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22–103 2017

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 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

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 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

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 

KRISTI NOEM, South Dakota 

PAT MEEHAN, Pennsylvania 

GEORGE HOLDING, North Carolina 

JASON SMITH, Missouri 

ROBERT J. DOLD, Illinois 

LLOYD DOGGETT, Texas 

JOHN LEWIS, Georgia 

JOSEPH CROWLEY, New York 

DANNY DAVIS, Illinois 


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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 


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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:] 


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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 


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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 


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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 


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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 


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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:] 


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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 workfamily 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 ConVerDate Sep 11 2014 23:32 Jan 30, 2017 Jkt 022103 PO 00000 Frm 00031 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\22103.XXX 22103

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gress 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:] 


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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. 


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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:] 


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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 


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55 

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? 


ralbany on LAP520R082 with HEARINGS
56 

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. 


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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 


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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, mothVerDate Sep 11 2014 23:32 Jan 30, 2017 Jkt 022103 PO 00000 Frm 00062 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\22103.XXX 22103

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ers 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, 


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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 laborforce 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 lowincome 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—— 


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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. 


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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 keepVerDate Sep 11 2014 23:32 Jan 30, 2017 Jkt 022103 PO 00000 Frm 00066 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\22103.XXX 22103

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ing 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. 


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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? 


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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 


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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 


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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. 


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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.] 

Æ 


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