Just as Communists, radicals, and progressives traveled to Moscow in the 1920s to see socialism being built in one country, so are politicians, policy analysts, and journalists today arriving in Wisconsin to see the welfare state being dismantled. The BBC, the London Observer, and leading Japanese papers have all sent correspondents there. So have most major American news organizations, including The New York Times, whose Jason DeParle has taken up part-time residence in Milwaukee to report on the state’s “workfare” system.
What is occurring in Wisconsin is one of the most far-reaching social experiments in modern American history. Years before President Clinton signed the welfare law of 1996, replacing Aid to Families with Dependent Children with a program of time limits and work requirements, Wisconsin began overhauling its welfare system. In a more radical step, the state in September 1997 introduced the plan called Wisconsin Works, which requires everyone (with few exceptions) to work in return for cash assistance. In addition, W-2, as it’s known locally, imposes strict limits on how long one can receive that assistance.
The number of people on welfare in Wisconsin has dropped sharply, from around 100,000 cases a decade ago to fewer than 9,000 today. (The welfare caseload nationally has dropped 47 percent since January 1994.) At a Manhattan Institute forum, “Next Steps in Welfare Reform,” held in April, Lawrence Mead, a professor at New York University and a longtime proponent of welfare reform, called the Wisconsin program “absolutely revolutionary.” It was, he added, “the most positive development in American social policy, I think, for about forty years.” In Wisconsin and other states, he said, “there’s a notable lack of acute hardship. We do not see families on the street, rises in homelessness, foster care and so on…. On the contrary, we see, on balance, major improvements in the condition of the poor and the near-poor.”
The keynote speaker, Wisconsin’s Republican governor Tommy Thompson, was even more enthusiastic. “We’re shucking the status quo,” he said. “We’re tearing down the old and the outdated. We’re building the bold and embracing the daring.” The states, Thompson went on, “are showing that welfare reform is working and it’s more successful in helping the poor than the old entitlement programs such as AFDC. And no state epitomizes the success of American welfare reform more than my own state of Wisconsin.” W-2, he asserted, is “a model for the nation to follow.”
Already, other states and cities are copying it. In New York City, for example, Mayor Giuliani has brought in Jason Turner, an architect of the Wisconsin program, to reform the city’s welfare system. Under Turner’s direction, New York is transforming its welfare offices into job centers, with applicants expected to seek a paycheck rather than a welfare check. Since March 1995, when the number of cases was at its peak, nearly 500,000 New Yorkers have left welfare.
A great deal, then, is riding on the Wisconsin experiment. How accurate are the claims being made on its behalf?
Driving around Milwaukee this past May, I had a hard time finding its inner city. Milwaukee lacks the crowded tenements of New York and the towering projects of Chicago. The typical ghetto dwelling is a solid-looking duplex house situated on a small plot of land. Youths tend not to hang out on street corners, and panhandlers are relatively rare. But the poverty here is acute. Inside, those duplexes are often squalid and depressing, with as many as five or six families crammed together. Crack, which came later to Milwaukee than to many other large cities, continues to exercise its malevolent attraction. During my stay, the Milwaukee Journal Sentinel ran a front-page article about the “House of Doom,” a fetid crack house full of prostitutes and children.
Milwaukee has long been Wisconsin’s welfare capital. Of the nine thousand families remaining in W-2, 80 percent live in Milwaukee County. Historically, benefits were so high here that the city attracted single mothers from Chicago, ninety miles to the south. “They used to put posters in the Greyhound Bus depot down in Chicago that said go to Wisconsin for $18.50 [and] you can increase your welfare allotment by at least $175 a month,” Tommy Thompson said in his talk at the Manhattan Institute.
In that talk, Thompson described how, soon after becoming governor, he began inviting welfare mothers to his residence to tell him their stories. From them, he concluded that the welfare system had fostered dependence and needed to be fixed, and so he began asking for and receiving waivers from the federal government to experiment with changes in delivering AFDC.
Initially, those changes were modest. But Thompson made large claims on their behalf, and in 1993 several Democratic legislators—frustrated by the favorable attention he was receiving—introduced their own bill, which would commit the state to phasing out welfare and replacing it with a work program. The Democrats in the State Assembly—many of whom wanted to show up the governor—supported the bill, and it passed without a single Republican vote. After some hesitation, Thompson—unwilling to be outflanked on the welfare issue—signed it.
The new system, introduced in September 1997, featured a four-step employment ladder. Those people deemed “job ready” by the state’s welfare officials were expected to find a job in the private sector. Those judged not quite ready would receive a monthly payment, in return for which they were expected to perform “community service jobs,” such as cleaning parks. Participants with serious problems preventing them from working were to be placed in a transitional category in which they would attend training and education classes in return for assistance. No participant could remain in any one category for more than two years, and no one could receive cash benefits for more than five years in all.
In addition to the work requirement, Thompson decided to offer some incentives. The basic monthly payment would be increased by about 20 percent, from $555 to $673 a month. (Unlike AFDC, however, the new system would not offer increased payments based on the number of children in the family.) Participants would have free access to a variety of generous services as well, including child care, health care, and transportation allowances. Each person enrolled would be assigned not to a caseworker but to a “Financial and Employment Planner” (FEP), who, in addition to determining eligibility for the program, would help in arranging training and finding work. To encourage inventive approaches to helping clients, the state contracted with five different agencies to administer the program in Milwaukee, with each setting up a job center in a different part of the city.
During my stay, I visited one of those centers, run by a for-profit company called Maximus. It occupied four floors of a renovated brick building in a commercial district on the west side of town. I was shown around by Keya Shears, a tall, young, self-assured African-American woman. Physically, the center was impressive. In a brightly lit waiting room, people were applying for cash assistance, child care, and food stamps. There was a “Wisconsin Gas Line” service to help prevent utility disconnections, a learning center full of computers, and a resource center with counselors ready to help people write résumés and prepare for interviews. At a stand packed with announcements for available jobs, I picked a few at random. There were openings for a food service worker (a high school diploma required), a utility pole inspector (paying $10 an hour), and a care coordinator for children with emotional problems (annual salary: $26,000)—all testifying to Wisconsin’s booming job market.
In the classroom area, I sat in on a session for parents. A well-dressed instructor in her forties was talking about nutrition and preparing meals, and the seven women in attendance were listening intently. When one said that she fed her kids “chicken, macaroni—the basics,” the instructor prompted, “How about green vegetables?” “Oh, yes,” the woman quickly replied, “they get plenty of fruits and vegetables.”
The class ended a few minutes before the scheduled sign-out time of 4:30, and, as the women waited, I began talking with two of them. Teresa, a forty-four-year-old Latina mother of one, told me that until February she had been working at Goodwill, earning $6 an hour, but business had slowed down and she had been laid off. Worried about paying her $460-a-month rent, Teresa two weeks earlier had applied to W-2 for assistance. In return, she was attending classes eight hours a day. Unfortunately, W-2 always waited at least a month before issuing the first check, and Teresa feared being evicted.
As I prepared to pursue the point, Mia, a twenty-year-old African-American, jumped in. “This is a good place,” she declared. “I have little job experience. They’re teaching me how to write a résumé and prepare for interviews.” Her FEP was going to help her look into job opportunities, and in the meantime Maximus was providing child care for her six-month-old daughter.
“But you have to wait so long to get your check,” Teresa put in.
“They let you know you can’t be on welfare forever,” Mia countered. “You don’t want to be dependent on a check.”
Teresa was unconvinced. “I was supposed to pay my rent two weeks ago. If I don’t pay it in five days, they’ll put me out.”
“The same thing happened to me,” said a heavyset woman sitting a few rows away. “We had to go to a shelter. We were there a month.”
“I can refer you to a good shelter,” said Mia, who again began talking about how much she liked Maximus. At this point, Keya announced that it was time to go, and the women rushed to leave. I felt frustrated. Having heard such radically conflicting views of W-2, I wanted to learn more. Yet, as I was to discover during my visit, W-2 is often the subject of conflicting views.
Consider, for instance, the central question of how mothers leaving welfare have gotten on. In January, the state issued a survey of those who had left the system in the first quarter of 1998. Of the 375 people interviewed, 83 percent said they had found paying jobs since they left the system, and 62 percent were still employed at the time of the interview. The average wage they earned was well above the minimum wage of $5.15. Encouraged by such results, state officials publicized the report.
Buried in it, however, were other, more troubling, findings. While 48 percent said they had more money now than they had on welfare, 69 percent said they were just barely making do. Thirty-three percent said that they couldn’t afford child care after leaving welfare, compared to 22 percent who said this was a problem while they were on welfare. Similar increases occurred in the number reporting difficulties in being able to buy food and pay the rent.
Oddly, the state survey provided no information about one key fact: annual income. In order to estimate annual earnings, researchers at the University of Wisconsin at Milwaukee matched the names of welfare recipients in Milwaukee County with quarterly earnings reports filed by state employers. They found that only 28 percent of those leaving welfare had projected annual earnings of $10,000 or more for two consecutive quarters. Seventy-five percent of those who found jobs lost them within nine months. Overall, only 16 percent of those leaving welfare showed earnings above the federally defined poverty line of about $16,000 a year for a family of four.
While in Milwaukee, I repeatedly heard stories of women who, after years of being stuck on welfare, had gone out and found a job. But I also heard accounts of the growing need for “food pantries”—places where free food is handed out—and about the rise in domestic violence and housing evictions. Last winter, the city’s shelters became so crowded that the Red Cross had to run overflow sites in church basements throughout the city. In all, 1,600 people were housed in these places—far more than in the past.
Who was more representative of the situation—the forty-four-year-old Teresa, worried about losing her apartment, or the twenty-year-old Mia, grateful for all the help she was receiving?
Hope House, one of the city’s main shelters for the homeless, is located in a cheerful modern building in a largely Latino neighborhood on the city’s south side. Ken Schmidt, the forty-seven-year-old executive director, has very strong views about welfare reform. “W-2 has been a joke in Milwaukee,” Schmidt told me. Five years ago, he said, the average length of stay at the shelter was seven days; now it’s thirty-four. Most of the clients have been single women who had either lost their children or left them with relatives or friends. Some had alcohol or drug problems; others had been cited for abuse or neglect; still others suffered from mental disorders.
“I don’t want to paint a bleak picture of people starving on the street,” Schmidt said. “That’s not true.” He acknowledged that many women had found jobs. Still, he said, the suffering caused by W-2 was widespread. In 1998, the shelter served food to four thousand families—an all-time high. And the Red Cross was about to open a new shelter—the first in Milwaukee in seven years. “I attribute all this to welfare reform,” Schmidt said.
Schmidt introduced me to four of his caseworkers and left me with them in the building’s conference room. The workers began pouring forth their complaints.
“A lot wasn’t in place when W-2 started,” said Gwendolyn Bush, who had been with Hope House for three years. “They started to find out that people had problems…that some were mentally ill or were substance abusers.” Michelle Mahaffrey agreed: “There’s a large group of women who are probably not going to be able to do what W-2 expects.”
Yet, even as they described W-2’s many shortcomings, the caseworkers praised its many services. The problem was that many of the women were unable to make use of them. “A lot suffer from the culture of poverty and don’t know how to take advantage of the available resources,” said Andrea Litzau.
Sheila Maas, whose job it is to assess the people who come to the shelter, recalled one client who had complained about being rebuffed by W-2. On taking a closer look, she said, “I found out that she’d gone in to the agency and left after twenty minutes—she simply didn’t want to wait. Her attitude was, ‘I’ve been homeless since I was eleven, and I’m always going to be this way.”‘
So, I asked, what was their general opinion of W-2?
“Oh, I have no objection to the overall idea,” Andrea said. “In fact, I think it’s a good idea.”
Everyone nodded in agreement. “I think it’s going to break the cycle,” Sheila said.
“For the most part, it’s worked out pretty well,” Michelle said. “There were generations living within AFDC. W-2 has stopped this within a couple of years. People are working for the first time.”
In short, these workers had many problems with how W-2 was being carried out, but they believed that the work requirement at its core was fully justified.
Everywhere I went in Milwaukee, I found support for that requirement. This was so even at Community Advocates, the state’s largest advocacy agency for the poor. The organization has three staff members dedicated to helping clients deal with W-2, and I met with one them, Ann Laatsch, a tall woman with closely cropped hair whose long flowered dress hung down to the tops of her black work boots. She told me that she had initially been opposed to W-2. “But after a while,” she said, “when I heard a few clients say how the system had worked for them, I thought, ‘Hey, it’s definitely not all bad. People do have more self-esteem in bringing home a paycheck.”‘ Community Advocates itself had hired one of Laatsch’s clients to serve as a receptionist. “She’s making $1,100 a month—nearly twice what she was getting under W-2,” she said.
Still, Laatsch said, the program had many deficiencies. She gave me a copy of notes she had typed up for a recent meeting organized by social agencies that dealt with W-2. It listed ten “barriers” within the system, including overworked case managers, the lack of genuine education opportunities, and the lag in making payments to new applicants. Of particular concern was the sharp drop in the number of people receiving food stamps and child care. These barriers had become especially serious in recent months as Laatsch’s clients became more and more troubled. The people being forced off welfare included many who were in a desperate situation, suffering from illiteracy, wrestling with alcohol or drug problems, or tending to disabled children. And many, she said, “were falling through the cracks.”
During our conversation, we were joined by Joe Volk, Community Advocates’ associate director, a cheerful man with a bushy, graying beard. Volk gave his own summary of how the state’s poor had been affected by reform: “For one third of those who were on AFDC, W-2 was a good thing. They needed a kick. Now, they’re earning nine or ten dollars an hour. The one third in the middle are probably working in the private sector, making six to seven dollars an hour. They’re having to get up at four in the morning, spend two hours taking their kids to a day-care center, then go to work, then spend another two hours picking their kids up. They’re not a whole lot better off than they were on welfare.”
The bottom third, he went on, “consists of people who don’t have a lot of skills, who have psychological or drug and alcohol problems. Landlords say things like they had a tenant on AFDC for four years, and the place was clean and the kids were taken care of. Then W-2 started, and the mom didn’t make it through the system. She couldn’t pay the rent. And she might have started doing more drugs. And things went downhill from there. For this bottom third, W-2 has been a disaster.”
Volk’s analysis—widely shared by critics of W-2—is a serious indictment of the system. For an official response, I drove the eighty miles to Madison to interview Jean Rogers, the official in day-to-day charge of W-2. For a state bureaucrat, Rogers has achieved extraordinary visibility, giving up to ten interviews a week and traveling as far away as New Zealand to discuss Wisconsin’s experience. Rogers is a gray-haired woman who wears big square-framed black glasses and bright red lipstick. She provided me one of the enthusiastic appraisals of W-2 for which she is known. The areas around public housing projects were looking much cleaner, she said, and in the mornings inner-city neighborhoods bustled with activity as people headed off to work. “Bus drivers in the heart of the city say they’re seeing dramatic changes,” she said. “People are better dressed. They’re carrying lunches. Their conversation is now about work, about meeting time deadlines.”
When I asked her about Volk’s assessment that one third of the state’s welfare population was doing poorly under W-2, Rogers frowned. “When you’re designing a policy that involves people,” she said, “you have to make sure that the policy addresses the needs of 85 percent but has enough flexibility to serve the needs of the remaining 15 percent. AFDC’s big mistake was that it was designed to address the needs of the 15 percent but was dysfunctional for the remaining 85 percent. We have roughly 15 percent that are always going to be in the most-difficult-to-serve category. They are going to require some very special services, starting with outreach to get them to come in.” For those tough cases, Rogers said, the state would consider extending its time limits. As for the rest, she said, it was necessary to acknowledge that “transition is sometimes painful.”
The gap between Rogers’s 15 percent and Volk’s one third is a huge one. There is no definitive way of knowing which is closer to the truth, but if we consider the large number of poor people who have not been able to find work, add in those who have been unable to retain their jobs, and take into account the low incomes of most of those who are no longer on welfare, Volk’s estimate seems much more accurate. And while food pantries, private shelters, and other charitable organizations have helped meet the growing need, hunger and homelessness are spreading.
(Wisconsin’s experience seems to mirror that of the nation as a whole. In a recent report on welfare reform in thirteen states, the Urban Institute found that, while a majority of people no longer on welfare have found work, they “are entering the low end of the labor market, where they are working in much the same circumstances as near-poor and low-income mothers who have not recently been on welfare.” Nearly a third of those who left welfare had returned, and a quarter were not working and had no partner working. In addition, a sizable minority said they had trouble finding food and paying the rent.)
The human toll of welfare reform became apparent to me when I returned from Madison to Milwaukee. Driving along Vliet Street, a major inner-city avenue, I spotted a group of twenty-five or so people lined up at the door of a small stone building. “Food Pantry,” a sign in front declared. I parked my car and walked over to the line. Most of those on it were African-Americans; several had children with them. “It’s been rough,” one woman with two kids told me. “They stopped my check two months ago. I’m now trying to get back into the program.” In the meantime, she had applied for food stamps. “They said I qualified for $200 a month,” she said. “That’s not enough.”
A man with a sallow face and wearing a T-shirt that said “American Cherokee” told me that he had five children and was expecting a sixth in October; if I waited until he got his food, he said, I could talk with their mother—their house was just two blocks away. After he emerged from the pantry, I headed off with him to his apartment, which was on the second floor of a standard duplex. The place was airy and sunny but stark, with a few threadbare pieces of furniture scattered about. A large, ancient-looking TV was booming in one of the apartment’s four bedrooms, and the man summoned the woman he lives with, Janice Charles, a thirty-four-year-old African-American. As she came out, she wedged the TV into the doorway so that the three small children in the room could not get out.
Soft-spoken but incisive in her observations, Janice told me that she had grown up in Chicago but had left out of fear that her son would get involved with a gang there. In Milwaukee, she had gone on AFDC, then transferred to W-2. In return for her monthly payment of $673, she had been attending job training sessions and was due to be assigned to a community service job. She said that two of her kids had serious asthma problems, and that she had missed a scheduled review of her case when she had to take them to the doctor. She brought a note from the doctor but was told it was not acceptable. So her child care was cut off. As a result, she was unable to show up for her job, and she was dropped from W-2. Missing a rent payment, she was put out of the house with her children. She at first stayed with friends, but, unable to contribute anything, she was asked to leave. She tried to find a bed in one of the city’s shelters but they were all filled with mothers in similar straits. Eventually, the Red Cross helped her find a new place, and, clearing things up with W-2, she was able once again to receive assistance. She was going to a new community service job the very next day.
Janice told me that she had no objection to W-2’s work requirement. “AFDC did make a lot of people lazy,” she said. “If I get child care, I’ll have no problem with working. I’ll even clean houses.” At this point, the three kids who had been in the bedroom slipped past the TV set and scampered into the living room. The youngest, a thirteen-month-old with a shock of dark curly hair, climbed into his mother’s lap and looked at me. As far as I could tell, the kids seemed well cared for despite everything. Struck by Janice’s thoughfulness, I asked her a delicate but, I felt, unavoidable question: Why, given her circumstances, was she having another child? Sheepishly, she told me that she had been getting contraceptive shots every three months but had been late on one of them. “I cried when they told me I was pregnant,” she said. “Having a baby was not a smart idea.”
Under AFDC, Janice would have received an increase in her monthly check for that additional child—a payment that helped undermine public support for the old system. And not a single person I spoke with expressed a desire to return to it. On this key point, critics of the old system seem to have been right—welfare did breed dependence. At the same time, the new system being tested in Wisconsin, while generous in many respects, does not seem flexible or tolerant enough to deal with the many difficult cases inherited from the old system. And the real test is yet to come. For beginning next year, the program’s time limits will begin to take hold, and when they do, the levels of homelessness and hunger could sharply rise. While commendable in principle, W-2 in practice seems to be inflicting much unnecessary suffering.
What of those who do manage to leave W-2 and find jobs? Do they manage to escape poverty? At the Manhattan Institute’s meeting on welfare reform, this question was raised by Stephen Goldsmith, the Republican mayor of Indianapolis. Striking a somber note that contrasted with the event’s general giddiness, Goldsmith observed that the progress made thus far in welfare reform was “really the easy part. It has never been difficult to get people off welfare, right? You just stop paying them.” The truly difficult task, he said, was to get the economy to “function correctly” for “entry-level working poor families.”
Goldsmith recalled how, when the NCAA Final Four was held in Indianapolis several years ago, he went to the arena to thank all those who had helped clean it up. A TV crew went along, and, while the cameras rolled, one worker talked about how much he liked his job. After the taping stopped, Goldsmith asked the man if he had really meant what he said. “Mayor,” the man told him, “I do like my job. And I’m proud of the fact that this is the best-looking dome in the country. But they’re [only] letting me work twenty-five hours a week, ’cause if I had to work any more time they’d actually have to pay me benefits, which means I have to run home in order to relieve the babysitter, make [sure of] the child day-care worker, and then take the bus back to the restaurant, which is across the street, in order to work there at night.”
“It was just bewildering,” Goldsmith said. “I mean, I can’t imagine anybody able to piece together [his] life in the way that this gentleman was trying to do.” Given the “transitory” nature of work in America today, Goldsmith went on, cities and states were going to have to develop new ways of helping low-wage workers.
As Goldsmith’s remarks suggest, welfare reform has brought new attention to the situation of the working poor. For if large numbers of welfare recipients join the workforce only to remain poor, reform will have failed to achieve one of its major goals, which is reducing national poverty. In 1996, 36.5 million Americans—13.7 percent of the population—were classified as poor by federal standards. The rate for children—20.5 percent—was even higher. According to a recent report by Child Trends, a Washington-based nonprofit group, 2.7 million of those poor children lived in households in which at least one adult worked full-time. “Although having one or more working parents reduces the likelihood that children will live in poverty,” the report stated, “it does not provide a guarantee of escaping poverty.” In fact, it said, because many welfare recipients suffer from bad schooling and other disadvantages, welfare reform could produce even more families in which people both work and remain poor.
The lives of the working poor are the subject of No Shame in My Game: The Working Poor in the Inner City, by Katherine S. Newman, a cultural anthropologist at the Kennedy School of Government at Harvard University. Newman contends that the poor on the welfare rolls have received undue attention; the working poor, while far more numerous, are far less visible. To help remedy that, Newman and a team of graduate students interviewed more than three hundred New Yorkers—blacks in Harlem and Dominicans and Puerto Ricans in Washington Heights. Two hundred of them were employed in four fast-food restaurants in Harlem; the rest had tried to obtain jobs at these establishments and failed to get them. After the interviews were over, the graduate students themselves went to work in the fast-food restaurants to talk further with workers there; Newman spent time with the owners and managers of the restaurants (“Burger Barns,” she calls them). In addition, twelve workers allowed Newman and her team to tag along with them for a year.
Newman presents her data in two forms—personal “profiles” and sociological analysis. Unfortunately the subjects of the profiles (all pseudonymous) are described broadly and in somewhat sentimental language, and as a result they tend to blur together. Of Jamal, a twenty-two-year-old earning the minimum wage at Burger Barn, Newman writes that he stands for “his commitment to work, to the importance of trying to make it on his own. It is this work ethic that keeps him boarding that bus, that compels him to track down whatever job leads come his way.” Carmen feels it is “very important” to do well in school, an attitude she got from her mother and grandmother, who “instilled in her a love of ideas, respect for educated people, and the desire to become a white-collar professional.”
Ghetto life itself seems sanitized in No Shame in My Game. Virtually everyone in its Harlem seems to aspire to middle-class values and, despite meager means, struggles to uphold them. “In the inner city, the last place most Americans would look for expressions of the work ethic, the drive to join the labor force is stronger than it is in Westchester,” Newman writes. She provides no evidence for this sweeping statement.
But when it comes to analyzing the inner-city job market, Newman’s analysis is sharper and more convincing. No Shame in My Game provides strong evidence of the barriers that even the most determined minority youths face in finding a good job. To a large extent, the story is the familiar one of high-wage manufacturing jobs giving way to low-wage service jobs. But Newman’s immersion in the fast-food world of Harlem has allowed her to capture just how trapped these young people feel. In much of the country, Newman observes, fast-food jobs are viewed as a first step on the job ladder, but in central Harlem many of these positions are filled by adults who lack other opportunities. Seventy percent of the employees Newman and her team interviewed were over nineteen; 35 percent were at least twenty-three.
“For all too many Burger Barn workers,” Newman writes,
the future ends up looking just like the present. They do not graduate; they remain in jobs designed for teenagers and try to manage adult responsibilities on hopelessly inadequate wages.
Even when they do hire young people, Harlem’s Burger Barns prefer not to take on local kids because they can cause problems, such as hanging out with friends from the neighborhood.
Newman neatly juxtaposes the experiences of current Burger Barn workers with those of their parents and grandparents. The grandmother of twenty-one-year-old Kyesha worked for years with the Postal Service, a job that enabled her and her family to move from Harlem to Long Island. Seeking a similar path, Kyesha
has taken endless civil service exams, and applied to a host of places like the Postal Service and the Metropolitan Transit Authority. The trouble is, they aren’t hiring. When [her grandmother] was Kyesha’s age, back in the early sixties, those jobs were multiplying. What’s more, the government was looking over the shoulders of public employers, paying more attention to minority hiring. In the 1990s, those same employers have been shedding jobs in record numbers.
Newman also shows how Harlem’s working poor are “perpetually one paycheck away from disaster.” Almost half the working poor lack health insurance of any kind; the six to seven dollars an hour they earn is too much to qualify them for Medicaid and too little to afford private coverage. Child care is often out of reach as well. Typically, working families spend more than 20 percent of their monthly income on child care—a far higher proportion than the middle class spends.
From Katherine Newman’s account, one might conclude that the odds facing welfare mothers who enter the workforce are insurmountable. Yet the current booming economy seems to offer better prospects. When New-man began work on her book, in 1994, the national unemployment rate was above 6 percent; today, it is falling toward 4 percent. According to one widely quoted study, this growth has helped to increase the proportion of black youths in the workforce from 52 percent in 1992 to 64 percent in 1998. In Wisconsin, the job market is so tight that mothers who were turned down for jobs only a year ago are getting hired.
“I remember that in the early stages of W-2, people were saying, ‘Oh, there are not going to be enough jobs,”‘ Jean Rogers told me. “But everywhere the job market is still hopping. So then people said, ‘Oh, welfare recipients joining the workforce are going to drive the wage scale down.’ Well, I challenge you to find a job that pays the minimum wage. McDonald’s is paying $6.50 an hour to start.” In Rogers’s opinion, “there is no such thing as a bad job. All jobs are good jobs.”
Certainly efforts to reform the welfare system have been greatly helped by the economic expansion of the late 1990s. It now seems clear that the Fed-eral Reserve Board’s longstanding policy of tolerating high rates of unemployment as a means of combating inflation was a disaster for the working poor, creating a huge low-wage labor force for whom benefits are meager and insecurity and anxiety are a way of life. Only after years of steady national economic growth are real wages for this sector finally returning to the level of the 1970s.
Even now, in our urban centers, unemployment remains much higher than in the nation generally. In Milwaukee, for instance, the jobless rate in the inner city is thought to be five to six times higher than the official rate of 3.5 percent for the entire city. I talked to two middle-aged black men as they left a check-cashing place on an inner-city street corner. The men worked at a local foundry that produced castings for bulldozers and tanks. Some foundries in the city paid $15 an hour, they told me, but not the one they worked at. “I’m paid by the piece,” said one of the men. “It usually works out to eight-fifty an hour. Even though it’s a foundry, they’re not paying you what you’re worth.” His fellow worker said, “Anybody here can find a job, but the wages usually start at six dollars an hour. A person can earn as much picking up cans on the street as he can in a foundry.”
I encountered many such people in Milwaukee—an army of adults with limited education, spotty work records, and uncertain job prospects. Aside from a continued tightening of the job market, what could be done to improve those prospects? One traditional liberal answer—a large-scale, government-funded jobs program—today seems ruled out politically. As Katherine Newman writes, “I believe that we should be pragmatic and accept political realities for the moment, focusing policy energy on improving access to better-paid jobs in the private sector.” To that end, she puts a heavy emphasis on job training and vocational programs. And there’s something to this. In Milwaukee, several experts I spoke with observed that the city has a growing printing industry with a glaring need for skilled workers; local residents, they said, could be trained to fill such positions.
Even so, there’s a limit to what training can accomplish. And even if many more people are prepared for such jobs, the economy will continue to demand unskilled cashiers and custodians, hamburger flippers and nursing assistants. A pressing question, then, is how to make such jobs more attractive—how to make life easier for the janitor in Indianapolis.
Some very concrete, if undramatic, steps come to mind. One is a considerable increase in the minimum wage; this would have a ripple effect throughout the low-wage job market. Another is an expansion of the Earned Income Tax Credit; with little publicity, this has helped boost the annual incomes of millions of low-wage workers, and broadening it could benefit millions more. Providing affordable health care for those workers would be another major improvement. The 43 million Americans who currently lack health insurance live under the shadow of a medical emergency. Finally, the government could provide more subsidized child care. If we insist that people work, we should make sure that they have available to them safe and well-run centers in which to place their children.
Public support for such measures seems to be growing. In mid-June, the conservative Dick Armey, the House majority leader, in an article for The Washington Post (co-written by Representative Pete Stark), urged Congress to do something about the growing numbers of Americans lacking health insurance. “More and more people find themselves working in places where coverage is either unavailable, unaffordable, or undesir-able…,” they wrote, expressing support for a new refundable tax credit to “enable all Americans to buy decent health coverage.”
Welfare reform has helped to foster this change in attitude. “Once the welfare poor become the working poor, we’ll become more concerned about them,” David Riemer, an adviser to Milwaukee’s Democratic mayor John Norquist, told me. Riemer is one of a small number of liberal activists in Milwaukee who have long supported welfare reform as a means of changing the way Americans treat the poor. Already, Riemer noted, Wisconsin, as part of welfare reform, has made child care and a version of Medicaid available to the working poor. “How can we say, ‘We expect you to work, but still be poor’?” Riemer said. “By putting the poor in line with the values of the middle class, we’re getting more help for them.
“It’s futile to try and wipe out the low end of the labor market and push its wages up. That was tried in Germany and France and it led to high unemployment. And I don’t see a demand by even the left to pay more for a Big Mac, or a nanny, or the nursing home they put their parents in. These jobs are there, and someone is going to have to do them. But perhaps we can create a system of wage supplementation that lets people who work in these jobs get the child care and health care they need—to get a social wage.”
Riemer’s goals may be overmodest. They do not address the blatant inequity of a system in which CEOs routinely earn a hundred times more than the people who clean their offices. Yet, in arguing that welfare reform is making Americans more sympathetic toward the working poor, Riemer seems to be on to something. This change in attitude could prove to be one of the more lasting, if unanticipated, benefits of welfare reform.
October 7, 1999