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.