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NATIONAL
JOBS FOR ALL COALITION Special
Report 2 © February 2002
The
Right to Work and to Welfare
by Gertrude Schaffner Goldberg,
Professor of Social Policy, Adelphi University School of Social
Work and Chair, NJFAC and Sheila D. Collins, Professor
and Chair, Political Science Department, William Paterson University,
and member, NJFAC Executive Committee.
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 even
without welfare reform. And, on close examination, the statistics
on jobs, wages, and income security, during the prosperous times
of the late 1990s, are 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.
Recent research, including that of the Washington-based Economic
Policy Institute (EPI), confirms the validity of this common-sense
perception of what it really costs to achieve a minimally-decent
standard of living. For example, nationally, the median cost of
EPI's basic family budget, one that includes the minimum necessary
costs for safe and decent housing, food, health care, child care,
transportation and other household necessities, and accounts for
all taxes, is $33,511 for a two- parent, two-child family. This
is nearly twice that of the official federal poverty line of $17,463
for a family that size, and substantially more than the earnings
of the typical low-wage worker. The cost of the EPI budget, lower
in some communities, is roughly 40 to 55 percent higher in others,
including many with large welfare populations, such as New York
City.
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
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 (Washington) reports that, in nearly every
state, a majority of poor families have one or more adults who
are employed. These poor families 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-despite
the economic boom.
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 year of 1999, 30 million people were jobless, forced
to work part-time, or worked year-round for less than the four-person,
Federal poverty level. Thus, a wide range of policies is needed,
ones that will serve a much broader constituency than simply the
welfare population.
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 vital care
of young or frail family members to practice the work ethic. It
means full employment.
What is full employment? Full employment is a qualitative as
well as quantitative concept. It not only means that there should
be more available jobs than job seekers. It calls for a living-wage
job, benefits such as universal child care 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? Aid to Families with Dependent
Children, which operated from 1935 until its repeal in 1996, was
deficient in a number of respects. Nonetheless, AFDC provided
an alternative to hunger. And it meant that many poor mothers
were not forced to take any job at any wage in order to clothe,
feed and shelter their families. 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 originally proposed by the New Dealers who
planned the Social Security Act and 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, child care must be guaranteed to all families.
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
reigned, 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. Strengthen the unemployment insurance system by raising wage-replacement
rates and greatly increasing the proportion of the unemployed
who are eligible. Create jobs for the unemployed at wages comparable
to those paid for similar private-sector work.
3. Make work pay by raising the minimum wage to at least $7.50
an hour, equivalent to its peak value in 1968, and index it to
average wages.
4. Support and extend "living wage" ordinances to the
national level. (Living Wage Ordinances require firms doing business
with governments to pay all their employees at least a decent
or living wage.
5. Guarantee affordable quality child care to all parents regardless
of their welfare or income status, 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 education and training for all people
unable to get jobs due to lack of preparation for work--regardless
of their welfare status.
7. Restructure benefits as care allowances to recognize work
done in the home caring for the young and the frail of any age.
8. Raise benefit levels to a standard commensurate with health
and a decent standard of living.
9. Institute a universal health insurance system--one covering
the whole population.
10. Create a national housing program to guarantee decent, affordable
housing for all people and to create socially useful jobs for
the unemployed.
The requirements of real welfare reform have not been changed
by terrorism and war, and they may not necessarily be more difficult
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 also threatened,
as they are now. The unemployed need an adequate system of unemployment
benefits but they need more than that: 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.
In the final analysis, the obstacles to full employment and jobs
at livable wages are not primarily economic or technical. Economic
and technical rationales are the excuses political and economic
elites use to avoid facing what is at heart a moral and spiritual
issue--their inability to share more equitably the common wealth
of the nation. As the United States enters the twenty-first century,
richer than ever before in its history, it has the opportunity
to provide to all its people that source of dignity and security
so essential to democracy and international peace--and so long
avoided by American policymakers--a socially useful job at a living
wage. It could fulfill the dream of an "Economic Bill of
Rights" that Franklin Roosevelt proposed more than a half
century ago, when this country was very much less wealthy, and
which began with the essential guarantees: "the right to
a useful and remunerative job" and "the right to earn
enough to provide adequate food and clothing and recreation."
And also included the right to decent housing, adequate medical
care, and a good education. The Economic Bill of Rights recognized
that "true individual freedom cannot exist without economic
security and independence." The realization of these economic
rights would make it easier to solve most of the serious social
problems that continue to plague us. The paramount question is,
then, do we have the political will?
Professors Goldberg and Collins are authors of Washington's
New Poor Law: Welfare "Reform" and the Roads Not Taken,
1935 to the Present, New York: Apex Press, 2001.
For further reading on full employment and related issues, visit
the website of the National Jobs for All Coalition: http://www.njfac.org
Editors: Helen Ginsburg, Economics (Emer.) Brooklyn
College, CUNY and June Zaccone, Economics (Emer.), Hofstra University
© 2002,
National Jobs for All Coalition |
