to get on
    the equivalent welfare, and in welfare, imposing work
    requirements, what we call work requirements.
        The second thing they are doing--so that is
    synchronization. The second thing they are doing is imposing
    across almost all of their programs, and you can see the
    countries that are doing it. France is actually close to doing
    it already, and that is mandating some kind of work-related
    activity in return for benefits.
        The third thing they are doing is they are giving greater
    authority to localities, and they are allowing a greater use of
    private contractors. It is quite striking. I was in England
    when labor--when the government was labor, and labor was part
    of the process of contracting out to nonlabor--nonunion
    activities.
        So three things: Synchronizing benefits, mandating some
    kind of work, and devolving authority. Each one extremely
    difficult in this country, I want to say, so please don't hear
    me saying this is a piece of cake. The worst problem, I think,
    is the committee structure of the Congress, I am afraid to say.
    I was so glad, Mr. Chairman, that you mentioned a joint hearing
    with Agriculture. My own view of SNAP is not where our major
    welfare program--I have a chart in my testimony that shows how
    SNAP recipiency is way up. That is our major welfare program.
    If it is not coordinated with TANF, we will never make any
    progress in my opinion.
        In terms of the ability to devolve, we are a Federal
    system. We don't exactly trust the States. Sometimes the
    States, whether led by Republicans or Democrats, are very good
    at milking the Federal Government for whatever they can, and I
    think that is a reality as well.
        However--and I have 9 seconds. However, I think this points
    to the direction we have to take; synchronize benefits, mandate
    work, and devolve authority. There are loads of lessons in this
    country as well as abroad on how to do that.
        Chairman BOUSTANY. Well, thank you.
        [The prepared statement of Mr. Besharov follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman BOUSTANY. Ms. Boteach, you may proceed.

       STATEMENT OF MELISSA BOTEACH, VICE PRESIDENT, POVERTY TO
            PROSPERITY PROGRAM, CENTER FOR AMERICAN PROGRESS

        Ms. BOTEACH. Thank you, Chairman Boustany, Congressman
    Davis, and Members of the Subcommittee for the invitation to
    appear before you today. My name is Melissa Boteach, and I am
    the vice president of the Poverty to Prosperity Program at the
    Center for American Progress.
        As I am sure we can all agree, the surest pathway out of
    poverty is a good job. Unfortunately, over the past four
    decades the gains from rising profits and productivity have
    gone mainly to those at the top of the income ladder, while
    low- and middle-income Americans have seen their wages stagnate
    or decline. Even in good economic times, events such as job
    loss, disability, or birth of a child are common triggers of a
    spell of poverty or hardship. In fact, four in five Americans
    will experience at least one year of significant economic
    insecurity during their working years.
        Economic inequality and family income shocks are not unique
    realities to the United States. Yet, the U.S. consistently
    ranks among the worst compared to other developed economies on
    comparable measures of poverty. As we look to other OECD
    nations to determine how we can learn from their experiences, I
    will make two key points today.
        First, we must take care not to cherry pick lessons from
    these countries as to the context of the broader policy
    framework. And second, there are important lessons that we
    should take from other countries; namely, stronger labor
    protections, more modern work-family policies, and more
    adequate income security programs. Both of these points have
    important implications as we seek to strengthen work and income
    supports in the United States.
        On the first point, some have lifted up examples such as
    the universal credit in the United Kingdom as the inspiration
    for efforts to consolidate or block grant multiple anti-poverty
    programs in the United States. Yet, the universal credit
    guarantees benefits to all eligible low-income people and is
    administered centrally by the national government.
        In contrast, we have seen what happens here when you block
    grant a program and send it to the States. Temporary Assistance
    for Needy Families, as discussed more fully in my written
    testimony, only serves one in four poor families with children,
    has been unresponsive during recessions, and requires virtually
    no State accountability for results.
        In fact, recent data shows that States only spend an
    average of 8 percent of the block grant on work-related
    activities. It would be a terrible mistake to view TANF as a
    model for any of our vital income security programs.
        Moreover, one of the main problems that the United Kingdom
    is trying to address, financial penalties for work, is far less
    of an issue in the United States in part due to our earned-
    income tax credit. Together, the earned income and child tax
    credits reward work and lifted approximately 10 million people
    out of poverty last year. That is one of the reasons why it is
    so important that as Congress considers tax extenders that we
    build upon what works and not make any business tax breaks
    permanent without also making permanent parts of the EITC and
    child tax credits set to expire in 2017.
        Moreover, there is growing bipartisan support, including
    among members of the panel testifying today, for expanding the
    EITC for childless adults. So what lesson should we draw from
    other wealthy nations to cut poverty and promote economic
    mobility? First, other developed nations recognize that
    supporting people in work means adopting stronger labor
    standards. In the United States, the Federal minimum wage is a
    poverty wage. Low-wage workers often face unpredictable or
    inflexible schedules, and only about 7 percent of private-
    sector workers belong to a union.
        In contrast, even as the United Kingdom's conservative
    government is implementing the universal credit, they are
    moving forward to increase their already more generous minimum
    wage with a goal of reaching 60 percent of median earnings by
    2020. Workers in the United Kingdom also enjoy a right to
    request flexible and predictable schedules. And in Denmark,
    collective agreements between trade unions and employer
    organizations are the norm and not the exception.
        Second, other OECD nations have more robust work-family
    policies that support women's labor force participation such as
    paid sick days and paid family leave. In contrast, the U.S. is
    the only developed Nation in the entire world that fails to
    provide paid family or parental leave.
        Finally, other OECD nations tend to have much more adequate
    income insurance policies than the U.S. for the income shocks
    that can rock a family. Nearly all OECD nations guarantee
    healthcare coverage to their citizens. Nearly all OECD nations
    provide a child benefit that significantly reduces child
    poverty. And most countries offer significantly more adequate
    unemployment insurance than the United States, for only about
    one in four unemployed workers currently receive benefits.
        Even with recent disability reforms, countries such as the
    United Kingdom, Australia, and the Netherlands, these countries
    still have higher recipiency rates, more adequate benefits, and
    spend more of the shared GDP on their disability programs than
    we do here in the U.S. These ideas are not just international
    standards. Policies such as raising the minimum wage and
    enacting paid family leave command the support of the vast
    majority of Americans across the ideological spectrum. Not only
    that, they are proven methods to reduce usage of the safety net
    in the first place. Raising the minimum wage at $12 an hour by
    2020 would save $53 billion in nutrition assistance over the
    next 10 years.
        We must build on this body of evidence from both the U.S.
    and abroad to advance these types of policies with the proven
    track record of cutting poverty and boosting the middle class.
    Thank you.
        Chairman BOUSTANY. We thank you.
        [The prepared statement of Ms. Boteach follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman BOUSTANY. Mr. Burkhauser, you are recognized.

        STATEMENT OF RICHARD BURKHAUSER, SARAH GIBSON BLANDING
      PROFESSOR OF POLICY ANALYSIS, CORNELL UNIVERSITY COLLEGE OF
                             HUMAN ECOLOGY

        Mr. BURKHAUSER. Thank you for the opportunity to speak to
    you today in this iconic American room.
        I have one figure, which I would like to put up here that
    comes from my co-authored work with Mary Daly and Nicholas
    Ziebarth, that shows the dramatic growth and eventual decline
    in disability caseloads of a working-age person in Germany,
    Netherlands, and Sweden over the past 40 years and the rise in
    the United States especially since 1990.
        We argue that neither changes in underlying health nor in
    population characteristics can account for this cross-country
    difference. A systematic look at the policies in place during
    the growth years in these European countries and in the United
    States today, reveals disability programs focused on providing
    cash assistance rather than full-time work. This policy design
    was based on several assumptions.
        One, people with disabilities are unable to work. Two, it
    is easy to determine who is and is not disabled, and three, the
    behavior of individuals, program managers, and employers is not
    affected by program rules or incentives. None of these
    assumptions are correct. The single most important factor in
    reducing caseloads in all three European countries was a shift
    to work-first policies. These policies slowed the movement of
    disabled workers onto the rolls by ensuring the accommodation
    and rehabilitation were first tried before workers were
    considered for long-term disability cash payments.
        Germany accomplished this by substantially increasing the
    bar for entry onto their disability program and reducing
    benefits, but also by requiring employers to implement a
    workplace integration program. This ratcheting up of
    eligibility criteria, of government disability benefits,
    resulted in major growth in private disability market. In 2012,
    for instance, 61 percent of employed men and 42 percent of
    employed women were covered by the private disability insurance
    system, more than twice that in the United States. Because
    private disability payments are experience rated, this
    encouraged workers and employers to look to rehabilitation and
    accommodation first, since they now more directly bear the cost
    of the movement onto the disability rolls.
        In the Netherlands, disability standards were also raised
    and benefits reduced, but an even larger shift to workforce
    policies took place. Employers are now mandated to provide the
    first 2 years of disability benefits to their disabled workers.
    In addition, employers must demonstrate an effort to provide
    accommodation and rehabilitation to their works, and these
    workers must show a willingness to use them. This policy change
    also resulted in major growth in private disability markets,
    and these experienced-rated payments further ensure that
    accommodation and rehabilitation are tried before workers move
    on to disability rolls.
        In Sweden, the government merged their sickness program
    with their disability program and began a series of changes to
    standardize and enforce the administration of these now joint
    systems. Most notably was the centralization of screening
    processes. This allowed policymakers to better regulate the
    gatekeepers and enforce the strategy of promoting participation
    in work before offering cash benefits.
        So what lessons can the United States learn from these
    experiences? European policy outcomes show that it is not the
    case in the absence of benefits individuals with disabilities
    would remain out of the labor force dependent on other forms of
    public or private assistance for support.
        Disability reforms over the last decade provide evidence
    that employment will increase and the pro-work policies replace
    policies that had the opposite effect. People with disabilities
    would otherwise have moved on to long-term cash benefits were
    able with reasonable levels of support to return to work.
    Critics of these reforms argue that the disability insurance is
    especially important in economic downturns or individuals with
    limited work capacities are more likely to be laid off and less
    likely to find a job.
        Past experience, especially in Germany and the Netherlands,
    who choose this logic to turn their long-term disability
    program into unemployment programs suggest that it can be a
    very expensive and untimely and ultimately ineffective policy
    decision.
        The key message from the EU experience is that exclusively
    divorcing long-term unemployability insurance, from disability
    insurance, is critical to effectively targeting resources for
    its old populations. The experience of the EU nations suggest
    that it is possible to balance competitive goals of providing
    social insurance against adverse health shocks and maximizing
    the work effort of all working-age adults.
        Past disability policies in both the United States and EU
    countries have focused more on the former than the latter
    resulting in rapid growth of disability caseloads to outpace
    growth in the economy. Efforts to shift to more pro-work
    policies in Europe suggests that fundamental disability reforms
    that can lower long-term costs for taxpayers, that can make the
    job of disability administrators less difficult and approve the
    opportunities of Americans with disabilities to work. Thank
    you.
        Chairman BOUSTANY. We thank you for your testimony.
        [The prepared statement of Mr. Burkhauser follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman BOUSTANY. Now we will move on to questions. And I
    will begin by starting with Mr. Besharov.
        On page 6 of your testimony, you have a chart summarizing
    the types of changes European countries have made to their
    safety net programs in recent years. And the most common one,
    just in looking through the whole collection of them, appears
    to be requiring individuals to work or prepare for work in
    exchange for receiving benefits. And in our subcommittee
    hearings, we have talked about the importance of having welfare
    programs, a system of programs focused on work, trying to put
    work first, but often times we focus on the government
    implementation of this policy. And it struck me over the course
    of the year, as I have tried to understand this, and I have
    spoken to recipients, you know, beneficiaries of programs and
    some of the trials that they have had in getting into
    meaningful work, that one of the most important viewpoints that
    we are missing, as we look toward reform, is looking at the
    viewpoint of the employers, and how do you bring the employers,
    who will provide jobs, into line with these government
    programs, you know, Federal, State, and so forth?
        I mean, just looking at the testimony and some of the other
    things I have read, other countries have tested different ways
    of partnering with employers to help welfare recipients move up
    as well as to help employers get the types of employees they
    need. Of course, we know in certain areas there are--their job
    availabilities are not being filled by Americans who could be
    looking at this. And I am convinced that we can't solve a lot
    of our economic problems until we address this issue of how do
    you get those who are not working who can work into work and
    meaningful work?
        So what have other countries done in this area, looking at
    that side of it from linking the employers to these programs so
    that we have, you know, a system that actually helps the
    beneficiary get into work? And are there lessons that we can
    learn in working with employers here in this country, lessons
    that we can learn from our partners in Europe as to how they
    have been successful with this?
        Turn your mike on.
        Mr. BESHAROV. Yeah, sorry. A small detail first. The
    initial implementation of TANF was very exciting, and it was
    almost purely work first, which is look for a job. Many of us
    hope that there would be work experience, but the caseloads
    went down so quickly and, frankly, the Clinton administration
    was not interested in work experience, which is on-the-job
    training of some sort. So that whole process disappeared from
    our welfare procedures.
        What the Europeans do is they take advantage of the fact
    that there are all these small blue-collar jobs. Notice I said
    blue collar, because it is extremely difficult to get a welfare
    recipient who has dropped out of high school and so forth into
    a serious white-collar situation. So in the U.K., in Germany,
    there are processes with working with small employers, not just
    the large ones. And if you ask me what the American connection
    there would be, it would be either in legislation or in policy
    to make it easier for work experience and under TANF or SNAP or
    whatever, to be with individual employers--we don't have to be
    with the GEs or the whatever, the Amazons. Get credit for that
    and accept the fact that it is blue-collar work, not white-
    collar work and not limit work experience to non-for-profit
    firms, which is the case--or organizations, which is the case
    in many parts of the country.
        Chairman BOUSTANY. Yeah. It seems to me that that is how
    you get people on that ladder to where they can move up. And
    one of the things that has been missing, as I have reviewed it,
    you know, clearly, you spend, you know, a long time studying
    this, but as I have looked at it over the course of a year, it
    seems that we just have these disconnects.
        We have a Federal program, States basically operate the
    program. The metrics we are looking at really are not as
    helpful as what we really need. What we really need is, okay,
    who is getting into work? What kind of wages are they starting
    at? What is happening, 3 months, 6 months later, a year later?
    Are they really into a meaningful job? But linking those small
    employers and the job availability to the beneficiary and just
    putting two and two together just seems like it ought to be
    simple, but yet, it doesn't happen.
        Mr. BESHAROV. I see the time. At the risk of creating a
    minor tremor here, one of the problems is going to be the
    minimum wage. Most of these programs have an exemption to the
    minimum-wage programs. If the minimum wage is actually $15 an
    hour, I think it is going to be extremely difficult to see
    current welfare recipients untrained being hired for those
    jobs.
        Chairman BOUSTANY. Thank you. My time has expired. I am
    going to go to Mr. Davis.
        Mr. DAVIS. Thank you very much, Mr. Chairman.
        Ms. Boteach, I have a bill called the Child Poverty
    Reduction Act that draws on the successful effort in the aid to
    set measurable national benchmarks for child poverty reduction.
    Within the first decade of enactment, Britain's child poverty
    rate decreased by 50 percent. In contrast, in the U.S., as many
    as 3 million children are living in families with less than $2
    a day in cash income.
        Is there a similar trend in extreme child poverty in other
    developed countries? And if not, why not?
        Ms. BOTEACH. There is not. You have looked since 1996, as
    welfare reform has been implemented, and you have seen an
    increase in deep poverty. And one of the lessons I think that
    is core to draw from the United Kingdom is they did it
    through--they set a national target which again mobilizes
    people on a common goal and can bring different actors
    together, but then the policies that flow from that did the
    basic labor standards, they enacted the minimum wage, they
    expanded their paid family leave. But they also expanded child
    tax credits, family allowances, and they made sure that there
    was a floor underneath which people should not fall.
        And so that combination of both rewarding and encouraging
    work, and at the same time ensuring that there was an adequate
    social insurance system in place so when people fell down means
    that in countries like the United Kingdom and other countries,
    you don't see the same degree to which you have $2-a-day
    poverty here in the United States.
        Mr. DAVIS. So we do see some precedent if we want to follow
    the pattern that might help us move more of these families out
    of poverty?
        Ms. BOTEACH. Right. We can look across the pond and see not
    just in the United Kingdom, but in many other OECD countries,
    this combination of raising the minimum wage, there is higher
    union densities in these countries, which already means that
    wages tend to be higher. Policies that enable women to more
    fully participate in the labor force.
        If we were to close the gender wage gap in this country we
    would cut poverty for working women and their families in half.
    And so policies that seek to ensure that women can both
    participate in labor market as well as earn similar to their
    male counterparts are going to have dramatic increase on
    poverty.
        And then, finally, for example, our child-tax credit in
    this country, a single mom working full time under minimum wage
    under current law will get about $1,800 from the child-tax
    credit. But if Congress fails to make permanent the 2009
    provisions, that single working full time at the minimum wage
    with two kids would get about $57.
        So we need to think how we get things like our child-tax
    credit and all of our safety-net programs more fully available
    to all of those who qualify.
        Mr. DAVIS. Let me ask you. Several of the countries we are
    discussing today have a particularly strong history of
    collective bargaining. A strong labor movement in the
    Netherlands is one of the reasons that their disability policy
    did not lead to widespread age discrimination and wages in
    Denmark are consistently higher than in the U.S. because
    collective bargaining is the rule, not the exception.
        We know that union membership have benefits for workers,
    but what are some of the benefits that researchers have found
    for children who live in union households as many in Denmark
    do?
        Ms. BOTEACH. There are very strong associations between
    union density and children's economic mobility. For example,
    union density, it has about the same association as dropping
    out of high school in terms of the opposite effect on
    children's economic mobility. High school graduation is widely
    seen as a very important variable in determining children's
    life outcomes. An analysis by Center for American Progress and
    our colleagues at Harvard has shown that there is a similar
    premium that unions provide in terms of children's economic
    mobility.
        Another thing that unions do, is unions are associated
    controlling form many other factors with marital stability,
    through the increased premium of wages, stability of schedules,
    et cetera. And so in terms of thinking about families, in terms
    of thinking about children, beyond just the benefits to the
    economy, unions benefit children and families strongly.
        Mr. DAVIS. Well, let me thank you very much. And so it
    seems that union membership does, indeed, have value for
    children as well as for their families?
        Ms. BOTEACH. Absolutely.
        Mr. DAVIS. Thank you very much.
        And I yield back, Mr. Chairman.
        Chairman BOUSTANY. I thank the gentleman. We will now go to
    Mr. Meehan.
        Mr. MEEHAN. Thank you, Mr. Chairman. And I thank each and
    every one of you, not only for your testimony here today, but
    the work professionally you have put into studying these issues
    so that we can have the greatest impact.
        And I am interested in this, finding this right balance.
    And, Professor Besharov, you seem to be talking about this
    place where I am trying to understand where this place is,
    where there is the--we want to increase workforce participation
    by people who are, you know, in programs like this. And what
    have you seen with respect to anything overseas or others that
    you have studied--where is the right balance for financial
    incentives to get people to stay in the workforce versus the
    opposite impact, which is at the certain point you begin to
    say, you know, I may not work? Has anything worked to find that
    right balance, or where is that balance?
        Mr. BESHAROV. It is always difficult to say what a
    particular program works. It is much more a question of the
    expectations that permeate the agency and the society. What the
    Germans have succeeded in doing, what the French are trying to
    do, is change the public ethos about the receipt of public
    benefits. What they are trying to say is across all these
    programs, we will support you, maybe not as much as you would
    like, maybe not as much as the left, although many of these
    programs have been proposed and adopted by the left. We will
    support you, but we expect you to look for a job.
        Are there penalties for looking for a job--for not looking
    for a job? Yes. In some places, the welfare-type benefits are
    reduced in steps. In some places they are terminated. And what
    is really quite striking, and I don't mean to turn to a
    colleague, but what is striking about some of the disability
    reforms is that unlike our system, we not only encourage people
    on--they not only, in some countries, encourage people on
    disabilities to work, they reward them financially. They think,
    as I think many disability advocates do, that there is no such
    thing as a person who can't work.
        Mr. MEEHAN. I am not troubled by that concept, but let us
    flip that. Because one of the things we often talk about is
    discrimination against somebody who is disabled. So how do you
    treat two classes of people, a person who is--well, you know,
    how do you treat two classes of people, somebody else who is
    just in the workforce versus how do you give a higher salary to
    somebody who has a disability to do effectively the similar
    work?
        Mr. BESHAROV. The way they do it in Europe--in some
    countries is, there is a disability payment. And if that person
    gets a job, we don't reduce the disability. They don't reduce
    the disability payment dollar for dollar.
        Mr. MEEHAN. Right.
        Mr. BESHAROV. It is just the way we changed welfare a
    little bit, but not enough. Which is they disregard some of the
    income to create an incentive. Now, it is expensive to do that,
    and it is a little bit of a gamble. Your idea here is, if I do
    this, will the caseloads go down. In this country we seem to be
    hammer locked not to even try.
        The recent budget agreement takes us a step further away
    from that kind of solution in disability. I think it belongs in
    disability. I think it belongs in TANF. I think it belongs in
    SNAP. I think it belongs in all the welfare programs that we
    create, an incentive to go to work and we not penalize people
    for being in work.
        Mr. MEEHAN. Would there also be similarities to other kinds
    of supports that would not be used as penalties, say, for
    instance, there was discussions about women who need child care
    in order to be able to stay in the workforce?
        Mr. BESHAROV. There is research on this by the MDRC, the
    New York City research unit, which is, I think, widely regarded
    on both sides of the aisle. I am not endorsing the policy
    prescription here, but the research was about whether people in
    public housing should be required to work or at least engage in
    work first. And the finding--this is post TANF. This is about 7
    years ago. The finding was very clear that requiring recipients
    in public housing to look for work increased their work.
        And the MDRC recommendations are pretty clear about this.
    Yes, you can do it in a range of programs. My own sense is, I
    would love to see it happen in the mainstream programs first,
    TANF, SNAP. Let's do it there before we get it to housing and
    child care, which raise a host of other questions about the
    well-being of children. But the research suggests that any time
    you ask someone receiving a benefit to do something in return,
    or almost any time, you get a result. You get a behavioral
    change.
        Mr. MEEHAN. Thank you, Mr. Besharov.
        Does anybody else have a comment with respect to those
    issues before I yield back?
        Ms. BOTEACH. If you don't mind, I would like to make a
    clarification. In the U.S., our Social Security disability
    insurance system is not mutually exclusive with work. People
    who receive SSDI can, in fact, go back to work and without
    getting knocked down on their disability benefits for up to a
    year. And at any point after that, if they are able to earn
    above a very minimal threshold, they can expedite a return back
    onto SSDI if their disability worsens. And so work and
    disability are not mutually exclusive as has been painted in
    the previous comments is one clarification that I wanted to
    make.
        In fact, our SSDI system not only has the strictest
    disability standard in the developed world, but it encourages
    work in that way for those very few SSDI applicants who are
    able to work.
        In terms of barriers to work, child care is a very serious
    one, indeed. Only about one in six people who are eligible for
    childcare systems in this country is able to access it, which
    can result in people either not being able to go to work or
    turning to low-quality care, which can reduce their ability to
    stay in the job and it also has long-term consequences on
    children's outcomes, because those early years are so important
    for brain development. And so speaking about child care as a
    work support is vitally important as part of this conversation.
    Thank you.
        Chairman BOUSTANY. I thank the gentleman.
        Mr. Lewis.
        Mr. LEWIS. Thank you very much, Mr. Chairman, for holding
    this hearing.
        Ms. Boteach, I would like you to follow up. In our country,
    when you compare America to Denmark, Netherlands, United
    Kingdom, we have little paid leave. But when you have young
    children, mothers and fathers without child care, it is very
    hard for people to be employed and remain employed. Someone,
    someplace, somewhere must care for the child, care for the
    children. Will you elaborate?
        Ms. BOTEACH. Absolutely. I mean, I think this is very
    relevant for the conversation we are having today on our
    overall system of work and income supports. Because when women
    have access, and when families have access, including fathers,
    to paid family leave, you see greater attachment to the labor
    market. Women don't have to leave their jobs in order to take a
    short period to stay at home with young children. You see they
    have higher earnings over time, more workforce participation
    over time. And, in fact, a study of New Jersey's paid family
    leave program--they are one of the three States that
    implemented one--shows that women who were able to take the
    paid family leave had 40 percent less usage of public
    assistance in the year afterwards.
        And so there is a direct relationship. It is very difficult
    to talk about the safety net in isolation, because it is tied
    very closely to our basic labor standards and our work-family
    policies. And when we look to other countries and the reforms
    that they are making, they have those crucial building blocks
    in place.
        This is important not just as a work support, it is
    important speaking to intergenerational poverty. Because when
    women are able to have access to paid family leave, when we are
    able to close the gender-wage gap, those have effects on
    children's early experiences. And the first few years of life
    are so crucial for children's health, earnings, educational
    outcomes in the long term, and when we make investments in
    those children up front, we see dividends for years down the
    line.
        Mr. LEWIS. Thank you. If you could have young children
    growing up in a family seeing their mother and father working,
    supporting them, can that help to break the cycle of poverty?
        Ms. BOTEACH. It is very important. It is important, because
    income in those early years makes a huge difference. There was
    a study that showed just $3,000 more for a poor family in
    income resulted in that child earning 17 percent more later on
    down the line.
        And in addition, you want to make sure that people, as they
    are breadwinning, they can balance those caregiving
    responsibilities. You know, in the past 50 years, women have
    gone from being about a quarter of breadwinners or
    cobreadwinners in families to being two-thirds of mothers are
    breadwinners or cobreadwinners in families, and yet, our system
    of policy to support women's labor-force participation is so
    out of date that we are, again, the only country that does not
    have paid family leave. In not just the developed world, but
    with very few exceptions, in the entire world.
        Mr. LEWIS. Let me ask other members of the panel. If you
    raise the minimum wage, provide a family, provide a mother, a
    father with more income, could they afford to provide child
    care, to help in providing child care?
        Ms. BOTEACH. Yes. Those are complementary policies. Because
    when you raise the minimum wage, when you enact things like
    paid family leave, even in a minimum wage of $12 or $15, people
    are still going to struggle to afford child care. CAP has
    proposed, actually, a high-quality childcare credit, which
    would not just ensure that families could afford on a sliding
    scale to both pay into, but be able to receive child care, but
    that it would be high-quality and safe and be held to certain
    standards. Because it is important both to have the access to
    child care, but also both for children's long-term outcomes and
    for parents' peace of mind and ability to work for that child
    care to be high quality as well.
        Mr. BESHAROV. You asked about the other members of the
    panel. If you look at my graph, figure 2 on page 4, what you
    will see, and I don't think anyone would disagree, that over
    the last 40 years, women have increased and mothers have
    increased their workforce labor participation a ton. And male
    labor-force participation has declined. That was what was
    happening in Europe as well.
        We can have a conversation about child care, and I think
    that is an important issue, but I think the topic for the
    hearing here should focus on the fact that we have a broader or
    another problem, and that is declining labor-force
    participation of men, white, black, and Latino. It is connected
    to their opportunities. It is not just the minimum wage. It is
    connected to their schooling. It is connected to the
    availability of other benefits for them and other forms of
    support. And if we are going to address the problem of low
    labor-force participation, we will have to go far beyond child
    care. And I think we have to address these benefit programs and
    how they support men getting back to work.
        Ms. BOTEACH. Can I----
        Mr. LEWIS. I yield back--I am not quite out of time.
        Do you want to respond?
        Ms. BOTEACH. No. I mean, I wanted to underscore that I
    don't think it is mutually exclusive to encourage men's labor-
    force participation and women's labor-force participation. And
    many of the policies set forth in my testimony, whether it was
    raising the minimum wage, the earned-income tax credit for
    workers without dependent children that would help low-income
    men as well as low-income women to have bipartisan support.
    These are things that we can undertake that reward work, and
    tackle poverty, and also address men's labor-force
    participation alongside women. But we need to encourage both,
    not focus on one at the expense of the other.
        Mr. BESHAROV. If I may. This committee has all the
    resources to do everything. I think we can have that
    conversation. But the Congress sets priorities. So I would say
    that we have an issue for the welfare of the country that we
    address. I think if you look at the graphs that I have
    presented, a problem requiring immediate attention is what is
    happening to the men. We have had a recent report about high
    death rates for middle income men, white and black. And we know
    there is a problem there, and it requires concentrated
    attention.
        Our only handles are these support programs, and we should
    be looking at them. So I am not saying don't look at child
    care. I am just saying it is very important that we understand
    that the decline in labor-force participation is among men, not
    among women. And it has been, except for the last few months,
    it has been growing over the last 30 and 40 years. That is what
    triggered European action. That is what triggered European
    action, which was to try to get those men back into the labor
    force.
        Mr. LEWIS. Mr. Chairman, can I have just another----
        Chairman BOUSTANY. Very quickly. Because we want to move
    on.
        Mr. LEWIS. I don't quite understand what you are suggesting
    here. Are you suggesting that because women are working, and
    they have child care, men, or something happening to them is a
    psychological thing? What is it?
        Mr. BESHAROV. Oh, no. No. No. Mr. Lewis, no, I don't mean
    that. What I mean----
        Mr. LEWIS. Are they giving up on work because their wives
    are working and their children are being taken care of?
        Chairman BOUSTANY. I think what Mr. Besharov is describing
    is statistically, we are seeing low labor-force participation
    among men across all----
        Mr. LEWIS. Well, you are not suggesting that women are
    taking men's jobs? I know you are not suggesting that.
        Chairman BOUSTANY. No, I don't think he is suggesting that.
        Mr. BESHAROV. I would never suggest it at a hearing like
    this. Sir----
        Mr. LEWIS. Well, you need to make it plain, make it clear,
    rather than just throwing out something.
        Mr. BESHAROV. So I think the issue here is, these men have
    fewer opportunities. I am sure you have given speeches about
    the decline in manufacturing jobs. I am sure you have given
    speeches about the decline of the kind of jobs that high school
    graduate men used to have. Those jobs are disappearing from
    this country, and it has become a lot easier for those men to
    either go on unemployment or disability or be supported by
    other members of their families.
        I hope it doesn't sound like a radical idea to say we
    should help them as well as helping the women, and it is a
    different set of benefits that we have to attach and deal with.
    And I started my conversation by saying, I would love better
    high schools, because part of this problem is going to get
    worse if those young men continue to graduate from high school
    without the skills they need for the modern world.
        Chairman BOUSTANY. I am going to have Mr. Burkhauser
    quickly respond, and then we will move on.
        Mr. BURKHAUSER. So I would just like to bring a couple of
    facts into this issue of whether minimum wage is an answer to
    anything. The Congressional Budget Office scored the proposal
    of the Obama administration to raise the minimum wage to
    $10.25, estimated it would cost a half million jobs. Those jobs
    mean less income for low-income people.
        My work has shown that there is no relationship between
    increases in the minimum wage and reductions in poverty. No one
    can show that relationship. And the reason is that while it is
    true that those people who continue their jobs have more wages
    and income, those people who lose their jobs, their families
    drop back into poverty.
        Ms. BOTEACH. Just to clarify----
        Chairman BOUSTANY. Thank you, Mr. Burkhauser.
        We are going to move on now to Mr. Dold.
        Mr. DOLD. Thank you, Mr. Chairman, and I want to thank you
    for hosting this and holding this hearing. And I want to thank
    our witnesses for coming.
        And I think one of the interesting things that we are
    trying to deal with is as we look at the situation around our
    country, we have got 46 million people that are living in
    poverty; we have too many people, as we look at our labor-force
    participation rate, that is a decade's low. And, again, we want
    to talk about how do we get people back to work, how do we get
    people off of welfare rolls and back to work.
        In your research, in your studies, as we look around the
    world, what country is doing a particular program well that we
    should be looking at right here? Can you just give me a country
    and a program that we ought to be looking at for our own
    research? Start over here.
        Mr. BESHAROV. Well, there are many possibilities.
    Conceptually, whether it is Germany, the U.K., Netherlands, and
    I think Denmark as well, the idea that after a set period of
    unemployment benefits, the amount of benefits goes down after a
    set period. And after another set period of time, that person
    goes on public assistance, and that public assistance also has
    a work requirement. That conceptually, is what I would advocate
    to you.
        There are programs that grow out of that concept, but the
    concept is government aid assumes workforce participation over
    time. That is the concept I would propose.
        Mr. DOLD. Great. Next, Ms. Boteach, do you have a
    particular country, and a particular program?
        Ms. BOTEACH. Sure. In the United Kingdom, for example,
    their child allowance and family tax credit, they give to--they
    have work tax credits that encourage workforce participation
    similar to our EITC, but the child benefit in those countries
    is not contingent upon work. And in part, that is because when
    you have these--you know, the early years of children's lives,
    the long-term economic prospects are largely dependent on those
    income in those early years.
        It is important to have work incentives. It is important to
    have to have work incentives like the EITC that has been wildly
    successful in this country, but in other countries, their child
    benefits tend not to be contingent upon low-income families'
    earning. So, for example, in this country, the lowest income
    families are the ones who miss out on a portion or all, in some
    cases, of our child-tax credit. And I think, as I said earlier,
    I think we would all agree that a good job is the surest
    pathway out of poverty----
        Mr. DOLD. Right.
        Ms. BOTEACH [continuing]. But that ensuring that children,
    especially in their youngest years, have the resources for
    their parents to be able to purchase diapers, be able to
    purchase infant hygiene products, et cetera, is very important
    for children's long-term outcomes.
        Mr. DOLD. Mr. Burkhauser.
        Mr. BURKHAUSER. The Netherlands used to be known as the
    sick country of Europe, because it had more people on their
    disability rolls than any other country in Europe or elsewhere.
    The reason for that is because the government was interested in
    keeping unemployment rates down, and they made a deal with the
    unions and with the corporations to allow people to come onto
    disability rolls, therefore, not be in the labor force and,
    therefore, keep the unemployment rates down.
        But the foolishness of that eventually became so great
    because of the share of the populations coming onto disability
    changed the system and recognized that what you want to do is
    send signals to employers to provide accommodation and
    rehabilitation to workers and keep them in the workforce. So
    what they did was mandated employers be responsible for the
    first 2 years of disability benefits.
        Immediately, a private insurance system came up in the
    Netherlands, because employers didn't want that risk. And now,
    an experience rated private insurance system ensures that
    people don't go onto the disability rolls to hide them, hide
    them from the unemployment rate. They only go on there when
    they can't work. These sorts of things of playing around with
    the system to make the numbers look better is a rampant kind of
    problem. And what you need to do is figure out what exactly it
    is you want to do.
        So I will just give you an example of the poverty rate we
    have been talking about. You know that the poverty rate, the
    official poverty rate that we now use doesn't include earned-
    income tax credits as income to measure about whether you are
    in poverty; they don't include the food stamps. We have a
    supplemental poverty measure, that when you look at that
    measure, you see the poverty rates have fallen substantially in
    the United States. So we should get our numbers right, at
    least.
        Mr. DOLD. Well, I certainly appreciate that. And one of the
    things that we do know in terms of how we combat this, we want
    people to get into a good job. So the question is, what role do
    the employers play or have you seen the employers play over--in
    other countries, and what can we be doing?
        One of the things that we do know, and we have seen, we
    have had people testify before is that once you reach to a
    certain level of income, the benefits drop. And it is, in
    essence, like a cliff. And we can argue whether the recipients
    know where the cliff is. I would argue they know exactly where
    the cliff is. So we need to try to provide that off-ramp. Are
    there countries out there that are providing that off-ramp to
    allow them--again, we want to encourage them to get that raise,
    encourage them to excel in the workforce and still not just cut
    off benefits.
        Mr. BESHAROV. It is extremely difficult, because when you
    try to make the off-ramp gentle, you include many more people
    in the program, and it gets extremely expensive, more expensive
    than, I think, both sides of the aisle.
        Mr. DOLD. Is there a country out there that does it,
    though? Is there a country out there that is doing it well?
        Mr. BESHAROV. The U.K. is trying very hard to do it and
    having great difficulty doing it. And we might have a
    disagreement about how successfully they are doing, but the
    U.K. is doing it. And the countries that try to synchronize
    their disability, and their UI, and their welfare, come close
    on those benefits, not the benefits for child care and so
    forth, which are, in this country, often a cliff.
        Mr. DOLD. Thank you, Mr. Chairman, for your leniency on the
    time.
        Chairman BOUSTANY. I thank the gentleman.
        Mrs. Noem.
        Mrs. NOEM. Thank you, Mr. Chairman.
        Mr. Burkhauser, I wanted to ask your opinion on something.
    The United States has a patchwork of programs that benefit
    people in poverty or in hardship situations. Different ones for
    housing, for food, social services, health care. And while it
    is a patchwork of systems, we believe they can be streamlined.
    And in your observances of other countries, do they have a
    similar situation, or have they reformed their programs in such
    a way that would be an example for the United States to look at
    or suggestions we could follow in how to make our programs more
    effective and streamlined?
        Mr. BURKHAUSER. Well, I think the big difference between
    Europe and the United States, is that we don't have a first-
    tier cash transfer program which is an entitlement. So what we
    do have is----
        Mrs. NOEM. How does that operate?
        Mr. BURKHAUSER. The way it operates in the Netherlands and
    other places is there is just some minimum guarantee. What the
    Netherlands discovered, however, and this is what Doug has been
    talking about, is when you give an entitlement to people with
    no expectations of work, you don't get any work. And I think
    what the European countries have discovered is that you can't
    have this permanent minimum standard entitlement program
    without expectations for work, and that is what they are trying
    to do now they are trying to----
        Mrs. NOEM. Have they changed some of their programs?
        Mr. BURKHAUSER. It has changed them in the sense that now
    there are requirements to work even for these cash transfer
    programs. What we have, unfortunately, in the United States is
    the only cash transfer program that we actually have, which is
    a remnant of the original attempt to reform welfare in the
    1970s and make it income tax, is the Supplemental Security
    Income program. That program is a cash program for people who
    have disabilities. The problem is, it is very difficult to
    decide who has a disability and people who liked a negative
    income tax system have been pushing hard to expand that program
    by loosening the criteria for eligibility.
        It is also the problem we have this TANF system that tries
    to get States to reduce their roles by getting people to work.
    That is a great idea. I fully support it. But if a State can
    get their single moms onto the SSI adult program, they keep the
    block grant, and the Federal Government has to pay for it. The
    same is true with SSI kids. So that puts tremendous pressure on
    the gatekeepers because of a mismatch between State policy and
    Federal policy.
        We need to coordinate these systems. One way to do it would
    be to in fact recognize that people with disabilities can work.
    The States have been pretty good at getting people, single
    moms, off the rolls and into the workforce. We ought to think
    about devolving SSI to the States also.
        Mrs. NOEM. Is there specifically a country that would set a
    good example of how to coordinate our programs better, that you
    can think of?
        Mr. BURKHAUSER. Well, I think interesting enough, Sweden
    and the Netherlands offer two alternatives. Sweden basically is
    very much a government-centered country, but at least they
    coordinate their work policies and their transfer policies in a
    single system that can do a workforce policy.
        In the Netherlands, they decided, the government couldn't
    do either. And what they did is put incentives in front of
    employers to say, if you can't get your worker back to work,
    you are going to have to pay for the first 2 years of his
    disability benefits, and you are going to have to pay higher
    payroll taxes, effectively, because your workers are getting
    onto the rolls more than others.
        Mrs. NOEM. Mr. Besharov, is there something you would like
    to add to this?
        Mr. BESHAROV. Well, I think this idea of work for
    expectation is giantly important. As an aside, I would mention
    that Saudi Arabia has just adopted a welfare-to-work program
    for Saudis, because they are very worried that their men aren't
    working.
        What I would add here is, as you have sensed from I think
    all three of us, the conditions that prevent Americans from
    working, men or women, are intertwined. We call it disability,
    but in some respects it is just low earnings capacity,
    inability to get a job, which encourages unemployment. We call
    it welfare, and we call it aid to dependent children, but it is
    parents who can't either find jobs or earn enough. And so the
    wisdom here is to find a way across the committees to let the
    States or encourage or require the States to address these
    problems for what they are, which is unitary problems.
        It isn't just a problem of unemployment for most of the
    people who are unemployed. I think the number in my testimony,
    25 percent of the unemployed today are long-term unemployed. We
    don't know how to get them out of the system. The
    administration, I believe, does not have a proposal. I don't
    think there is a proposal. We don't know what to do. But the
    fact that we don't know doesn't mean that we shouldn't be
    looking. And these are problems that are festering.
    Politically, we like to aim at the 5 percent unemployment rate,
    which is half of what it was after the recession, and that is
    great. But there are these festering problems, which to make
    America great, they have to be addressed across income groups,
    across income and racial and ethic groups, and right now none
    of our programs, I think, do a good enough job.
        Mrs. NOEM. Thank you.
        I yield back, Mr. Chairman.
        Chairman BOUSTANY. We will now go to Mr. Crowley.
        Mr. CROWLEY. Thank you, Mr. Chairman. Thank you, in all
    sincerity, for this hearing today.
        I agree that there are important lessons that we can learn
    from other countries. Particularly when it comes to improving
    and strengthening our social safety net. So I do thank you, Mr.
    Chairman, for this opportunity.
        I think an important part of this is looking at all the
    ways these countries support their workers and their families.
    Many of the countries we have been talking about have put in
    place a broad framework of social policies in a variety of
    different areas. I think there is a lot to embrace from these
    eliminations in areas like child care, paid leave, and health
    care. And I hope that my colleagues on the other side of the
    aisle will join us in embracing these critical policies as
    well.
        And on the other topic, I was personally very encouraged by
    the United Kingdom's efforts to create universal child savings
    accounts in 2005. I have introduced legislation actually today
    to create universal child savings accounts here in the United
    States as a part of a strategy to help people be able to save
    at every stage of their lives. These accounts get children
    started saving from a very early age, actually, from the get-
    go, and teach them the importance of saving, not to mention
    providing a critical financial asset for them and their parents
    to draw on as adults.
        The U.K. had done the same in 2005, and at the 5-year
    point, over 85 percent of families were participating in that
    program, remarkably successful. So, yes, I do think we have a
    lot to gain by looking at other countries and learning from
    their experiences, but, again, we need to look at the whole of
    what the countries are doing.
        Ms. Boteach--is that correct?
        Ms. BOTEACH. You got it, yes.
        Mr. CROWLEY. All right. You touched on this in your written
    testimony, how context is important when looking at how
    countries reduce poverty and strengthen the middle class.
        One area that struck me is how, in the countries that we
    are looking at today, collective bargaining and labor movements
    have had such a positive impact, not only on countrywide
    policies like labor protections and wages, but also on
    individual workers and their families.
        Mr. Davis mentioned the positive impact unions have on
    families and children, but I know in your testimony, Ms.
    Boteach, you wrote about how labor unions also lead to better
    wages and health benefits and less need for the safety net
    programs overall.
        You also discussed how raising the minimum wage can reduce
    the need for nutrition assistance in programs like SNAP. Can
    you elaborate more on how having these supportive programs in
    place actually helps the overall system?
        Ms. BOTEACH. Sure.
        Mr. CROWLEY. Your mike, please.
        Ms. BOTEACH. Sure. Thank you for that question. Because I
    think, again, as I mentioned earlier, it is very difficult to
    have a conversation about reforming the safety net without
    thinking about the labor market with which it is interacting.
    And when you only have 7 percent of workers, private-sector
    workers, in a union in this country, and we know that unions
    raise wages; we know that unions help their workers get health
    benefits, that is something that happens in other countries in
    terms of raising wages that can help take pressure off of
    safety net programs.
        In other countries, universal healthcare coverage is a
    right; it is not a privilege. It is actually something that
    helps people get to work, because, number one, people are more
    likely to undertake entrepreneurship or to be able to move jobs
    to something better if they don't have to worry about losing
    their health insurance. And in some cases, a health-related
    issue might be one of the barriers to work, and by giving them
    health insurance, you are able to help them address that
    barrier and get back into the labor market.
        So, number one, unions can help take pressure off some of
    these social safety net programs and improve children's long-
    term economic mobility. And minimum wage wise, there have been
    studies showing that minimum wage dramatically reduces poverty.
    In fact, research by Arin Dube and his colleagues has shown
    that raising the minimum wage would lift up to 4.5 million
    people out of poverty. And research looking at across county
    lines of one State that raised the minimum wage and one State
    that did not but shared job markets showed that there were not
    adverse job effects, little to none.
        And so I think it is important that as we speak about union
    membership, as we speak about the minimum wage, as we speak
    about paid family leave, as we speak about scheduling, because
    that is the other thing unions can help with, in terms of the
    workers' time. And right now, about half of workers don't
    always know when their next shift is going to be, when they are
    going to be scheduled for. It can wreak havoc on their ability
    to find child care, transportation, to get education and
    training to move up the income ladder. And so it is very
    important that workers be able to engage in collective
    bargaining to achieve these and other ends.
        Mr. CROWLEY. Speaking of time, I know mine is almost, just
    about out, I want to thank you for that. I have been concerned
    that in recent years we have seen a lot of political attacks on
    unions and collective bargaining, and the minute wage increase
    keeps being dismissed primarily by my colleagues on the other
    side of the aisle.
        I just wanted to give you an opportunity just to respond
    to, I believe it was Mr. Burkhauser's comments about the CBO's
    report last year in terms of the effect of raising minimum wage
    on jobs.
        Jason Furman has dismissed that same comment by saying it
    is not reflective of current consensus views of economists. Can
    you comment on that?
        Ms. BOTEACH. I mean, that is exactly it. There are much
    more updated measurements that have--or studies that have been
    undertaken using better methodologies that show, looking at
    minimum wage increases, there has not been adverse job effects.
    So I think it is important to set the record straight on that
    front that some of the most up-to-date research in that regard
    is not the same as CBO's estimates.
        Mr. CROWLEY. I appreciate it.
        I yield back the balance of my time. Thank you, Mr.
    Chairman.
        Chairman BOUSTANY. Mr. Burkhauser, did you want to comment
    on that?
        Mr. BURKHAUSER. Yeah. Jason Furman has never worked on
    minimum wage issues. Has no publications in that area. I have.
    Newmark and Wascher's book shows a documentation of many
    studies on the minimum wage that show the traditional finding
    that increases in the minimum wage decrease employment. To say
    that there has been no studies, there is no other side to this
    is just silly.
        Chairman BOUSTANY. I thank the gentleman.
        This concludes all the questions, I believe, on both sides.
    So I want to thank you all for joining us today for this
    hearing on the Lessons Learned From Welfare Reforms in Other
    Countries. The testimony we heard today will certainly help us
    as we move forward on policies to improve our system, safety
    net system, to help more people escape poverty and to move up
    the economic ladder.
        You did a terrific job. We appreciate what you provided to
    the subcommittee. You certainly helped us better understand how
    we can move forward in these regards.
        If members have additional questions for witnesses, they
    will submit them to you in writing, and we would appreciate
    receiving your responses for the record within the next 2
    weeks.
        Chairman BOUSTANY. And with that, the subcommittee now
    stands adjourned.
        [Whereupon, at 3:11 p.m., the subcommittee was adjourned.]

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