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Five years of welfare "reform"
Punishing the poor

July 20, 2001 | Pages 8 and 9

In this Socialist Worker special report, ERIC RUDER looks at how welfare was gutted in Wisconsin--and the impact on people struggling to get by.

FIVE YEARS ago, President Clinton fulfilled his promise to "end welfare as we know it."

With a lot of fanfare about freeing poor women from dependence on government handouts, Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act in August 1996. With the stroke of his pen, he eliminated a 60-year-old program, known as Aid to Families with Dependent Children (AFDC), that provided support for the poor.

In its place, the federal government told states to come up with new programs--but ones that followed strict guidelines, including time limits for recipients and required work programs for almost anyone who got benefits.

As the country's welfare rolls shrank, the politicians crowed about their success. They said that the lowered caseloads proved people simply needed to be pushed to get jobs.

But shrinking welfare rolls don't tell the whole story. While many former recipients have found work thanks to an expanding economy, their McJobs don't pay enough to keep them out of poverty. And no one knows exactly what's happened to hundreds of thousands of people who've dropped off public assistance--because the politicians don't care enough to find out.

George W. Bush's Health and Human Services secretary, Tommy Thompson, knows this well.

As the former governor of Wisconsin, Thompson was hailed as a pioneer of welfare "reform" efforts--based on his Wisconsin Works (W-2) program, one of the first in the country to impose time limits and work requirements.

But shortly before leaving Wisconsin to join the Bush Cabinet, he blocked funding for a study to investigate what happened to women who dropped out of the W-2 program.

Barbara Ehrenreich, author of Nickel and Dimed: On (Not) Getting By in America, says this is typical. "I think there's been a consistent effort on the part of the public sector and politicians to cover up the reality of what's been happening with welfare reform," Ehrenreich told Socialist Worker. "There are reports from all over the country--the American Friends Service Committee, for example, issued a report about a month ago--that finds increased levels of hunger among women who have left welfare. "Across the country, shelters have been maxed out, and they're talking about welfare reform as one of the causes."

With five-year lifetime limits on benefits looming for many recipients, the cruel consequences of welfare "reform" are hitting home.

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SHANDRAE McCAIN had a full-time job in Milwaukee as a scheduler for nurses. Then her employer lost contracts with several hospitals--and cut Shandrae back to 12 hours a week.

When she couldn't find another job quickly, she applied for welfare. But she didn't qualify for W-2—or rather, because of her record of full-time work, she was overqualified.

"We got large numbers of people off the AFDC caseload by simply finding them job-ready," explains Milwaukee attorney Pat DeLessio, who handles cases where people have been wrongly sanctioned or cut off W-2.

"Within the AFDC caseload, there were always large numbers of people who had worked mainly in fast-food restaurants, nursing homes, motels, temp agencies, school bus drivers--jobs that don't pay a living wage, jobs that are often temporary, jobs where hours fluctuate. "So if you worked one month for a temp agency, but next month, they didn't have any work for you or your kid was sick, you could go on AFDC. W-2 wiped that out."

As for Shandrae, two months later, she's still looking for work--and she wonders why she was punished by a system that's supposed to reward work. "I can see if I just up and quit my job, but that wasn't what happened," she says. "I don't think it's fair."

But even for those who qualify for W-2, there are few success stories. Of those who left W-2 at the start of 1998, 25 percent were back on cash assistance within 18 months. And two-thirds of those who continued working were living below the poverty line--which is set at a meager $16,400 for a family of four.

While the state's welfare rolls dropped by more than half in W-2's first three years--life has gotten worse for Wisconsin's poor.

In the two years before welfare "reform," the income of single parents in the lowest income bracket grew by about $1,000 a year, according to a report by the Center for Budget and Policy Priorities. But since the cuts were implemented, this group's income has fallen by 7 percent, mostly due to the loss of benefits.

"Let's not kid ourselves," says Ellen Bravo of Milwaukee 9to5, a women's advocacy group. "W-2 wasn't set up to get people out of poverty. It was set up to get people off welfare."

W-2 put recipients into three main types of work—transitional jobs, largely for disabled people; community service jobs, where people work for benefits by cleaning public housing, working at state or local agencies and so on; and trial jobs, where participants work for private employers, but instead of earning wages, they get benefits paid out of W-2 funds.

Participants who aren't "work ready" must earn benefits by taking part in job training or educational programs. But DeLessio says that W-2's training and education programs are just hype.

"When you ask for statistics, like how many people learned welding, there are no statistics," DeLessio told Socialist Worker. "The state can't give you anything, the W-2 agencies can't give you anything. So mostly the kind of jobs people are placed in are just make-work jobs—or work that isn't going to lead you anywhere."

What's more, W-2 is administered in Milwaukee by five private firms with state contracts to deliver welfare services. As a result--like many privatized services—W-2 is less efficient than the old system.

"In Wisconsin, 20 percent of welfare funds used to go to administering the program, and 80 percent to recipients," said Alfredo D'Avila of the Center for Third World Organizing. "Now 30 percent goes to recipients, and contractors get 70 percent. We're looking at a major transfer of wealth from poor people to corporations."

DeLessio says that some of the agencies getting W-2 money used to be advocates for the poor, but have effectively become enforcers. "They probably wouldn't agree with me, but I think our state did a very good job of buying off their opposition," says DeLessio.

Across the country, welfare "reform" has produced the same results--punishing the poor for being poor.

A survey of some 1,500 welfare recipients in 13 states found that more than one-third had been slapped with punishments for missing work assignments or being late.

Meanwhile, welfare repeal does nothing to address the fact that many jobs don't provide families with a living wage. Millions of people--fully one-third of U.S. workers--make less than $8 an hour.

And just as the economy is going from boom to recession, the federal government's five-year lifetime limits on welfare benefits are going to kick in--except in states like Wisconsin, where stricter time limits have already thinned the rolls.

It's time to revive the slogan of the 1960s welfare rights movement: "Welfare is a right! Fight, fight, fight!"

"It's a way of life that I don't want"

LaKEYLA MOORE, a 26-year-old mother of four and resident of Milwaukee, talked to Socialist Worker about her experiences on W-2.

I'VE BEEN working with a temp agency for three years. Sometimes they won't have any assignments, but your rent still has to get paid, and you still have to eat. So I've been off and on W-2.

Now I'm working on my education, and I like that. Before when I was given a work assignment, they wanted me to fold socks for eight hours. And if you didn't show up to fold your socks or T-shirts, you got sanctions.

So if they're treating you like total garbage and you want to walk off, you won't get paid. That's how I would end up back at the temp service. The temp jobs made me feel like I was doing my part, bringing home a decent paycheck.

They had some of my friends picking dandelions off the highway. I'm thinking, is this jail work or what? This is just $673 a month--for 40 hours a week. Some jobs I've had I've made almost $600 a week.

If I didn't have any kids, the system wouldn't have me involved in it. Before W-2, I signed up for AFDC when I didn't have work. I'm not going to say AFDC was cool, but I could stay home and make sure my kids were taken care of.

Out of the 21 months I've been on the program, I've actually received a check about six of those months--because some months I got temp work.

But all of those 21 months still count against my two-year time limit. Let's say I'm in my forties, but I hit my lifetime limit years ago. I think that's crazy because if I get injured, who's going to take care of my kids?

God knows I wish I could go back to work. There are things you can't do on W-2. A trip to the movies--stuff like that you've got to cut out.

Something's got to give--the rent, lights and gas have got to be paid. So you look at stuff like that as a privilege. It's a way of life that I don't want to get used to.

"The system is demeaning"

WHILE REGINA waited at a Milwaukee agency to see her caseworker, she talked to Socialist Worker about her desperate situation.

I'M DOWN here now to receive food stamps. Whatever they allot me, it's not going to take care of me for the rest of the month. But you have to do it.

Years ago, I was on welfare, and it was different. You could go to school and work. I had one child, and I was receiving $440 a month.

But there were problems. At my job, I grossed $441.28. I'll never forget that--$1.28, and it was $1.28 too much, and so they cut me off the next month. That's what I earned in one month at a minimum-wage job. And that's not what you take home. After taxes, I made a little more than $300.

How can a system force you to work, but if you gross $1.28 over, then you're cut off?

The system is demeaning and degrading. It takes away your pride. I was a multi-spindle spool machine operator. I was doing it for almost a year. But because of torn disks in my back and hyperthyroidism, it was impossible to do the job that I was doing.

I'll have to take anything that I can get, but I'm a machinist by trade. And to take a job that's paying $4 an hour less--that's difficult. I was making $11.50 an hour, and now I've got to start all over. It's tough. You're looking at a person that may be in a shelter as of tonight.

Get out of town!

CALIFORNIA HAS a novel way to reduce poverty. Some counties are offering welfare recipients money and a one-way ticket out of town.

Frank Escobar, the head of MOVE--which supposedly stands for More Opportunities for Viable Employment, but you get the idea--says he came up with the scheme after he overheard a conversation between his boss and her sister in Ohio. Escobar's boss was complaining about the lack of jobs in California, and her sister said, "We have more jobs than people."

In a reversal of the old adage "Go west, young man," the plan was hatched to convince recipients to "go east." So far, 750 people have left California with the help of MOVE--sent away with a small sum of money and some friendly "advice." Don't come back.

If the message wasn't already clear, there are penalties for anyone who finds that they can't make ends meet elsewhere. Any money given for the move to people who return is counted as an "overpayment of benefits."

According to Escobar, the only reason people might return is that they were trying to take advantage of the system. "In cases where people just went on a joy ride, the welfare fraud unit would investigate," Escobar told Britain's Guardian. "It's not for winos and dope addicts."

Most of the people that MOVE has driven out are Spanish speakers--who find many jobs closed to them where they move to. But Escobar encourages them to move to Kansas, Iowa and Nebraska, where they can work as farmworkers--or better yet in meatpacking, where companies are recruiting immigrant workers because they're less likely to organize against increasingly dangerous conditions.

Joseph Penbera, a senior economic adviser for Fresno County, is disgusted by Escobar's scheme. "To make a serious dent, you would have to ship out whole towns of 10,000 or 12,000 folks at a time," he said. "We've lost our national conscience when it comes to people who have fallen through the cracks."

Brought to you by Democrats

WITH PRESIDENT Bush pushing an aggressive agenda to make the rich richer, the need for an alternative is urgent. But the Clinton years show that the Democrats take their orders from the same corporate backers as Bush.

During a trip to Chicago a few years after welfare "deform" was passed, Clinton praised the CEOs of United Airlines, UPS, Burger King and Sprint for their "enlightened self-interest."

What were their generous deeds? These companies hired welfare recipients--and received $8,000 each from the federal government for their troubles!

Eli Segal, president of the Welfare to Work Partnership group and a supporter of "reform" schemes, was honest about what the bosses are interested in. "This isn't about charity or corporate responsibility," Segal said. "It's about the bottom line."

In fact, Clinton was able to deliver something that the Republicans never could. Whenever Ronald Reagan tried to cut welfare, he was rightfully attacked by liberals for pushing a racist, blame-the-victim agenda.

But when Clinton joined with former House Speaker Newt Gingrich to enact welfare "reform," fellow Democrats and liberal groups wouldn't criticize him.

Children's Defense Fund head Marian Wright Edelman called the welfare bill that Clinton signed in 1996 an "obscene" violation of "God's mandate to protect the poor and weak." Yet she remained a loyal friend of Clinton who worked to reelect him just three months later.

In fact, a truckload of so-called liberals--including Sens. Russell Feingold (D-Wis.) and Tom Harkin (D-Iowa) and Rep. Nita Lowney (D-N.Y.)--voted with the Republicans to pass welfare "reform." "Sometimes in order to make progress and move ahead, you have to stand up and do the wrong thing," said Rep. Gary Ackerman (D-N.Y.) in explaining his support for the bill.

In reality, the Democrats were doing the bidding of Corporate America--which enthusiastically supported welfare "reform."

The Wisconsin Restaurant Association, for example, was a big supporter of W-2 because it wanted a pool of workers desperate for a job at any wage--at precisely the time that low unemployment in Wisconsin was driving up wages. This shows why the welfare cuts hurt all workers.

By creating a situation in which people have to take any job, employers can get away with paying non-welfare workers lower wages, too--creating a ripple effect throughout the job market. What's more, many welfare-to-work programs like W-2 require participants to cross a picket line in the event of a strike--or face sanctions.

And in cities like San Francisco and New York, thousands of welfare recipients have been put in jobs previously performed by union city workers--but paid a fraction of the union wage.

Despite this appalling record, however, organized labor spent massive sums last year trying to get Democrats elected.

Unions need to spend their money on organizing. Rebuilding a fighting labor movement--that can win justice on the job as well as push for other reforms like an increase in the minimum wage--is the way to address the poverty that millions of working people can't escape.

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