Market mucks up mom and dad

Howard Glennerster finds working families are losing out in the US.

Those familiar with Theda Scokpol's early writing will remember her as a brilliant social historian of America's early welfare state. Those who persist in seeing the United States as traditionally anti-welfare can do no better than read her Protecting Soldiers and Mothers . It gave a completely new perspective on the origins of America's early pensions policy and support for single, mostly widowed mothers.

More recently, Scokpol has turned her hand to contemporary history and to policy advocacy. Here, I think, she is less original, relying on secondary material and others' analysis of social trends in family composition and income distribution. But she has not lost her historical perspective or her capacity to write clearly and convincingly.

This book is partly an attempt to explain how America came to forget or to decry the achievements of its highly successful social programmes. Its pioneering of free local community schools two centuries ago, the early establishment of cheap and ready access to mass higher education, the century-old programmes to protect vulnerable children, widowed mothers and later the elderly were all remarkably successful. They were the result of civil society movements - women's groups, cause groups, trade unions, local movements with a continental reach. Their members knew about the everyday lives of people and could mobilise for legislative action. Those local civil institutions have gone or are in decline. The exceptions are the coalitions of fundamentalist Christian churches, which are rooted in local beliefs and experience but from a very narrow and unrepresentative perspective. The older social movements have been replaced in the policy process by ideologically extreme think-tanks that trade new ideas in the hothouse atmosphere of Washington.

Those who have lost out in this political process are, above all, young working families. Both partners, if there are two, are working all the hours God sends and certainly have no time for, or interest in, political movements. It is not welfare that is harming the traditional family but the market.

So the "missing middle" of Scokpol's title is a composite metaphor for the average working family abandoned to the pressures of the market, the absence of local involved citizens' groups or active grass roots party politics and the absence of middle-ground policies to meet the needs of this group.

It is also a metaphor for policy-makers' recent emphasis on the poor or the "underclass". Both liberals and conservatives share these concerns. Yet, the more we target the poor with special programmes and neglect the mainstream social-policy institutions such as social security, Medicare and public schools, the more we undermine support for them from middle America. These programmes have, in fact, done more to relieve poverty than all the "poverty programmes" put together.

Scokpol is especially convincing when she describes what has happened to the structure of American families. She summarises the research that shows the serious effects of single parenthood, marriage breakdown and the equally serious effects of the double wage load on married couples with children. These effects are particularly serious for middle-class families. The case she builds is powerful. And the same could be said for the United Kingdom.

Less original, though, is her last chapter, where she sets out her agenda for the future, "Building a family-friendly America". She calls for the surplus on the social security fund to be spent giving loans to students to take them through college, reducing the burden on families. The notion is borrowed from a proposal by Barry Bluestone, a professor of political economy at the University of Michigan. This does not seem a very clever idea. The pressure would be to give cheap loans - an even lower rate of return than the social security funds get from a very conservative investment policy. It would jeopardise social security's future. If anything, the move should be in the opposite direction, investing the surpluses in higher rate of return stock to prepare for the baby boomers' retirement.

Much better to improve the system of funding American higher education. Here the Americans could borrow from British - best of all Scottish - policy and make federal loans available for students' higher education, repayable through the tax system. That would increase federal spending during the years of budget surplus and increase federal revenue during the tighter years of ageing to come, without raiding the social security pot. It is an idea with a good American pedigree. Bob Reishauer, ex-head of the Congressional Budget Office, put it forward many years ago.

More sensible is Scokpol's advocacy of Irwin Garfinkel's ideas on child support. The tax and social security system should automatically tax absent fathers, or mothers, a percentage of their income and pay the single, caring parent a basic child-maintenance allowance. This would not be income tested but would be a payment to recompense carers for their loss of support and the increase in effort that flows from being a separated or single parent. It would penalise marriage breakdown and encourage the single parent to spend more time with the child.

Instead of encouraging people to contract out of Medicare, as conservatives advocate, there should be tax incentives for employers and families to contract into Medicare, extending it from the elderly down the age range to encompass all families with children.

Scokpol gives less attention to the Earned Income Tax Credit - the model for our Working Families Tax Credit. It has transformed the take-home wages of poor Americans, especially single parents. It is, some economists argue, responsible for more of the reduction in welfare roles than the welfare reform penalties. Scokpol would like a system of paid family leave. The 1993 Family and Medical Leave Act gives workers the right to leave for family crises but with no pay. She argues for paid leave that would be an extension of the social security system, paid for by enhanced employer and employee contributions.

One can hear the howls of employers. How would you ever police such a system of leave? Sickness absence is bad enough. Who would sign the family crisis sick note? However, Scokpol has a point. Men will never take on these responsibilities until such practices are made acceptable in the workplace. Part-time work is extraordinarily limited, outside the low-pay sector, in the UK. You hack it as a man or not at all. This has to change, she argues, and not just for women.

The book is a good starting point for discussion about family policy in Britain and the US.

Howard Glennerster is professor of social policy, London School of Economics.