WORLD

Work, not welfare

December 6 1993
WORLD

Work, not welfare

December 6 1993

Work, not welfare

THE UNITED STATES

Lois McKnight has been “on and off’ welfare for the past 30 years. During that time she has struggled on her own to raise six children—two of whom are now welfare mothers themselves. It’s a cycle, she says, that is “hellish hard” to break, which is why the McKnights—and thousands of other poor families in Wisconsin— are now worried. Starting next year, the state government will introduce a series of dramatic rule revisions aimed at slashing the welfare rolls. The measures are part of an experiment that is being closely monitored by politicians elsewhere, but McKnight wants nothing to do with it. “It’s fine for the big shots,” she says, “but we’re the guinea pigs. We’re the ones getting cut up in the lab.”

At a time when governments throughout North America are searching for ways to break the cycle of welfare dependency, Wisconsin’s reform plans have attracted widespread attention. And conservativeminded politicians are not alone in endorsing the program. Although the state governor, Tommy G. Thompson, is a Republican, the proposals could not have gone ahead without permission from Democratic President Bill Clinton. Last month, Clinton signed a waiver allowing the state to amend the rules of a federal welfare program known as Aid to Families with Dependent Children (AFDC). Wisconsin’s program, which it calls “Work

Not Welfare,” will provide physically able recipients with two years of job training, after which they will be denied benefits if they have failed to find employment. ‘This program is revolutionary,” Thompson asserts. “The idea is to help make welfare what it was meant to be—a temporary hand up, not a permanent handout.”

The prospect of suddenly finding themselves with no job and no welfare cheque has

spread fear among Wisconsin’s poor.

Wisconsin offers ‘a hand up, not a handout’

Critics of the program conjure up Dickensian images of destitution.

McKnight, 58, who lives in the state capital of Madison, says that Thompson is “just

plain nuts” if he thinks he can solve the problem of poverty by pushing people off the welfare rolls. It will take two years of education, she adds, for most welfare mothers just to gain the equivalent of a high-school diploma; even then they will need another two years of specialized job training.

A more serious problem, perhaps, is the availability of well-paying jobs. Although the state’s unemployment rate is 3.8 per cent, many of those who complete training programs will be lucky to find jobs paying more than the minimum wage of $4.25 (U.S.) an

hour, or about $8,500 (U.S.) a year. According to the federal department of health and human services, the poverty threshold is $6,970 (U.S.) for a single person and $11,890 (U.S.) for a family of three. McKnight, who now collects $517 (U.S.) a month plus other benefits, complains that a minimum wage job would not provide most welfare recipients with enough cash to cover rent, utility bills, food and health insurance. If their benefits are cut off, she predicts, “there will be 10 times the homeless.” Adds McKnight’s 27-year-old daughter, Angie, a welfare mother of four: “It’s crazy. There are a lot of people who are not ready to get off welfare and will not be ready in two years. I believe crime will increase. It will tum a lot of people bitter.”

Four other states—Vermont, Iowa, Wyoming and Georgia—are now experimenting with welfare reform, although none goes as far as Wisconsin. In each case, legislators are responding to public demands for change. As the number of Americans on welfare continues to increase—some 4.9 million families now collect AFDC benefits—there is

a widespread perception that many of the poor are simply too lazy to work. On Nov. 10, a group of Republican members of Congress proposed legislation that would allow every state to cut off welfare to

people who have been on the rolls for five years. “Some women on welfare are more consumed by the feeding of their drug habit than the gut instinct to feed their children,” said Representative Nancy Johnson of Connecticut.

Clinton is working on his own welfare reform package—one he says will “end welfare as we know it.” Like Wisconsin, Clinton’s bill will include a two-year cutoff

period, although it will almost certainly soften the blow by offering minimum-wage government jobs, such as picking litter from the side of highways, to those who cannot find work in the private sector. Administration officials say that they have not decided what to do about welfare mothers who simply

refuse to perform that sort of work. They acknowledge that any attempt to crack down in such cases would penalize innocent children. “There’s no way around that,” says Charles Murray, a scholar at the American Enterprise Institute.

For most of this century, Wisconsin has been on the leading edge of social reform in the United States. It was the first state to adopt workers’ compensation (1911), the first with unemployment insurance (1932) and the first to offer job protection to the disabled (1965). Since Thompson took office in 1987, however, the state has taken steps to tighten eligibility for welfare. It already withholds a portion of benefits from parents whose children are chronic huants, and jails unmarried fathers if they fail to seek job training and make child-support payments. In addition, the state has cut payments to single women who have more children while on welfare. Those measures have helped to reduce Wisconsin’s welfare caseload by 17 per cent in six years. Throughout most of that period, Thompson has enjoyed bipartisan support from the state legislature. “Even the Democrats have come to the conclusion they’d better get on the train,” he says.

Still, none of Thompson’s previous steps are as far-reaching as “Work Not Welfare,” which will begin next year on an experimental basis in two counties that have yet to be named. From then on, able-bodied people who collect AFDC benefits in those juridictions will have to work for what they receive. In practice, that will usually mean attending job training and education classes. The hours required will be based on the cash value of food stamps plus the applicable AFDC grant, divided by the $4.25 federal minimum wage. Under the formula, a typical mother of two, receiving AFDC benefits of $517 a month and food stamps valued at $212 a month, would be required to work a 40-hour week. After two years, her regular welfare payments would end, although if she was still unemployed she could continue to receive

free medical treatment, food stamps and child care benefits.

Milwaukee, Wisconsin’s largest city, will not take part in the first stage of the experiment because it already has a welfare reform program of its own, known as the “New Hope

Project.” Those who are accepted for the project are assigned a publicly funded community-service job if they are unable to find work in the private sector. On top of their wages, they receive an “earnings supplement” as well as child care and health care, at a total cost to the city of $11,000 a year for each participant. “It was the child care that made all the difference for me,” says Sheila Statan, 30, a beneficiary of the program, who has been given a job with the city’s housing department. Another participant, Diane Suggs, 34,

is now working full time for an insurance company. “I could never have done it without the project,” she says.

Over the past four months, a 32-member committee appointed by Clinton has been travelling the United States in search of suggestions for welfare reform.

Its has toured ghettos, slums and shacks from New Jersey to California, gathering testimony from hundreds of social workers, psychologists and welfare recipients. David Ellwood, the group’s co-chairman, says that about half of those who sign on for welfare leave the rolls within two years.

A third continue to claim benefits for eight or more years.

Ellwood’s own research suggests that if the two-year cutoff legislation went into effect nationally, it would leave at least 1.5 million families without welfare and without jobs. To survive, they would almost certainly need some other form of government assistance. Says Will Marshall, president of the Progressive Policy Institute, a

think-tank that works closely with the Clinton administration: “It isn’t cheap. You may well end up spending more, at least in the short run, to move people to work.”

But in spite of the initial high costs, the political climate is obviously right for welfare re-

form. And while traditional Democratic constituencies—organized labor, blacks and the poor themselves—are sure to oppose any Wisconsin-style plan, Clinton appears willing to ally himself with Republicans to pass welfare-reform legislation—the same tactic he used to secure mid-November passage

through the House of Representatives of the North American Free Trade Agreement. Administration officials point out that the number of families receiving AFDC has increased by a million in the last five years alone. “There must be a time certain beyond

which people don’t draw a cheque for doing nothing when they can do something,” Clinton said in a speech last February to the National Governors’ Association.

Social-service advocates are appalled by such sentiments. Tarry Farmer, who runs a community development corporation in Greenville, Miss., goes so far as to predict that programs modelled on the Wisconsin experiment could provoke violent protests. Complains Warrine Pace, who counsels welfare mothers in Chicago: “In two years, they’re supposed to make this leap. If they’re not ready,

they leap into the water.” She talks about child mothers who dropped out of high school and,

now in their 30s, still ask questions like: “If I move to New York, do they use the same money we have here?” Ready or not, however, there can be little doubt that drastic welfare reform is on the way.

WILLIAM LOWTHER in Washington