Decoding welfare reform: An update

By Dr. Mimi Abramovitz, Professor, Hunter College School of Social Work
(April 1997)

1. MYTH: Social programs like welfare don't work

FACT:Welfare benefits reduce poverty. While benefits do not lift everyone up, in 1995, safety net programs helped 47% of all poor people to escape extreme destitution---the largest percent in any year since 1980.

COMMENT: Income support programs work for some groups better than others and they all could do a lot more.

REAL WELFARE REFORM: Reduces poverty, not welfare. Bring benefits up to poverty levels, support a guaranteed annual income.

2. MYTH: Welfare makes people lazy, unmotivated for work

FACT: Poor women regularly combine welfare with work or receive welfare benefits in between jobs; 70% leave the rolls within 2 years. Many want to stay off welfare but cannot find employment or jobs that pay enough. Still others use time on welfare to get more education which channels them out of poverty and into taxpaying.

COMMENT: If work was available and paid enough, fewer people would need welfare. If we acknowledged that taking care of one's own children was valuable "work," all mothers would be considered productive members of society.

REAL WELFARE REFORM. Assists women in balancing child care and employment. Create more affordable and quality child care services; jobs with benefits and living wage, income support programs for those the market does not absorb .

3. MYTH: Few women on welfare are white.

FACT: In 1994, of all AFDC children 38% were black, 33% white, 21% Latina, 4% Asian, 1% Native American, & 3% other.

COMMENT: Persons of color are over-represented on welfare families because they are overpresented among the poor.

REAL WELFARE REFORM: Assists people in need; does not divide women from each other and make welfare a tool in the politics of race.

4. MYTH: Workfare gives people skills they can use to land a job.

FACT: Workfare which requires recipients to work off their benefits rarely leads to paid employment or higher earnings. NYC's Commissioner of Human Resources reported anecdotally that 75,000 workfare participants would move through 25,000 slots but that agencies would be likely to hire only 250. According to NY Newsday, 4180 out of a pool of 80,000, or 5% found regular jobs from 7/95 to 4/96, down from prior years, and not necessarily related to their workfare assignment. Workfare requires 20 hours of "service" a week, leaving little time to pursue education, training, or a "real" job.

COMMENT: Workfare displaces permanent workers. New York City, which has the largest workfare program in the nation, replaced 17,000 waged workers with over 34,000 on workfare, and the numbers are expected to soar now that TANF recipients are included. Workfare also means loss of union jobs, occupational health and safety protections, and other hard-won workplace gains. Since workfare participants work off their benefits instead of receiving a wage, taxpayers end up footing the wage bill, giving employers a free ride.

REAL WELFARE REFORM: Promotes development of skills, not their decline. Restore skill-based job training; GED and college education as "work;" end workfare.

5. MYTH: Welfare programs interfere with the job market.

FACT: Welfare reform undercuts wages. The lifetime limit on benefits, stiff work and stringent workfare programs will press wages down by flooding the labor market with low-wage workers, increasing the competition for low-paid jobs, eroding workplace protections, and weakening trade unions. It is estimated that some 1.2 million New Yorkers--600,000 jobless workers and 700,000 adults on public assistance--will be vying for less than 250,000 new job openings. Only a fraction will succeed, but the increased competition can only make it easier for employers to keep wages low and harder for unions to negotiate good contracts.

COMMENT: Employers are major beneficiaries of welfare reform. From the outset, welfare supplied business with low-paid workers by setting benefits lower than the lowest prevailing wage. TANF's new wage subsidies and tax-credits use public dollars to pay firms that hire recipients pay wages, but profits remain in private hands. Lowering labor costs in these ways is part of a broader strategy initiated in the early 1980s, to promote economic recovery, helping business and imposing austerity on everyone else.

REAL WELFARE REFORM Rejects time limits, work rules, workfare and wage subsidies; does not lower labor costs on the backs of the poor; creates more living wage jobs .

6. MYTH: Too much welfare for too many immigrants. Immigrants use public benefits and drain the US Treasury while contributing little to wider society.

FACT: Immigrants represent 8% of the US population, down from 15% from 1870-1920. They earn almost $300 billion, pay over $90 billion in taxes, but receive about $6 billion in benefits. Immigrants use public assistance at rates comparable to US citizens (about 5% vs. 6%), but 44% of the federal savings in the new welfare law comes from immigrant communities. The vast majority of legal immigrants come to the US to find work and to join family members, not to get welfare. They often fill poorly paid, no-benefit jobs that native born workers reject--another boon to low-wage employers.

COMMENT: Before admission to the US, immigrants are screened to determine if they are "likely to become a public charge." The denial of benefits to immigrants deprives millions of lawful residents access to the safety net paid for, in part, by their taxes which in turn subsidize programs for other citizens. Anti-immigrant sentiments reflect fears in some quarters that US immigration policy has eliminated its former pro-European bias, thus threatening the "racial balance" of the nation.

REAL WELFARE REFORM: Welcomes immigrants and does not violate American principles of fair play. Restore immigrant eligibility for SSI , Food Stamps, TANF, Medicaid and all other federal means-tested programs. Stop scapegoating "foreigners" for the nation's social ills and economic woes.

7. MYTH: Workfare provides good role models for children by showing them that their mothers can make a positive contribution to society.

FACT: Workfare undermines the parent-child tie when children see that mothers are forced to make a no-win choice between acceptance of workfare or having even less money for the family. Professional experience has shown that in a country that values individual initiative and choices, children who believe that their mother may be powerless to take care of herself and her family, may become depressed, loose respect for parents, or rebel against authority.

COMMENT: Welfare critics insist that poor women work outside the home, but celebrate high-powered women who give it all up and return to full time care-giving. Advocates of a limited version of "family values" promote a double standard of womenhood.

REAL WELFARE REFORM: Provides women with services and supports so that they can choose from a range of homemaking and employment options suited to themselves and their children. A one-size program cannot fit all nine million children on welfare.

8. MYTH: Welfare invites or rewards single motherhood. Based on this belief, the new law penalizes non-marital births by denying aid to children whose mother is on welfare when they were born (child exclusion), rewarding states that lower both their non-marital and abortion rates ("illegitimacy" bonus), providing funds for abstinence but not sex education programs, and requiring teen mothers on welfare to live at home.

FACT: Researchers have not found a strong link between welfare grant levels and births outside of marriage. High benefit states do not have more non-marital births nor do low-benefit states have fewer. During the last 20 years, despite a fall in the value of the AFDC benefit( after inflation), non-marital births increased among women from all walks of life due to changed sexual mores, increased economic independence among women and the declining standard of living.

COMMENT: The child exclusion assumes that women will have children for an additional $64 month, but no one wonders if working and middle-class families have babies for another $2350 dependent's tax exemption or to increase their Earned Income Tax Credit. Even though the average welfare family consists of a mother and only two children-- the same as the rest of us--the child exclusion ignores the impact of poverty on the expense of children's cognitive physical and emotional well-being. Some mothers may also consider foster care or adoption to ensure their child's survival. By jeopardizing the ability of poor women to make reproductive decisions, the child exclusion and "illegitimacy" bonus also tests the limits of governmental control of a recipient's childbearing choices. If unchecked, this can pave the way for greater regulation all women's reproductive rights .

REAL WELFARE REFORM: Protects, doesn't dictate the reproductive choices for all women --those on and off welfare. Replace the child exclusion and the "illegitimacy" bonus with sex education and pre-natal care.

9. MYTH: If poor women only married, they would not be poor.

FACT: Marriage is not necessarily an effective anti-poverty strategy for poor women. While two incomes clearly are better than one, the poor tend to be poor before, during, and after they tie the knot. In 1996 a family with a full-time adult worker earning the minimum wage ($8500) and collecting no benefits, lived far below the poverty line of $16, 000 for a family of four.

COMMENT. Blaming single mothers for poverty masks its real roots in the dynamics of the economy. Neither gender nor family structure makes people poor. But the lack of caretaking supports and the unequal treatment of women based on gender in all spheres of life contributes to the impoverishment of women. Poverty stems from market failures, not character flaws.

REAL WELFARE REFORM: Favors choice rather coercion, does not promote one family type of structure over another, and calls for creating the conditions that will enable women and men to choose work and family arrangements that suit their own and their children's needs.

10. MYTH: Cutting welfare strengthens family life.

FACT: The family is a site of violence for many women, including large numbers of women on welfare. For some poor women, the welfare check has been the key to escaping domestic violence. Cutting welfare only increases their economic dependence on men, who if threatened by seeing their partner get ahead, may use coercion and violence to prevent them pursing employment, education, or training.

COMMENT: Batterers don't like their victims to have a way out. More than half of battered women stay with their abusers because they cannot support themselves and their children in any other way. The level of economic resources available to an abused women is the best indicator of whether or not she will leave here abuser once and for all.

REAL WELFARE REFORM: Protects, doesn't endanger people. Support The Family Violence Option of the new federal law which allows states to temporarily waive the rule that would place recipients faced with violence at home in harms way. But do not count exempted battered women in a state's 20% hardship quota.

11. MYTH: Welfare promotes irresponsible behavior.

FACT: Welfare provides an economic back up that allows people to get back on their feet and through hard times.

COMMENT: Grinding poverty harms and degrades people, not the receipt of a meager welfare check--which in the past few years has amounted to $370 in the median state.

REAL WELFARE REFORM: Helps, does not punish recipients. Reject the Gramm Amendment which eliminates benefits to convicted drug felons; provide services to those who test positive for drug use rather than deny them benefits; assure ready access health, education and welfare services in poor neighborhoods; prevent social problems before they arise.

12. MYTH: Welfare destroys community life.

FACT: Welfare sustains communities and local economies. The poor spend nearly all their dollars on basic goods and services. In New York City alone, social welfare pays $3 billion toward rent, $1.5 billion to food stores and an estimated $1.5 billion more to utilities and other local merchants. Cutting welfare can lead landords to default on property taxes, food stores to lay off workers, and neighborhood economies to crumble. During recessions, when more people qualify for welfare, the infusion of fund s into local economies helps to counter the economic fall.

COMMENT: Welfare provides irreplaceable revenue to low-income areas, especially those lacking enough paying jobs. Welfare increases buying power, which yields jobs for local wage earners, and otherwise makes communities more attractive to business investment. Welfare can also forestall homelessness, the high cost of illness, and millions of dollars in new emergency services.

REAL WELFARE REFORM: Invests, does not disinvest in local communities. Support welfare as a way to promote human capital and economic development.

13. MYTH: Converting federal entitlements into block grants will save states and cities money.

FACT: Block grants introduce new financial risks and inequities. They shift federal responsibility and costs to the states, while cutting federal support. If the demand for benefits exceeds available funds, the needy could be placed on a waiting list for cash aid or sent into the streets. Block grants also risk setting of "race to the bottom" as states and localities try to discourage use of their welfare program.

COMMENT: AFDC spending accounted for about 1% of the federal budget and this will fall after TANF. In the absence of resources and political will, block grants will increase the likelihood of poverty for those in need. Localities will have to pick up the tab for the rising economic costs of shelters, foster care, and prisons, but also the social costs that accompany the presence of high numbers of sick, homeless, hungry, and jobless residents.

REAL WELFARE REFORM: Means maintaining the federal guarantee to assist the poor and improving its reach through universal and comprehensive programs. Restore the status of entitlement to TANF; tax those who earn more to pay for improved social welfare programs for all families rather than bashing the poor and cutting taxes to win votes from the middle class.

14. MYTH: Block grants offer state and local governments more control over programs.

FACT: Block grants offer states greater control but fewer federal dollars to do anything. State action will also be stymied by new federal regulations that mandate increasingly punitive measures, and that end the 60 year old federal guarantee of support for the poor.

COMMENT: The linchpin of the US welfare state are the entitlements. Replacing them with block grants is a critical step for those seeking to dismantle the entire system.

REAL WELFARE REFORM: Uses federal powers to protect, not to punish the poor. Restore welfare's entitlement status, federalize public assistance, and strengthen our commitment to the downtrodden.

15. MYTH: Only the poor benefit from government programs.

FACT: 47% of all US households receive some kind of government benefit, be it Social Security, Medicare, college loans or veterans benefits, compared to less than 5 percent on welfare. This includes middle and upper class families who receive numerous health, education and welfare benefits from the tax code. The latter also subsidizes major corporations which received $167.2 billion in 1995 compared to $50 billion for AFDC, food stamps, housing assistance and child nutrition programs combined.

COMMENT: It is hypocritical to disparage government aid for those at the bottom while providing even more assistance to those at the top. The federal government provides a meager safety net for the needy, but a plush cushion to the affluent.

REAL WELFARE REFORM: Provides comparable benefits to the poor and the middle class. Close business tax loopholes, don't reduce the capital gains tax, distribute resources fairly.

16. MYTH: The welfare state is anti-business.

FACT: Social welfare programs have always aided business and industry by creating new consumers, ensuring employers a healthy and educated workforce, and quieting social protests. Faced with loss of military contracts, corporations have begun to vie for the chance to manage income maintenance programs. States are actively considering these bids, despite the poor track record of privatized prisons, schools, health services and immigrant detention centers.

COMMENT: Privatized health and social programs, especially those run for profit, are giant give-aways. In most cases, the record shows for-profit service providers end up sacrificing quality of care for high returns.

REAL WELFARE REFORM: Subsidizes the needy, not the greedy. Reject the privatization of social welfare programs, raise corporate income taxes.

17. MYTH: Recipients are taking the cuts lying down.

FACT: Welfare recipients are organizing in cities and town around the country to increase welfare benefits, to put an end to workfare, to have college education defined as a work activity. They want President Clinton to "FIX IT" as he promised and then some.

COMMENT: "Never doubt for a single moment that a small group of people can change the world. Indeed, that has been the only way," Margaret Mead, anthropologist.

REAL WELFARE REFORM: Don't mourn, organize! Support a voice and self determination for welfare clients, support the workfare organizing drive and the national welfare rights movement.