Young men are a worrisome lot for many. Kay Hymowitz writes of this latest generation of twenty-something men as stunted, man-children who refuse to grow up (and she’s not alone). Others worry about boys falling behind in a school system designed for kids who can sit still and follow along. Indeed, we seem to spend an inordinate amount of time debating whether these are even legitimate worries.
What we don’t spend much time doing, however, is paying attention to the group of young men that deserves our worry: the young men who are barely scraping by in low-wage jobs, if they’re working at all; those who are filling up our prisons, or starting precarious relationships with their baby momma– the men on the edge of society looking for a way in but finding few doors.
That might change with a new experiment in New York City called Paycheck Plus. The program builds on the success of the Earned Income Tax Credit and offers young, single men a wage supplement of up to $2,000 a year, depending on their earnings. It’s unique because the vast majority of social welfare programs target families, not singles. That means that a man and woman working at Target earning $11,000 a year are treated very differently. The young mother of two, for example, gets an EITC of $6,000 on top of her earnings, while the single person gets nothing.
Yet as the panelists pointed out, single men are struggling mightily, and their inability to provide financially for a family is one important reason for the rise of single motherhood.
“This is pretty unique and pretty exciting,” Isabel Sawhill told a gathering at Brookings in unveiling the program.
Gordon Berlin, the president of MDRC, the “intellectual godfather” of the idea according to Sawhill, first broached this idea in a 2007 issue of the Future of Children. Now that it has come to fruition, MDRC–our partner in this Network–will be evaluating the pilot’s success.
How it works. The program targets single men and women without children who earn less than $30,000 a year. The stipend varies by annual earnings, and begins phasing out after $20,000 a year. A young man earning $10.40 an hour, or $18,000 a year, would be eligible for extra $2,000 a year, for example. A person earning $20,000 would get $1600, eventually phasing out to zero as earnings increased.
Paycheck Plus is modeled after the EITC, which has been called the most effective antipoverty program in decades. The EITC has been shown to increase employment, earnings, and income. It also has positive effects on kids. Yet the EITC is designed for families with children. (It does offer a stipend for singles but it is very small.) PayCheck Plus is aiming to remedy that.
The program is only being tested at this time. Over the next several years, MDRC will monitor whether the program encourages more single individuals (especially the most vulnerable men) to join the workforce, and whether it increases their income enough to encourage marriage and family formation. If it’s successful, and cost-effective, it may then be expanded nationwide.
Why it’s needed. As any economist will tell you, men with the least education are sucking wind in this economy. Wages for this group have fallen steadily since the 1970s, even as GDP has shot upward. A male high school dropout today earns 25% less than he would in 1973, even after adjusting for inflation. As the wages have fallen, many men have simply opted out of the workforce, taking on odd jobs off the books, or selling drugs, which too often leads to prison– or as Jamie Foxx put it, “mandatory college.”
Also, like it or not, low-wage work is here to stay. Going forward, these jobs will remain a big part of the range of available jobs. Five of the top six jobs by 2020 are those that will pay less than $24,000 a year.
Together, these problems describe an alarming landscape for disadvantage young men with limited education. Raise the minimum wage is one answer to the problem–even though the political will is not yet there. The PayCheck Plus is another way. It’d be great if we could do both of course. In fact, this pilot may be a good test case for the combination approach, given that New York City is raising the minimum wage during the period of the study.
The program reminds me of another effort to raise family income, the New Hope program. There, too, working families were given a stipend that they could use for a variety of purposes as well as other supports that encouraged work. The results were very, very promising. Among all participants, including single men, work increased and poverty rates fell. For families with children, the extra income also boosted children’s performance and behavior in school.
The program’s impact will be closely watched by policymakers and others concerned about declining workforce participation. However, as Georgetown economist Harry Holzer told the Brookings panel, we should maybe lower our expectations. “I think [the program's effects] will be positive, but modest,” he told the audience. “The demand side of the market is problematic. Recovery is sluggish and will remain so through duration of the pilot. But even in strong job market, the folks we’re talking about are the last hired (black males, e.g).” Employers are ambivalent about hiring this group, and actually the ambivalence goes both ways. Men don’t want to work in these sectors. They’d much rather be in construction or some other industry that doesn’t require them to say “have a nice day” at the end of it all.
These and other questions will no doubt abound about the program, including its potential unintended consequences. The pilot study will examine many of these questions, and we’ll know the answers in about three years.