Welfare Reform: in Good Times and Bad, by Gertrude Schaffner Goldberg and
Sheila D. Collins
Welfare reform — really,
welfare repeal — got underway in 1996 as the economy was beginning to take
off. Politicians on both sides of the aisle have now proclaimed it a success.
But what is the basis for this claim? A welfare official from Connecticut
was only more candid than most of his fellows: “We have to remember that
the goal of welfare reform was not to get people out of poverty, but to
achieve financial independence, to get off welfare.” With the current
law about to expire and a re-authorization debate about to begin, now is
the time to review what has been accomplished and what needs to be done.
The welfare rolls have been
very substantially pared, or, some would argue, purged. However, in an
economic boom like the one that is now over, they would have been reduced
substantially without welfare reform. And, on close examination,
the statistics on jobs, wages, and income security, even during the prosperous
times of the late 1990s, were not encouraging.
The 1996 law sought to reduce
dependence on welfare. However, to most Americans, financial independence
means something beyond simply not collecting welfare; it means being able
to meet the basic needs of oneself and one’s family at some minimally adequate
level. When asked in surveys how much a family of four would need to live
at such a level, most Americans give an average figure that is at least
twice the income that the Federal government designates as the official
poverty level. The recent work of sociologist Diana Pearce, Jennifer
Brooks and others in creating “Self-Sufficiency” standards, as well as
the work of the Economic Policy Institute in developing subsistence family
budgets for different types of families in different locations, have given
us a more accurate idea of how much families need to earn in order to meet
their basic needs. According to the Self-Sufficiency standard, a
family of three — a mother with one pre-school and one school-age child
— in the borough of Queens would have had to earn $45,836 in 2000 to meet
its basic needs. This is more than three times the federal poverty
level of $13,874 for this size family and far more than what a full-time
worker earning minimum wage and collecting the Earned Income Tax Credit
could make — $16,478 in the year 2000. Even the Basic Family Budget
of EPI (a bare subsistence standard) is twice the official federal poverty
level and substantially more than many low-wage workers earn.
Surveys show that most of
those who leave the welfare rolls for work are not achieving this common
sense definition of financial independence. Those who do find work
are making just slightly above the minimum wage. One of the most
recent nation-wide studies, for example, shows that the median wage for
workers whose families left the welfare rolls between 1997 and 1999 was
$7.15 an hour, only slightly above the Federal poverty level for a family
of three. Even with the Earned Income Tax Credit and food stamps,
their median annual earnings were only $17,388 in 1999, far below both
the Self-Sufficiency standard and EPI’s Basic Family Budget. Further,
many of these welfare leavers have not found full-time, year-round work.
The Center on Budget and Policy Priorities reports that, in nearly every
state, the majority of poor families have one or more adults who are employed
and are thus experiencing poverty despite work. With or without full-time
work, many families have to depend on food pantries and homeless shelters.
Indeed, reports from the U.S. Conference of Mayors and many others show
that demands on these services have increased yearly since 1996.
The real test of welfare
reform, a period of slower growth or recession, is now upon us. Unemployment
was already on the rise, almost at the five percent level, when the economy
was shaken by the tragic events of September 11. With a country distracted
by the fear of terrorism and the fever of war, the needs of poor families,
never high on the agenda, are at risk of further eclipse. And the
debate over reauthorization of the welfare law looms. In our recently-published
book, Washington’s New Poor Law: Welfare “Reform” and the Roads Not Taken,
1935 to the Present, we detail the chronic unemployment and underemployment
for both men and women that is at the root of the welfare problem. Even
in the boom times of 1999, 30 million people were jobless, forced to work
part-time, or worked year-round for less than the four-person Federal poverty
Welfare “reformers,” seeking
to change “welfare as we know it,” succeeded in repealing the welfare entitlement
for single-mother families. What these facts say to us is that we
must change “work as we know it.” Real welfare reform requires not
only an adequate package of safety net measures, but reform of the labor
market. It means, above all, an entitlement to work, a guarantee of living-wage
jobs for all who want to work, an opportunity for all not occupied in the
home with care of young or frail family members to practice the work ethic.
Full employment is a qualitative
as well as quantitative concept. It calls for a living-wage job, benefits
such as child and health care, and income support for those providing vital
care at home. Sustained tight labor markets, moreover, give workers the
power to gain more humane working environments and education and training
opportunities conducive to upgrading.
What about the entitlement
to welfare? Pre-1996 Aid to Families with Dependent Children, although
deficient in a number of respects, provided an alternative to hunger and
the need for many poor mothers to take any job at any wage. It was
a refuge for minority families rendered economically dependent by discrimination,
low wages, and chronic unemployment and underemployment. However,
not the least of its deficiencies was that AFDC benefits failed to meet
the standard proposed by the New Dealers who initially stipulated that
benefits provide “a reasonable subsistence compatible with decency and
health.” Further, AFDC benefits were largely confined to single-parent
families, leaving nearly all families with two, able-bodied parents without
support. Since it is unlikely that we will achieve full employment
at decent wages in the short term, such an entitlement to welfare should
be extended to all needy individuals and families, not simply to one category
of the poor.
What kind of a social welfare
system would fit an entitlement to work? First, universal child care
must be guaranteed. Second, work itself should be redefined to include
pay for vital family care of the very young, the frail elderly, and the
disabled. And need we mention universal health care?
Some social welfare programs,
it should be noted, are fertile sources of employment and contribute to
the achievement of jobs for all. Clearly, public assistance or what
is usually called “welfare” — as contrasted with the full range of social
welfare programs we are suggesting here — would be residual in a full-employment
economy. Yet, even where near-full-employment reigns, as in several
of the Nordic countries, public assistance has been a consistent, though
distinctly residual, component of a broad social welfare repertoire.
Thus, an entitlement both
to work and to welfare is necessary for true welfare reform. We advocate
the following principles for a program of “welfare repair”:
1. Provide public
assistance to anyone unable to find a job that is accessible, roughly matches
their qualifications, and pays a living wage.
2. Create jobs for
the unemployed at wages comparable to those paid for similar private-sector
3. Make work pay by
raising the minimum wage to at least $7.50 an hour, equivalent to its peak
value in 1968.
4. Support and extend
“living wage” ordinances that require firms doing business with city governments
to pay all their employees at least a decent or living wage.
5. Guarantee affordable
quality child care to all parents who need it in order to be employed or
participate in education and training, and prohibit states from requiring
welfare recipients to take work assignments in the absence of quality licensed
care for their children.
6. Provide opportunities
for basic education and training for those people unable to get jobs due
to lack of preparation for work.
7. Restructure benefits
as care allowances to recognize work done in the home for the young and
8. Raise benefit levels
to a standard commensurate with health and a decent standard of living.
The requirements of real
welfare reform have not been changed by terrorism and war, and they may
not necessarily be more difficulty to achieve. One consequence of
the changed political climate may be a renewed faith in the ability of
government to address people’s problems, and, notwithstanding how slowly
the House of Representatives seems to be getting the message, it may even
have put the “free market” in its place. Job creation programs, now
even more important than in the past decade, have wider political support
when the jobs and incomes of the non-poor are threatened, as they are now.
The unemployed need a work benefit, a chance to rebuild what has been destroyed,
and an opportunity to help meet vital neglected needs for housing, child
care, health, education, etc. A standby job creation program is a
sound economic as well as social policy, expanding when unemployment increases
and contracting when the economy picks up.
Goldberg is Professor of Social Policy and director of the doctoral program
at Adelphi University School of Social Work and Chair of the National Jobs
for All Coalition. Sheila D. Collins is Professor of Political Science
at William Paterson University and co-founder of the National Jobs for
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