What Price Children?

by F. EMERSON ANDREWS

1

THREE persons made me think. Frederick Wynne, an electrical engineer, and his Minnesota wife have a boy of ten. They think the one-child system is a bad one, and would gladly have had more children — but there was the depression. Fred was nothing but a radio repairman on odd jobs for three years. That experience bit deep. Even now Fred does not feel secure; war prosperity, too, may end. They will not have another child.

Dr. Bernard Duel is the nationally known head of a great educational institution. I have not used his real name, since he might not relish my repeating a casual and personal remark which made a deep impression on me. Talking about professors’ salaries and giving children proper opportunities, Dr. Duel said, “We spaced our children so that only one would be in college at a time.” Dr. Duel and his wife have two children, one a WAC and the other a doctor.

Joe Corrigan drives a coal truck. I got to know him quite well one summer when I served as weighmaster in a coal yard. One day Joe asked for a little time to make his regular monthly visit to the relief office. I knew he was the best-paid driver in the yard, and at the first opportunity I asked his employer how it happened that Joe was getting relief. “Big family,” said the boss briefly. “Joe’s a good worker and I pay him every cent the job’s worth; but it is scarcely my fault Joe has eleven children.”

Four adults, foresighted, prudent, desirous of giving their children the best in environment and education, have a total of three children. Two adults, living in cramped and unhealthful quarters and unable even to feed their brood without the aid of “relief,” have a total of eleven children.

What has been happening to the family in America while we have been living and not looking? A generation or so ago, the family was a going concern. Most people lived on farms. It did not cost much to feed and clothe children, and in a very few years they were doing substantial chores on the farm and in the house, and more than made their keep. Rearing children was frequently a profitable business.

It seldom is now. This is not because today’s John is less strong than yesterday’s Jake, or Shirley less willing than Susie; they have less chance. Most modern Johns and Shirleys live in towns or cities where productive chores are fewer; they go to school longer each year, and for more years. If they try to work, they find that an old-fashioned form of family security — child labor — is, quite properly, being legislated out of existence. But meanwhile the costs of rearing and educating a child have skyrocketed.

How much does it cost to rear a child? A recent estimate for middle-class American families, based on prices before the war, puts it at $300 for prenatal and birth expenses, an average of $300 a year for twenty years for food, clothes, doctors, gifts, fares, and incidentals; and an additional $800 a year for tuition and other special expenses for four years, if college is part of the picture. Total outlay per child, $9500. Income — probably zero.

These figures may be generalized for any income group by considering that each child costs about as much as a house for that group. Indeed, children and houses on the FHA plan have several parallels: there is a substantial down payment followed by regular monthly payments for a period of about twenty years. If you have two, three, or more children, you are contracting for the cost equivalent of two, three, or more houses, with most payments running simultaneously!

Careful men and women do not lightly obligate themselves to purchases in the $10,000 range, even in the case of a single house which may save rent, has permanent value, and at worst can be abandoned after a few payments. A child merely adds to rent. He cannot handily be abandoned, whatever the shifts in your circumstances. And at the close of the twenty-year payment period (indeed, now at eighteen) he is suddenly not yours at all, but belongs to himself and his country.

2

FORTUNATELY, few of us who are fathers or mothers take only the economic view of our families. Children mean so very much in love, fulfillment, and downright fun. But because, bit by bit, children have ceased to be partners in a going concern and have become a heavy burden financially, the family is on dangerous footing.

The situation into which we have somehow drifted sentences all parents to a lower standard of living than their friends and associates of the same income who have no children. This might be endurable for the parents, for there are compensations; but it is not endurable to see in advance that this inequality will almost certainly prevent them from giving their children the things they need and should have.

The result is Fred Wynne, Dr. Duel — and Joe Corrigan. The result, in broader averages, is few or no children in families which have high standards of child care and education, and would provide healthful, stimulating environments for America’s future leaders, but large families of children among the careless and improvident.

There are exceptions, of course; and we shall always get a few sterling leaders out of the most unpromising environments. But we have let the family become an insolvent business which cannot possibly balance its books. In terms of the long future for America, we are now putting into effect a brand-new law, not of nature but of stupid man — the survival of the unfittest.

There is a way out. It is democratic, practical, and could be introduced in such form that it would aid rather than complicate our present difficult financial situation. It is the device known as children’s allowances — cash payments to help parents meet the additional costs of their dependents. In the form best adapted to our emergency, children’s allowances would be payments to mothers in behalf of their dependent children; in effect, salaries for mothers.

And why not salaries for mothers? Let’s look at this question squarely. A woman who raises pigs is called a producer by the Census Bureau, and is paid for her pigs. A few years ago she was even paid money for not raising pigs. But a woman who chooses the vastly more difficult occupation of both producing and rearing children — the job that is basically the most important to us as a nation — is not even a “gainful worker” according to the Census Bureau, and is not paid, either by the government or by her husband, since he has now less for her than if there were no children.

This idea of children’s allowances is not new. In England, Wesleyan Methodist ministers have been getting annual children’s allowances for a hundred and fifty years. Australia covered civil servants as early as 1920, and has now universalized such allowances as a war measure. In France, before the Nazi invasion, family allowances — now more generally called children’s allowances — covered not only wage earners and government employees, but teachers, artists, the self-employed, farmers. The 1938 Pan American Conference recommended such allowances for the American republics, and Chile is one of the twenty-eight countries which already had systems of children’s allowances before the outbreak of the war.

Very little news of these important developments trickled through to most Americans. The great depression was upon us, and then the war, and were we not sufficiently involved in adjustments to our own Social Security Act? Moreover, varying systems of children’s allowances had been adopted by Germany, Italy, and Japan, and it became a simple matter to brand them out-of-hand as totalitarian devices for increasing cannon fodder, without bothering to consider them on their intrinsic merits and demerits, or to remember that they also had been adopted by conservative governments of undoubtedly democratic nations.

Then came Sir William Beveridge’s famous report, advancing children’s allowances as the first of three assumptions underlying his whole plan for “social security from birth to death for everyone.” He pointed out that from a sixth to a quarter of all want in Great Britain was due to failure to relate income during earning to size of family; that it was “unreasonable” to set up schemes for the elimination of want due to unemployment and fail to take care of the want which existed in large families even during full employment. He proposed an allow ance rate — nothing for the first child, and an average of 8 shillings a week for those beyond the first — which would not pay the full costs of rearing children, but should be regarded “both as a help to parents in meeting their responsibilities, and as an acceptance of new responsibilities by the community.”

His proposal has already been accepted in principle by the Churchill Government, and there is some probability that it may be adopted ahead of other proposals in the Beveridge Plan as a war measure. Indeed, long before the Beveridge Report, Lord Keynes, at the very beginning of hostilities, was proposing children’s allowances as a necessary part of his plan for financing the war.

3

IN THE United States, the idea of children’s allowances strikes most people as a complete novelty. Yet we have long been using this principle, but in a disjointed program with many gaps and inequities.

Public schools are a subsidy to children which the bachelor landowner helps to pay. Free milk and free dental service in some schools, playgrounds for children, half fare for young children, are other minor subsidies. The Social Security Act took another long step in this direction, and now pays out more than 100 million dollars a year to mothers in behalf of dependent children. But for the mother to receive it, the father must either die, desert, or be put in jail. Up in Vermont I know a father who sometimes generously does get himself jailed; his family of fourteen is then much better off than on any wage he could earn.

We already have a system of children’s allowances for the armed forces. The Servicemen’s Dependents Allowance Act of 1942 provides as a direct government contribution $12 per month for the first child, and $10 for each additional child. Moreover, these “children” may include adopted children, stepchildren, and under some circumstances illegitimate children. Although widespread drafting of fathers has not yet occurred, so far as the law is concerned, in both this and the last war a complete system of children’s allowances has actually been available to a large part of our population.

Our queerest subsidy for children, as it works in practice, is our income tax law. Because the $350 exemption for each child under eighteen is in effect applied to the highest rate paid, at the 1942 rates of 6 per cent tax and surtaxes ranging from 13 to 82 per cent, the government “rebates” to families paying at the lower of these rates only 19 per cent of $550, or $66.50. But the business executive or Hollywood star who gets more than $200,000 a year receives a rebate of $308 for his child!

This anomaly is reflected in all its absurdity in the payroll deductions of 20 per cent, after personal exemptions, which are now in effect. A workman paid less than $24 a week gets precisely the same amount deducted whether he is married and has no children or is married and has three children to support. Persons receiving $50 a week or more have their tax progressively decreased $1.20 a week for each child.

In civilian life, children’s allowances have already been tried out in a few isolated instances in America. The Columbia Conserve Company in Indianapolis has for many years supplemented its basic wage with an allowance for family dependents. Bennington College, subject to availability of funds, has set up a plan permitting an allotment to its staff of an extra $500 a year for each dependent up to three in number.

At least seventy-five school boards have authorized family allowances for schoolteachers. (In many such systems the wife is counted as a dependent as well as the children in establishing the rate, and the term “family allowance” is therefore the appropriate one.) The teaching profession is a singularly fine example of one of the further advantages of children’s allowances — its contribution toward solving the “equal pay for equal work” dilemma.

The great majority of public schoolteachers are single women, usually without dependents. But educational efficiency and social policy require that we retain in the teaching force considerable numbers of mature men and women who do have dependents. Tax-conscious citizens would howl down any proposal that the salary level in teaching be raised to the point where a “normal” family of three children could be comfortably supported, and that would in fact result in paying the costs of vast numbers of children who do not exist.

But the experienced woman high-school teacher without dependents feels she should be paid as much for her equal work as her male colleague who does have a family to support. We recognize the abstract justice of her position, but the present wage system has no solution except subterfuge or compromise. Either the double salary standard is maintained (often unjustly, since it sometimes is the man who is fancy-free and the woman who has the dependents), or men are given administrative positions so that they can be paid adequate salaries, or professions like teaching and social work, where the unattached woman largely establishes the salary level, fail to attract or to retain many competent men. If children’s allowances were available, either nationally or in the local school system, it would be much easier to establish a salary level based upon quality of work and ordinary needs, and still retain teachers with larger family responsibilities.

The first governmental recognition of children’s allowances, aside from reports of foreign developments which the Monthly Labor Review has carried with particular care, was the definite proposal of the National Resources Planning Board in January, 1942, that “family allowances” be included in the post-war program for raising living standards and securing full employment. Both the term and the idea were then so new in America that this proposal raised scarcely a ripple, and few persons who read the report were even remotely aware of its possibilities.

Later in 1942 the Beveridge Report, placing children’s allowances first among its three assumptions basic to social security, encouraged the hope that now the subject might at least be fully discussed in America. Those of us who knew a report of somewhat similar scope was already running through the presses in Washington awaited its release with lively interest.

In March of this year the President released to Congress this report, entitled Security, Work, and Relief Policies. This five-pound document of half a million words failed to include any mention of children’s allowances. Indeed, the numerous constructive proposals which this report contains are so lost in technical verbiage that only a few courageous students have ever waded through the whole of it. The British Beveridge Report, when briefly forbidden to the armed forces, created a national scandal, while our own allegedly similar document could probably not be forced down a typical doughboy’s throat for even an extra week’s pay.

Why did this lengthy report on American social security fail to consider children’s allowances? Some of the persons responsible for framing it were asked just that question in New York in early June. Reference was made to administrative difficulties because of the forty-eight states, and Mr. Altmeyer, Chairman of the Social Security Board, after referring to the large proportion of absolute want in Britain due to size of family, said he thought it “doubtful whether that is true to the same extent in this country.”

Another person present at this meeting was Sir William Beveridge himself. As a national guest, he referred politely to our report, to the special administrative difficulties created by our states, and to the necessity for us to find our own solutions to our problems. But on children’s allowances he went straight to the heart of the matter, without relating them only to absolute want or putting five pounds of other considerations ahead of them. Said Sir William: —

Finally, children’s allowances are really necessary to give equality of opportunity as between the child in a small family and the child in the large family. If you want equality for all individuals, you can’t do without children’s allowances. That is the argument which does influence us in Britain. You may take the principles of children’s allowances as accepted in Britain and the fact that it is the greatest revolution of all resulting from my report.

4

WE ARE at war. It is abundantly clear that the present Congress and probably the people in general are in no mood for reform for reform’s sake. We have a sublime and probably mistaken faith that the golden tomorrow can be built tomorrow, and our tree of hope will burst into full leaf, ready to shade us, even if we neglect planting the seeds today. This is a dangerous attitude, but we may as well take it for granted that social problems in this country will receive little attention unless they are directly related to the war effort.

That, however, is precisely the reason for stressing children’s allowances now. In time of peace, they might await the long research they deserve into problems of administration, sectional differences, alternative possibilities such as payment “in kind” (school meals, shoes, and so on, instead of cash), and ultimate effects on population. Now they are put forward as an important and possibly indispensable element in financing the war.

We all know that the money we are free to spend must soon be reduced to the amount of goods — outside of tanks, airplanes, and other war supplies — we are still able to make. That is common sense and orthodox economics. Spare money in people’s pockets is the floodwater of inflation which will break through any dam of price control or rationing we attempt to set up. The Nazis themselves are not able to suppress black markets, and every American housewife knows how widely ceiling prices are being violated. Apparently the only effective way to avoid severe inflation is to bring the spendable part of wages and income down to the value of consumers’ goods we are currently producing.

The government is trying to absorb excess income with heavier taxes, voluntary savings, and other devices, including the freezing of wage levels. All these measures run head on into one central and immutable fact: when we are all reduced to necessities, needs vary radically with family size.

Here again is my friend on the coal truck, Joe Corrigan. Milk in Joe’s town goes up 2 cents a quart. Mike, the unmarried driver on the truck next to Joe, drinks a quart of milk a day, and his wages have to be increased the negligible amount of 14 cents a week if he is to be as well off after the milk increase. But Joe, with his wife and eleven children, consumes thirteen quarts a day, and his wages have to be increased $1.82 a week simply because milk went up 2 cents.

Joe demands a wage increase of $1.82 so that his children may have milk, and few will blame him. If he gets it, Mike, who hauls just as much coal, demands the same increase. If he gets it, then Mike has the increased price of eighty-four unused quarts of milk jingling around in his pocket each week, crying to be spent for things we can no longer afford to make.

In practice, the result is usually a “compromise,” which fails to give Joe enough money to buy all the milk his children need, and yet gives Mike considerable excess spending money. In times of peace, this situation has been tolerated because Joe could apply for relief and Mike’s excess money could be siphoned away with horses that lost by a nose, luxury gadgets, and other devices. In time of war the excess money threatens national disaster. The situation it creates is explosive and intolerable.

We are experimenting with a curious assortment of correctives. Wages are frozen, but that does not freeze families from increasing in size and needs; meanwhile milk and many other things have gone up in price. Forced savings have been proposed, and high-pressure bond drives are being conducted. Joe Corrigan, unable to feed his family on his full wages, is left feeling that he is somehow a traitor to his country and a blot on his company’s record.

A sales tax is being considered. Such a tax, to achieve substantial returns, would have to go down into foods and other daily necessities, and wage earners with large families would be paying the great bulk of the tax, both in dollars and in proportion to income. We are now experimenting with holding back 20 per cent of income, but somewhat less where dependents exist. The fact is that nearly all our measures to meet the special problems of war finance run afoul of this single problem of family needs varying with family size, and we have drifted into a morass of complicated adjustments and halfmeasures instead of meeting that single problem directly and positively.

I propose, primarily as a fiscal war measure and secondarily as an aid to family life, the prompt adoption of a system of children’s allowances in the United States.

5

To MAKE this proposal concrete for purposes of discussion, I suggest certain governing principles. These are not original and they are not final. They are personal judgments growing out of considerable study of the problems involved, but clearly recognizing that much further study is desirable and quite different decisions may finally be made.

1. Coverage. This should be provided for every dependent child up to the sixteenth birthday, or eighteenth if the child is in school. To keep the scheme fully democratic, without odor of relief or charity, payments should be made in behalf of all dependent children without regard to family income or status. Coverage of all children is recommended, rather than beginning with the second child as suggested in England, since it is with arrival of the first child that the mother’s opportunities for remunerative work outside the home are heavily handicapped.

2. Beneficiary. Payments should be made to the mother. There is a little more assurance that the chief benefit will go to the children, for whose welfare the allowances are intended, than there would be if payment were made to the father. There is justice, too, in mothers receiving cash income for their work; and in many families such an income will improve the mother’s self-respect and make for family stability.

3. Source of funds. Children’s allowances should be noncontributory, coming out of a central fund from general taxation.

4. Initial rate. The amount allowed should vary with the age of the child. It will probably be proportioned to the state or sectional average industrial wage. This sectional base does not achieve national equality (politically difficult even if socially desirable) but does take into account sectional variations in living costs. The rate should be kept below the costs of childrearing, which is not to be made a profitable business but to be freed from its hopeless handicaps. Probably an average of $3.00 per week per child is desirable at present price levels.

What is the cost of this proposal? There are at least two answers, each valid under certain assumptions. Let us look at the statistics first.

According to the 1940 Census, there were approximately 35 million children under sixteen years of age. Of those sixteen and seventeen years old, 68.7 per cent were attending school at the time of the Census — probably a smaller percentage now. If a round 3 million are now attending school in those ages, then approximately 38 million children are eligible under our assumption as to coverage. At an averaged $3.00 a week for 52 weeks, plus the standard estimate of 3 per cent for administration, the annual cost of the program comes in round figures to 6 billion dollars.

There are certain offsets. The children’s allowances we are paying to families of servicemen — under the 1942 Act, $12 a month for the first child and $10 for additional children, with an increased rate pending — would no longer be needed. The program of Aid to Dependent Children would likewise be a duplication which probably could be abandoned. And the relief offices would no longer need to dole out monthly sums to the Joe Corrigans. Checked estimates of these offsets do not exist, but there is no doubt that they are considerable.

To effect further savings, it will probably be proposed that children of the wealthy and middleincome groups be excluded. This would destroy important characteristics of the program, and is unwise. If it is argued that otherwise we cannot afford to pay out $3.00 a week per child, it may be replied that we already are affording $5.92 a week — in income-tax exemption — for each child of the $200,000 a year income group, and slightly less for other high-income groups. The exemption provision of the income tax could be modified, or made an alternative to direct allowances, but children’s allowances should remain a universal opportunity, like the public school, expressing the community’s concern for all children.

A program which appears to cost 6 billion dollars would have seemed utterly fantastic a few years ago, even with the substantial offsets which have been indicated. Now we are spending at the rate of more than 6 billion dollars a month for war activities alone, to destroy and not to build up, and still retain a high general standard of living. We have had to revise our economic thinking, to take into account the whole picture of resources and production instead of isolated expenditure.

From this point of view, the net cost of children’s allowances may prove completely negligible, and during the war period they may actually result in an overall saving. We need to feed and clothe all the nation’s 38 million children. We can do this by providing for minimum essentials through a system of children’s allowances which takes into direct account the number of persons and can be made immediately sensitive to price changes.

Or we can try to feed and clothe these 38 million children by the present wage system, in a war economy stripped to essentials. Then, if the cost of feeding and clothing one person a week rises $1.00, Joe Corrigan will demand an increase of $13. Any rise in the per person cost of living will result in a demand from wage earners for an increase of at least five times that amount, to take care of the mythical average family. This is an inevitable demand under our present wage system, though it results in proper increases for only a few families, inadequate wages for the Corrigans, and surplus spendable wages for the great majority of workers who have fewer than five persons in the family.

Then we scurry about, trying to absorb the excess spending money, trying to get help in some fashion for the extra young Corrigans, trying (if Congress will agree) to roll back prices by spending a billion dollars of Federal money, in order to avoid another plague of strikes, further price increases because of higher wages, and another whirl of the inflationary spiral.

It would be cheaper in money, simpler in administration, and better for families to level out most of these inequities by a system of children’s allowances.

I have stressed the economic possibilities of children’s allowances because this feature has the most immediate importance in the war situation. In the long view, human values, the relation of such allowances to healthy family life, and their possible effects upon the quality of our population may prove the major considerations.

We need to keep in mind the quite human problems of Fred Wynne, who has had only one child because he was afraid of losing his job and of being unable to feed even that one; of Dr. Duel, who has had only two children because he wished to be certain he could afford full opportunities for them; and of Joe Corrigan, who might possibly have had fewer children and given them a better home to grow up in if his situation had not become hopeless almost at the outset.

And now we need to keep especially in mind one other person, the soldier father. He has surrendered his job, he has put a moratorium on building a sound economic future, he is risking his life for his country. At the same time he and his wife are having the child they want, who must perhaps come now or never. Temporarily, the community is assuming the bare costs of supporting this child. He has his system of children’s allowances — for the duration,

When he comes back, his feet dusty from the road to Berlin or his face tanned by the rays of the Sinking Sun, what then? Perhaps he will find a job, without painful delay or selling apples on street corners, but he will need to begin at the bottom. Some years have been lost out of his life. He cannot follow a pattern once common — work several years, accumulating savings; marry, and have perhaps a year or two of both working; and then undertake the joys and costs of a family. Can he expect less from society, for which he has risked everything, than to have his child’s allowance continued into civilian life, and at least this much of his economiccares a shared responsibility?