Welfare Reform: Helping Whom?

Ponder for a moment the following facts:

- The purchasing power of the nation's minimum hourly wage, frozen at $3.35 since 1981, has declined by 27 percent over the past six years.

- Slightly more than half of the new jobs created in the last eight years in this country were at full-time, annual wages of less than $11,611, the federal government's poverty line for a family of four.

- Almost a third of the jobs created since 1980 have been part-time, and three-fourths of them have been filled by people wanting full-time work. Two-thirds of those would-be full-timers make the minimum wage, and 85 percent of them receive no health insurance from their employers.

- More than 40 percent of all poor people over age 14 worked last year, and the number of working poor has increased by 50 percent since 1978.

- The number of working poor people is more than twice the number of adults on welfare.

- While the national poverty rate remains basically stable at 13.5 percent, the typical poor family has fallen further below the poverty line under the Reagan administration, and the gap between rich and poor families is now at the widest level in more than 40 years.

- The official, September 1988 national unemployment rate was 5.4 percent, and employers in many industries complain that they cannot find enough qualified and willing workers.

And now consider this: In the past few months the U.S. Congress rejected, again, a proposal to raise the minimum wage, while it overwhelmingly passed a "welfare reform" bill designed to "break the cycle of poverty" by forcing welfare mothers off the dole and into the workforce. Anyone who studies the above figures can see that for millions of Americans, jobs do not bring an end to poverty.

Yet Republicans, Democrats, and even President Reagan have all touted the legislation's emphasis on job training, basic education, and work as proof of their desire to "help the poor help themselves." As election day approached, very few members of Congress could refrain from supporting legislation that would, ostensibly, help the poor and cut long-term federal welfare costs at the same time.

As a popular political issue, the legislation has succeeded, but as "welfare reform" the bill is little more than a well-disguised fraud. The bill's greatest concern is not to meet the needs of the nation's poor, who are mostly women and children, but to trim the welfare rolls, thereby cutting federal costs, and to provide a source of cheap labor.

Aid to Families with Dependent Children (AFDC), designed as an income-support program to which needy single mothers were entitled, now becomes a mandatory jobs program. But given the economic realities cited above, the nature of the current welfare program, the numerous incorrect assumptions on which the legislation is based, the poor records of several state "workfare" programs, and the bill's specific provisions, it is unlikely that such mandatory jobs will lift former welfare recipients out of poverty. Former welfare recipients participating in a similar program in Massachusetts earn an average of about $9,000 a year. Employers in search of a cheap labor force will likely be the bill's primary beneficiaries.

The major provisions of the bill, estimated to cost federal taxpayers $3.34 billion over five years, will require states to enroll at least 7 percent of their welfare recipients in job training or education programs in 1990. with a minimum 20 percent enrolled in 1995. The bill also requires either the father or mother in a two-parent welfare family to perform at least 16 hours a week of community service beginning in 1994. The states are free to establish their own minimum "workfare" requirements, and recipients who do not participate are likely to lose some or all of their welfare benefits. Welfare parents under age 25 without a high school diploma will be allowed to complete their education in lieu of the work requirement.

Former welfare recipients will receive Medicaid and child care for their first year on the job, and those who quit their jobs and return to the welfare rolls can recover their Medicaid and day-care eligibility. The states will also be required to withhold the wages of absentee fathers for child support payments and to provide welfare benefits to two-parent welfare families for at least six months every year.

TO FULLY UNDERSTAND the impact of these provisions, one must know something about the current welfare system and the approximately 10.7 million people, some seven million of whom are dependent children, who are on welfare. Lawmakers who believe welfare recipients are lazy people who don't want to work, and who further believe that the existence of welfare discourages people from looking for work, must know nothing about the level of welfare benefits.

The real value of welfare benefits nationwide declined by 31 percent from 1970 to 1985. Benefits vary widely from state to state, but in no state do maximum AFDC and food-stamp benefits bring the average family anywhere close to the poverty line. Initial welfare reform packages proposed a national minimum welfare benefit, but lawmakers more concerned with miniscule federal budget savings quickly scuttled that idea.

The bill's "workfare" provisions are mandatory because the lawmakers assume a "cycle of dependency" from which welfare recipients will not escape. In fact, all but about 15 percent of the people who endure the social stigma and personal humiliation of applying for welfare benefits do so only as a last resort or a stop-gap measure to tide them over between jobs. Most families leave the welfare. rolls within two years.

All but about 250,000, or 7 percent, of 3.7 million welfare parents are mothers without husbands in the house, and 43 percent of their children are under age 6. While middle-class women are encouraged to leave the work force and go back home, the new welfare bill devalues the work poor women do at home and forces them into the work place. Yet the lack of long-term national child-care subsidies or tax benefits makes it difficult for women to work full time.

PERHAPS THE GREATEST travesty of the Reagan administration's economic and social welfare policies is that low welfare benefits, low wages, and drastic reductions in other social programs have left one out of every five American children, and 43 percent of black children, living in poverty. Forcing welfare mothers to accept low-paying jobs will likely result in more poor children who do not receive adequate child care, medical care, or nutritional care.

True welfare reform cannot be designed in a vacuum, yet that is exactly what Congress has done. Lawmakers decided to force welfare recipients to go to work without adjusting the minimum wage, without making provisions for long-term affordable child care, without making health insurance more widely available, and without addressing the nation's worsening housing crisis.

The result is a program that is, at best, irresponsible and ineffective. Just as supply-side, trickle-down Reaganomics has only worsened the lot of the poor, so will this welfare reform package. As the results of Reagan's policies reach a near-crisis stage, with U.S. society more and more sharply divided by class, someone must begin to promote bottom-up economic development.

The first step in such true economic reform must be an increase in the minimum wage. That alone would shrink the welfare rolls, increase the labor supply, and stimulate economic growth. If the rich have to forego some of their profits temporarily, so be it. Increased demand for consumer goods would soon spur productivity. A bottom-up economic policy must also address the issues of full employment, economic empowerment, and income redistribution. Only then will economic justice begin to be possible.

Vicki Kemper was new editor of Sojourners when this article appeared.