Welfare reform has left America dangerously undefended against hard times. According to Tom Snyder, assistant to the president of the Hotel Employees and Restaurant Employees union (HERE)–whose members include thousands of people who might, prior to the 1996 welfare law, have turned to welfare for help during periods of unemployment–the combination of welfare reform and layoffs has been "catastrophic." "As the weeks go by," he told us, "we see more and more families with eviction notices, or getting their utilities turned off. They don’t have health insurance." In Washington, DC, on November 7, HERE brought in twelve tractor-trailers loaded with food for 3,500 union families. "It was heartbreaking," Snyder says. "It looked like the Depression."
Nationwide, the industries hardest hit by recession employ large numbers of low-wage workers. According to AFL-CIO president John Sweeney, workers earning less than $8 an hour are twice as likely to be laid off as higher-paid people. Should they seek government help, many of the newly unemployed will find that they have exhausted their five-year lifetime limits on the receipt of welfare benefits. Others will simply be turned away. The Department of Health and Human Services reports that welfare reform provoked a sharp drop in the proportion of eligible families awarded benefits–from 84 percent before the law’s passage to 56 percent two years later.
It wasn’t supposed to turn out this way, of course. In the mood of economic triumphalism that dominated the years leading up to and immediately following welfare reform, even liberals seemed to assume that there would always be enough jobs to employ the poor. From the Heritage Foundation to progressive organizations like the Economic Policy Institute and the Center on Budget and Policy Priorities, hardly anyone looked ahead to the prospect of rising unemployment.
But now the unthinkable is happening all around us, and with only a severely shredded safety net to save the victims from destitution. Laid-off workers who seek help from a welfare office are likely to exit with little more than the suggestion that they "get a job." Meanwhile, even welfare reform "success stories" are rapidly unraveling, as thousands of former welfare recipients who managed to achieve stable employment before the economic downturn have seen their jobs disappear. Sisnie Calvario, 46, of Long Beach, California, left welfare in 1998 for a data-entry job at United Airlines that paid $1,900 a month until she lost it two weeks after September 11. "I really, really worked hard to get this job, and it’s really hard for me to lose it," she told the Los Angeles Times in tears.
Nor are many of the newly unemployed likely to get much help from unemployment insurance benefits, which reach only about a third of the jobless and–on account of their low earnings and often irregular employment histories–only 20 percent of former welfare recipients. For many low-wage people, welfare once served as an unemployment insurance program. Now, postreform, not only is that insurance gone–so, in many cases, are Medicaid and food stamps, in part because access to these programs typically runs through the greatly constricted welfare application process. In sum, rising unemployment levels are revealing the full recklessness of welfare reform.
Not that welfare reform was a brilliant success in the best of times. In the years between 1996 and 2000 about 60 percent of the women leaving welfare were able to find jobs, but at an average wage of only $7 an hour. For some, especially those in states offering relatively generous childcare and other transitional benefits, even low wages were a genuine improvement over the miserly benefits they received through Aid to Families with Dependent Children, the program abolished in 1996. Others, though, found themselves swamped by work-related expenses (childcare and transportation), or undone by everyday emergencies–sick children, broken cars. Hence, even during the boom years, the nation’s largest network of food banks, America’s Second Harvest, was reporting "a torrent of need which [we] cannot meet."
In response to the evident failure of welfare reform, liberal welfare advocates and policy experts made a fateful strategic decision. They could have continued to demand the restoration of welfare as an entitlement for those too burdened by childcare responsibilities to work outside their homes–only with adequate benefit levels and, of course, health and childcare supports for those who wished to enter the job market. Instead, they chose what they considered the pragmatic course, accepting the abolition of the entitlement and focusing on "making work pay"–most notably through benefits, like the earned-income tax credit, that are available only to the employed. "There’s little debate anymore about making work the center of social policy," Columbia University historian Alan Brinkley observed in 1999–an approach that "might have been controversial on the left a few years ago."
At the time, the emphasis on job-related benefits seemed to make sense. It was "impractical," we were told repeatedly–even "utopian"–to fight for the restoration of welfare. In fact, the only "utopianism" lay in the fantasy of a perpetually expanding economy. Whether or not the current downturn continues, others will come along, and the working poor will once again need refuge from market disruptions. It was this vital preparedness that we lost with welfare reform.
We lost something else too: a crucial tool for improving the jobs that exist. An adequate welfare system, capable of supporting the unemployed at some level of dignity and safety, would enable the poor to turn down the most underpaid and abusive jobs. It would, in addition, empower more low-wage workers to take the risk of organizing, knowing that they could still survive even if they were fired. This in fact is what most irked employers about welfare-as-we-knew-it. And it is this aspect of welfare–as a protection for low-income parents and the working poor generally–that most urgently needs to be restored and defended.