Monday, June 16, 2014

By Derek Thomas

In a recent column printed by the Indianapolis Star, the Indiana Family Institute (not to be confused with the Indiana Institute for Working Families – that’s us) asserts that the U.S Government alone is the culprit for the “collapse” of the American family. To correct for this decline, they offer a simple solution; government-subsidized marriage. It’s at least thought provoking.

According to the authors, here’s what happens: a baby is born out of wedlock; the mother and father then calculate (by managing to navigate a complicated and punitively-designed web of benefits) that the mother will collect $25,000 annually in benefits if she remains single; and thus, without the financial incentive to marry, the couple co-conspires to cohabitate.

Citing studies that show an increase in the number of couples who cohabitate before marrying, they propose “cohabitation reform”. This means if the couple agrees to put a ring on it, the government can correct their scheme (which assumes a couple’s decision to marry is primarily one of income) by tapering out the so-called handsome package of benefits.

In fact, the financial incentive isn’t as great as the authors surmise and is certainly not widespread enough to be the sole cause of societal shifts in marriage patterns. Only a meager 3% of the nearly 1,000,000 Hoosiers in poverty receive TANF benefits, and of that 3%, only 11% of those are also receiving housing assistance. All told, it would be a stretch to say that even 1% of Hoosiers in poverty are collecting the full-range of benefits equal to $25,000. 

There are also potential unintended consequences of this proposal. The research on cohabitants shows that 40% of these couples split 5 years after the birth of their first child. Most likely, this isn’t the result of Uncle Sam not being there to coax them. Using the government to push any marriage at the expense of good marriages for families who aren’t yet ready may make it that much more difficult to leave an otherwise abusive relationship.

Across the nation, well-meaning attempts on both sides of the political aisle have supported marriage counseling to “build relationship skills” for low-income families, but have failed to produce results. Instead, the best foundation for a healthy marriage is economic stability; without the strong foundation that economic well-being provides, even the most dedicated partners would struggle to keep their marriage together. Indeed, according to the same research, 91% of young adults believe they should be financially independent or finished with their education before marriage.

To the credit of the authors, tapering out benefits is a good idea – for proven programs.  In fact, the cliff effect is the exact opposite of tapering - resulting in a disincentive to work, and to two-parent families. This phenomenon occurs when a $0.50 increase in hourly wages leads to the complete termination of the benefit and a dramatic net loss of resources – the loss of childcare alone can result in a 25% net annual loss of income. During our statewide outreach, we've heard from couples considering marriage, who willingly set themselves in this poverty trap in order to set a good example for their children.  Simple reforms to income-eligibility thresholds in the childcare development fund can restore the most basic incentive for hard work – a raise that results in an increase in net resources – without punishing marriage. This proposal does not pick winners and losers, but instead provides all families with a smooth landing into economic self‐sufficiency.

It’s not misplaced to say that pooling incomes reduces the burden of household expenses, but the same is true when you move in with your mother or a roommate. Just because people with education beyond high school that hold stable, good paying jobs are more likely to get married, that doesn't mean a wedding will lead to stable employment and a strong family.

Everyone agrees, we really should make families a priority, but we should be doing that regardless of how many parents are in the home. Let the record also show that according to Center for Economic and Policy Research, "there are more married parents with incomes below the poverty line than there are never-married ones, and more food-insecure adults live in households with children headed by married couples than in ones headed by just a man or woman." Ultimately, investing in and prioritizing a toolbox of family friendly policies (such as paid sick leave, childcare and early education) can go a long way towards strengthening all families by leading to better education, which leads to more stable families, which leads to reduced poverty.

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