Activists Speak Out: The Poverty of Welfare Reform

— Interview with Amy Hanauer

AMY HANAUER RUNS the Milwaukee office of the Center on Wisconsin Strategy. She previously worked as a policy analyst for State Senator Gwendolynne Moore. Dianne Feeley interviewed her for Against the Current.

ATC: What are the barriers to employment for people being kicked off welfare?

AH: The single biggest barrier is finding a decent job. By that I mean full-time work with some job security, paying a minimum of $7-8 an hour, with potential for advancement, regular raises and benefits, particularly of course health insurance benefits.

Finding a decent job is a bit less of a problem right now in the Milwaukee area, where there's a resurgence of manufacturing and construction employment and the economy is growing. But it's more of a problem in the rest of the country, and at most times in history.

We happened to get lucky in that welfare was eliminated at a time when the official unemployment rate is extremely low, but at most times in the last twenty years there would have been substantially more hardship—and there will be, in the next downturn.

After job quality, the three biggest barriers to employment are transportation, childcare and educational training.

Transport is a huge, huge problem for central city residents and can be an even bigger problem in rural areas. The bus system here isn't great at all, and our economic reality is that most of the unemployed live in the central city while the jobs are out in the suburbs.

In dealing with childcare, people are enormously resourceful, having sisters and boyfriends and mothers take care of their children, or trading child care with neighbors who work different shifts. But it remains an enormous issue, especially for single parents with more than one child.

Then there's access to educational training. Any job requires some training, especially any decent job with a career ladder; job-linked training is a very important need in our system right now.

ATC: Milwaukee has passed a living-wage ordinance. Does that have any impact on the private sector?

AH: Living wage ordinances are a great way to establish a basic floor for public sector wages, and I think eventually we'll see those floors forcing a boost in private-sector wages as well. For communities where lots of former welfare recipients are being pushed into county-level home health care jobs, or jobs with the parks department, this wage floor is a crucial component.

In Milwaukee, we're fortunate enough to have a lot of private-sector employment available, where the wages are already quite a bit higher than our living wage ordinance mandates. [Milwaukee's ordinance mandates wages of $7.70 an hour plus benefits for jobs with the school board, and $6.05 plus benefits for jobs with the city.]

I think also right now, given the economy, wages here are being pushed up because of the labor shortage, rather than because of the living wage. But especially if the economy worsens, that floor will be enormously helpful for those working in low-paying jobs, private or public.

ATC: What's the way to deal with the barriers you've described?

AH: The key is to recognize that we need to get adequate funding to pay for these services—and that this is going to be much more expensive than the old AFDC (Aid to Families with Dependent Children) used to be. AFDC was really cheap--less than 1% of the federal budget, and about 2% of the state budget.

Dealing with the barriers may sometimes mean building political alliances that are unusual, which may be our greatest hope for getting these things funded.

One thing that's true about job-linked training is that it's as much a subsidy to the employer as to the employee. So it should be possible to get employers to bring pressure on legislatures and governors for this funding.

In Milwaukee, I think we've done a good job in getting organized labor, community leaders and business leaders to sit down at the same table and push for some collective solutions. They aren't going to agree on everything—there are people there who pushed the W2 (“Wisconsin Works,” the state welfare reform) program and others who fought against it.

But they all want public money for training, transportation and child care, so that central city residents can make it in private sector jobs.

ATC: Was W2 in effect before the federal law was enacted?

AH: They were passed more or less at the same time, but the (Governor Tommy) Thompson administration has been putting through changes in the welfare system for ten years.

ATC: We understand that it's a very repressive law—but the repressive provisions haven't worked?

AH: Right. Most elements of the new law were just put in place a few months ago. Older features, like learnfare [which cuts a family's benefits if a teenage child misses school] have been really unsuccessful.

Because the economy has been relatively good, the newer elements haven't been as awful yet as some had predicted. But it puts a two-year lifetime limit on receipt of benefits, which could result in massive poverty when there aren't jobs available.

ATC: Can you elaborate on learnfare and the other repressive parts of the welfare system?

AH: The most repressive components include learnfare, two-tier welfare, the family cap and bridefare. Learnfare was found, in a state-commissioned report by John Pawasarat of the University of Wisconsin-Milwaukee, to bring about no improvement in school attendance among kids who were sanctioned, and in some cases to worsen their attendance.

Two-tier welfare pays lower benefits to those families moving to Wisconsin from low-benefit states. This is based on a misconception that people relocate to Wisconsin because of our relatively high AFDC payments.

But a 1995 Legislative Audit Bureau report found that less than one percent of welfare recipients who come to Wisconsin ranked welfare benefits as the most important reason for moving here. The main reasons ranked first were to be with family here, to escape from a bad family elsewhere or because jobs were easier to find here.

Other reasons, in order of importance, were less crime, better housing, better schools, cheaper prices, and to be near friends. Medical assistance and welfare were the least common reasons cited as “very important.” People were also equally likely to come to Wisconsin from high and low benefit states.

The family cap excludes children born while their parents were on assistance from the benefit check. Thus, a family with two kids and one parent would only get benefits for two people, if the second child was born when the mom and older kid were on welfare.

Again, this is based on a misconception that welfare families are very large, and that people have kids for the meager increase they might get in welfare payments.

In fact, the vast majority of families on W2 have only one or two kids, the fertility rate of women on assistance is lower than that of other women, and families on welfare have been steadily declining in size over the last thirty years.

Finally, bridefare reduces benefits to teenage moms who don't marry. This of course assumes that teenage moms have control over the behavior of the men who impregnated them. But it also forces girls in abusive relationships to make dangerous choices between poverty and violence.

ATC: Could you say more about the issues of providing the services you've already mentioned?

AH: Money for training is crucial. We should also make sure that the training is linked directly to guaranteed jobs, because too many women have been put through too many training programs with no jobs at the end.

Then we should ensure that the job quality, and retention of those jobs, is reflected in any incentive system for case workers. Right now in the new system in Wisconsin, case workers get credit for placing people in jobs—but that's all. They get no more credit for placing someone in a $10 than a $6 an hour job—and of course it's easier to find someone a low-paying job.

For transportation, there are different approaches. Obviously the better one, which I favor, is really supporting mass transit in a systematic way, with light rail and highly accessible bus systems. But that's a long uphill battle.

At the same time, then, we need stopgap solutions: van pools and attention to carpooling, special bus lines that can run central city people out to a factory that employs lots of people.

Then, for childcare funding: I think the best approach is simply giving parents options, money or voucher assistance to purchase the care they are most comfortable with, whether that means a family or institutional childcare arrangement.

It's complicated, because it can be a problem if the care isn't certified or monitored in some way, but the point is that more money needs to be going into child care.

We have always known that people get off welfare by themselves, and always have done so, but they don't get out of poverty—and they don't always stay off welfare. So everything we do must acknowledge that reality.

It isn't people's will to get off welfare that's missing—it's the nature of the system once they get off that's at fault.

ATC: As you see it, what are the worst features of this new system?

AH: The absolutely worst feature is the possibility of removal from assistance. It's completely ridiculous, based on a real lack of understanding of the economy.

We don't have a full-employment economy, and the new system is based on the assumption that we do, that work is out there for anyone who wants it. That isn't the case, especially in worse times than we see in 1998.

A further flaw is the lack of attention to quality of jobs, a failure to demand employment that supports families. There's the lack of attention to what I'd call the “demand side” of the labor market.

The whole premise of the new system, federal and state, is that this is a supply-side problem, i.e. a problem with the quality of the worker. Like all markets, the labor market has a supply and a “demand side” (the quality of jobs offered), and both need to be stimulated.

ATC: What do you think are the positive features, if any?

AH: Just the fact that it pays some attention to job placement. Under the old system, case workers didn't have any reason to focus on getting people jobs. This is a positive change that can't be overlooked.

One other positive by-product of the change in welfare: I think there's less demonization of low-income women, and more recognition that these are systemic issues.

ATC: A number of people on welfare who are in school have not been allowed to finish their education. They would have a good chance to get decent jobs if they could continue, but the system won't allow them the time they need.

AH: I think it's incredibly short-sighted to cut someone off education right in the middle of finishing a degree. That's been a huge problem both at the technical college and bachelor's degree level.

Yet because education isn't a right in this country for anyone, there's going to be public resentment over letting welfare recipients stay in college.

I guess I'd rather see access to undergraduate education for everyone. Just as with transit, we need universal access to these services for anyone who needs them. But at the same time we can't expect this welfare population to get back to work without providing these services.

ATC: So on balance, is the verdict on welfare reform positive or negative?

AH: Not positive. Eliminating welfare wasn't a good idea. It's absurd—implying that it's all about people's motivation to work.

That said, the previous system was fatally flawed. Lots of people were trapped, couldn't get training, transportation, childcare or jobs—and didn't have enough money to live on.

The new emphasis on work and the respect it accords to low-income women is the positive side. The problem now comes when people are working forty hours a week, and still don't have enough money to live on.

ATC 73, March-April 1998

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