In 1996 Congress and the President of the United States repealed the
nation’s entitlement to welfare for single mothers and their children. In 950
the federal government stipulated that “all individuals wishing to make
application for Aid to Dependent Children shall have the opportunity to do so,
and that aid to dependent children shall be furnished with reasonable
promptness to all eligible individuals."[1]
The legislation replacing Aid to Families with Dependent Children (AFDC) and
establishing its replacement, Temporary Aid to Needy Families (TANF) is very
clear on the subject of entitlement: that the part of the legislation
pertaining to TANF “shall not be interpreted to entitle any individual or
family to assistance…."[2]
Lifetime limits on receipt of benefits and strict work requirements, even for
the mothers of young children, are the hallmarks of Washington’s new poor law.
AFDC is a lost entitlement for a very vulnerable group, single mother
families.[3]
Lurking in the background of AFDC throughout its troubled history—or perhaps
in the foreground--was a missing entitlement. The equivalent of an
entitlement in the employment sphere is a job for all who seek to be employed.
This is the missing entitlement in a society that reveres the work ethic but
deprives millions of people the opportunity to practice it. The missing
entitlement critically influenced the course of ADC/AFDC. In what follows I
discuss the relationship between ADC/AFDC and the labor market, including the
ways in which the existence of chronic, widespread unemployment and
underemployment and its official denial or downplay contributed to the
vulnerability and unpopularity of the program. Further, I examine lost
opportunities for reform, give reasons why the entitlement to work was
repeatedly rejected, and finally take a look at the labor-market context of
the nation’s new welfare law that has the words “Work Opportunity” in its
title--the Personal Responsibility and Work Opportunity Reconciliation Act of
1996.
AFDC and
the Labor Market
AFDC was highly dependent on labor market conditions for both women and
men. This was the case even though single mothers were excused from the labor
market for the first 30 years and thereafter required to work or register for
education and training only after their children reached various ages—six,
three and in its last years, as little as one at states’ options. The
advocates of what was first called Aid to Dependent Children[4]
held the maternalist view that public assistance should free single mothers
from the breadwinning role in order that they could perform the nurturing
role. To the planners and advocates of ADC mothers were nurturers and fathers
were breadwinners, a family policy that fit well with efforts to reduce the
size of the labor market during an era of massive unemployment. In fact single
mothers of dependent children were, like the elderly, defined as
“unemployables.”[5]
The model for ADC, the pre-Depression Mothers’ Aid programs available in most
states, had the stated goal of enabling mothers to be nurturers but was so
meager in benefits and limited in coverage that very few poor mothers had, in
fact, been freed from the breadwinning role. The planners and advocates of
ADC, women reformers in the U. S. Children’s Bureau, a division of the
Department of Labor, held that federal funds would correct this shortcoming of
state Mothers’ Aid programs.
Children in two-parent families with able-bodied
fathers or potential breadwinners were excluded from ADC. The Social Security
Act of 1935 defined a “dependent child” as one who is “deprived of parental
support by death, continued absence from the home or physical or mental
incapacity."[6]
The advocates of ADC assumed that the large-scale public employment programs
that were initiated months before the passage of the Social Security Act would
meet the employment and income needs of two-parent families with able-bodied
fathers who were excluded from ADC. These two major assumptions of the ADC
planners proved wrong. Many of these fathers would not be able to support
their families, and many single mothers would not be freed from the
breadwinning role.
The New Deal work programs, ambitious as they were, served a minority of
the unemployed, even at their peak, and were, in any case, terminated in 1942,
not to be seen again for more than 30 years. After the brief spell of full
employment during World War II, full employment, though seriously contemplated
by Congress, was also among the missing. The “welfare fathers” were often
unemployed or underemployed, and they were without federal aid altogether
until 1962. After that, they and their families could get AFDC only if they
met the strictest definitions of unemployment. Many of these men recognized
that their families would be better off economically without them, either
actually or only officially, for as single-mother families their wives and
children would be eligible for ADC/AFDC. In its rationale for repeal and
replacement of AFDC Congress, which regarded single motherhood as part of a
“crisis” in the nation, deplored the fact that “Eighty-nine percent of
children receiving AFDC benefits now live in homes in which no father is
present.”[7]
But Congress had made the rules that excluded nearly all fathers. If the
welfare mothers were stigmatized and under-budgeted, the “welfare fathers” and
their families had recourse only to even more meager state general assistance
programs that were sometimes available only on an emergency basis. The women
were “regulated” by the welfare system, but the men were often subject to the
criminal justice system.[8]
Many mothers whose children were eligible for aid were,
in fact, obliged to work. Low benefits, limited coverage and state work
requirements—often invoked at cotton-picking time--forced some poor women to
support themselves independently and others to supplement their meager grants
with wages.[9]
Although the Social Security Act did not exclude children on the basis of
their parents' marital status or their race, states found ways to limit aid to
black children born to unmarried women on the basis of their not providing
“suitable” homes.[10]
Adults in the families so excluded also became dependent on the labor market
and other non-governmental sources of income.
The present or past labor-market position of "welfare fathers"--not
married to their children's mothers, divorced, separated or deserting and
paying insufficient or no child support--is pertinent to any discussion of
AFDC. Additionally, the former labor-market status of deceased parents
determines whether and how well their dependents are covered by social
insurance or whether they are consigned to the more demeaning and stingier
public assistance programs. Finally, employment and earnings of
both parents in a married-couple household are particularly critical, given
the lack (until the recent growth of the Earned Income Tax Credit) of federal
government support for poor families with two, able-bodied parents in the
home.
The Missing Entitlement and
Welfare Repeal
The labor market in which
AFDC operated throughout nearly all of its history and the pervasive denial of
the conditions that consistently afflicted millions of workers contributed
mightily to its vulnerability. This was the case when mothers were considered
nurturers and categorized as unemployable, and it became even more so when,
with so many mothers in the workforce their role expectations changed.
Evidence of changing expectations came as early as 1962 when John Kennedy
recommended an increase in subsidized childcare asserting that "Many women now
on assistance rolls could obtain jobs and become self-supporting if local
day-care programs for their young children were available.…”[11]
JFK had reinforced this expectation by recommending grants to the states
to aid in establishing local programs for day care of the children of working
mothers. In five years, attempts to impose work requirements would begin.
Relief rolls expand in response to a number of factors, but chronic problems
of unemployment, involuntary part-time employment, and low wages have to be
counted among the factors that swelled AFDC caseloads. It is true that the
great rise in the rolls in the 1960s was not a response to increased
unemployment but to a combination of much greater numbers of eligible families
claiming their “welfare rights” and liberalized eligibility determination. It
was not a matter of increased need but of more of that need being met.
Nonetheless, underemployment was widespread and documented in the nation’s
ghettos during the sixties, low rates of official unemployment notwithstanding
(see p. 12 and note 38). Growth in a program that does not directly benefit
those who pay for it tends to cause resentment among taxpayers and to increase
its political liability. High rates of unemployment among African Americans
and Latinos made their families disproportionately dependent on AFDC and
burdened the program with another source of unpopularity--racial and ethnic
prejudice.
Unpopularity
and resentment of welfare are aggravated if the structural roots of economic
dependency are denied or downplayed and the individual factors magnified.
Official unemployment rates that conceal all but the iceberg tip of actual
joblessness shape public perception of a capacious labor market that can
absorb all who merely make themselves available for work. Uncounted are those
who are forced to work part-time, who become too discouraged to continue to
look for a job, who are in prison, often for reasons related to unemployment,
and who earn so little that their families are hungry without income
supplements. Nor does the public recognize that increases in unemployment are
often deliberate government policies undertaken to prevent inflation and that
those who become unemployed and underemployed as a result of these policies
are, in effect, sacrificed on the altar of price stability. With the problem
all but denied, minimized, undercounted or misdiagnosed, those who suffer are
seen as perpetrators—malingering rather than unfortunate. And public policy
that forces them to work by restricting and ultimately denying them relief
carries the name of reform rather than repression. The official denial of
chronic underemployment and unemployment in the U. S. labor market carried
heavy political consequences for its victims and their families.
Anyone who
knows even a little about social movements will recognize that widespread
denial of a problem deters efforts to remedy it. And public awareness—of the
magnitude, severity, duration, and consequences of a problem—is a necessary
step in building a movement to conquer it. That is one reason why continually
deconstructing official unemployment rates to show how few of the unemployed
and underemployed they count is an important movement-building technique.[12]
Except for
wartime, the American labor market has been characterized by chronic
unemployment and underemployment. Large-scale work programs were established
to employ the jobless during the Great Depression but discontinued when World
War II required a different kind of government employment. Washington created
a smaller-scale but significant work program 30 years later but again
abandoned it, this time when unemployment was increasing, not disappearing.
And twice--in the forties and the seventies--full employment bills that
started out with an entitlement to work were enacted only when such a
guarantee was eliminated.
Unemployment
has been relatively low in the late 1990s. Yet, in 1999, when the official
unemployment rate averaged 4.2 percent, there were, in addition to the 5.9
million persons counted as unemployed, 3.4 million involuntary part-time
workers, 4.2 million non-job seekers who wanted a job, and approximately 16.7
million full-time, year-round workers earning less the poverty level of a
family of four—a total of 30.2 million unemployed or underemployed.[13]
In 1998, when the national unemployment rate was 4.5 percent, 74 cities and
300 counties had rates of 9 percent or higher.[14]
And according to the U. S. Department of Housing and Urban Development, one in
six U. S. cities has chronically high unemployment rates despite the general
decline in unemployment.[15]
People of color have suffered disproportionately from labor market
disadvantages, but it is important to recognize that the great majority of the
unemployed always were—and still are—white. Let us review the lost
opportunities to sustain job creation and to enact a genuine entitlement to
work.
Why Were New Deal Work Programs Limited and Temporary?
Federal relief administrator Harry Hopkins wanted a permanent work program
because he believed that for years to come “there will remain … as the
responsibility of government, a standing army of able-bodied workers who have
no jobs.”[16]
Hopkins expected WPA to be a permanent agency.[17]
The architects of the Social Security Act, who were members of the
Administration’s Committee on Economic Security and among Franklin Roosevelt’s
closest advisors, recommended that public employment projects "be recognized
as a permanent policy of the government and not merely as an emergency
measure."[18]
Their doubts were justified but their recommendations were unheeded. According
to Secretary of Labor Frances Perkins, who headed the Committee on Economic
Security, both Roosevelt and Hopkins “had the idea of a permanent work relief
program, perhaps instead of Unemployment Insurance.” But it had not been
written into the law, and, commenting in the mid-forties, Perkins pointed out
that “unemployment insurance stands alone as the protection for people out of
work.”[19]
Like Perkins, Arthur J. Altmeyer, chairman of the technical board of the
Committee on Economic Security recalled that FDR wanted a worker who exhausted
unemployment benefits and was still unemployed to be entitled automatically to
a work relief job.[20]
Yet, in alluding to a 1937 Senate Special Committee to Investigate
Unemployment and Relief, Altmeyer wrote that “it was recognized that the
emergency work relief program known as the Works Progress Administration was
not a permanent solution of the unemployment problem, and it was hoped that,
with the continuing recovery from the Great Depression permanent solutions
could be found.” However, with unemployment again rising in 1937, “the
committee decided the time had not yet arrived when it would be feasible to
replace existing emergency programs with permanent ones.”[21]
New Deal historian Irving Bernstein holds that “Throughout its history, both
the President and the Congress considered WPA a ‘temporary’ if not ‘emergency’
agency, slated for oblivion as soon as severe unemployment disappeared.” This
assessment, Bernstein points out, was reflected in one-year appropriations
that made long-term planning by WPA impossible. However, since unemployment
did not disappear and even grew worse during the recession of 1937-38, WPA
survived until World War II, when joblessness did disappear for a time.[22]
Tracing the emergence of the idea of the right to work in the United States,
Peter Bachrach held that Roosevelt "was never willing to ask for more than
temporary appropriations designed to employ only a minority of those who were
unemployed."[23]
The New Deal historian, William Leuchtenburg writes that “by any standard, [WPA]
…was an impressive achievement,” [but] it never came close to meeting
Roosevelt’s goal of giving jobs to all who could work.”[24]
Referring to all the work programs of the federal government, a monograph
prepared by the Division of Research for the WPA said as much:
Since 1935 the total number given employment on various public work programs
has ranged from a low of 2.3 million to a high of 4.6 million. Large as these
figures are, at the peak they represented less than half of the number
estimated as unemployed. Indeed, throughout this period these programs have
averaged only between one-quarter and one-third of the estimated unemployed….[25]
In December 1940, for example, there were two million persons employed on WPA
projects and three times that many-- six million unemployed men and
women--searching for work.[26]
Roosevelt’s reluctance to employ more of the jobless, despite his stated
preferences for work programs over relief, is believed to have stemmed from
the costliness of work relief, his desire to balance the budget and opposition
from business and conservative politicians who considered it competitive with
private industry and drove up wage rates by paying relief workers too much.[27]
There was also opposition in farm areas, particularly in the South, where
planters complained that work relief made it impossible to get cheap farm
labor.[28]
Conservative fears were first voiced against the truly innovative Civil Works
Administration (CWA) which began late in 1933, employed four million people by
January 1934 and was disbanded later that year.[29]
Conservatives in the Administration and Congress persuaded Roosevelt that it
was too costly and that it "was highly suggestive of the right to work."[30]
By this, they meant it might lead to pressure for a permanent and expanded
work program--not only from the four million CWA workers, but also from
millions of unemployed workers without government-created jobs. Roosevelt also
felt CWA could create a permanent dependent class and that its continuance
might imply that the country would be in a permanent depression.[31]
Even though unemployment was 25 percent and CWA employed only about one-third
of the jobless at wages well below the national average, business interests,
particularly in the South and in construction, the type of work done by most
CWA workers, accused CWA of providing too much job security, too high wages,
and too lax a work environment.[32]
There is
disagreement over why the longer-lasting WPA was terminated in 1943. While
Edwin Armenta holds that Roosevelt ended WPA in order to appease conservatives
who had made big gains in the 1942 congressional elections, Edward Berkowitz
and Kim McQauid write that “Programs such as WPA … made little sense in an
economy engaged in the mammoth public works project called World War II.”[33]
Similarly, Nancy Rose holds that “a shortage of labor for the time being ended
the need for government programs in which people were put to work.”[34]
Temporary Full Employment
Perhaps
convinced by wartime fiscal policies that full employment could be achieved
and seeing the promise of jobs for all after the war as a vote getter, F.D.R
called for an Economic Bill of Rights in his presidential campaign that began
with the “right to a useful and remunerative job in the industries or shops or
farms or mines in the nation.”[35]
But despite the demonstrated benefits of wartime unemployment in the one to
two percent range—less than half the rates that are presently considered low--
a determined opposition of agrarian and business interests defeated full
employment in the post-war years. Among the many benefits of virtual full
employment in the war years was a drop in ADC caseloads-- despite factors that
would otherwise have caused the rolls to expand (more states signed on,
benefits levels rose, etc.). Instead of adopting a policy of jobs for all,
Congress passed an employment bill with no such guarantees.
Despite
favorable public opinion, there was no mass movement for full employment
strong enough to counter a determined minority that was able to exercise veto
power in our divided national government. The memory of mass employment during
the preceding decade could have contributed to political mobilization in favor
of the full-employment bill, but a number of conditions and public policies
reduced the size of the labor market and kept up consumption, thereby
preventing the sudden swell of unemployment that would have triggered those
memories and political action. Unemployment, though it increased, was held
down by these conditions and public policies: accumulated savings from wartime
prosperity, pent up demand from depression deprivation and wartime shortages,
expulsion of women from the labor market, and control of the effects of
demobilization through the G. I. Bill of Rights.
The following
statement which appeared in a special edition of the New Republic makes
it clear why economic elites opposed full employment and have continued to do
so:
Our experience with periods of labor shortage indicates that its first effect
is greatly to increase the bargaining power of labor, both individually and
collectively. This results in steady improvement of wages and working
conditions, up to the limit set by productive capacity. It means that
employers must seek to make employment attractive, since the workers are no
longer motivated by the fear of losing their jobs. A shift of workers from the
less pleasant and remunerative occupations occurs, so that standards are
raised at the lower levels….
The status of labor will improve, since employers can no longer rely upon the
discipline of discharge to enforce authority. The tendency will be for labor
to have more participation in industrial and economic policy.[36]
After the
Korean War, unemployment rose and became increasingly serious for young
workers and for black men and women whom discrimination shut out of the growth
industry-- white collar work. The consequences of federal failure to provide
work for the unemployed on a permanent basis, which had been masked during the
two wars, became apparent to some economists and some members of the
legislative and executive branches of government in the late fifties. Measures
to aid the unemployed in “depressed areas” were advocated by liberal Democrats
but vetoed by then President Dwight Eisenhower even though public opinion was
in favor of the measures. The problem was neglected by both economic and
social policies in the fifties.[37]
“Economic Opportunity” in
the 1960s
Job strategy rejected.“Economic opportunity,” the watchword of the
anti-poverty program, was not defined as employment opportunity. The chronic
unemployment and underemployment of the urban ghettos—30 percent even when
overall unemployment rates were dipping to 3.5 percent—were, in time,
documented by Congress and the Department of Labor[38].
Despite the advocacy for job creation at the Cabinet level, notably labor
secretary Willard Wirtz, LBJ, who had been the Texas administrator of the
National Youth Administration, a New Deal employment program for young
people, resisted job creation because it was more costly and also because
such a program might have lost the business support he sought for his
anti-poverty program.
Political scientist Judith Russell, who studied archival
materials extensively, considers this the decisive reason for the failure of
the War on Poverty to pursue a jobs strategy: “the lack of a clear consensus
among experts, early on, about the nature of unemployment and how it related
to economic performance and the relationship of these two factors to poverty.”[39]
Russell’s account certainly shows disagreement between labor secretary Wirtz
and Chairman of the Council of Economic Advisors Walter Heller, the latter
favoring a tax cut to stimulate the economy rather than targeted job creation
measures and the former believing that a macroeconomic stimulus was essential
but that it would not solve the “hard core” unemployment central to poverty
and characteristic of the ghetto.[40]
Adam Yarmolinsky’s view, cited above, suggests that anti-poverty planners may
have shared Heller’s faith in a tax cut and that they considered job creation
important but too costly.[41]
Russell also suggests two other reasons why policymakers eschewed substantial
job creation: belief that the Labor Department was incapable of administering
such a program effectively, and the government’s “halting and partial”
commitment to the black struggle for full economic rights.[42]
Ironically,
the anti-poverty program, which was supposed to provide a “hand-up” instead of
a “handout,” stimulated a welfare explosion. Fearful of civil disorder, local
agencies yielded to pressure from welfare recipients and their advocates,
adding to the rolls eligible families who would have been denied assistance
in earlier decades. The War on Poverty, through its Community Action Program,
came to focus on welfare rights, and advocacy for the poor was largely for
income support instead of work. Indeed, welfare advocates were to continue
this one-sided approach to economic justice until welfare repeal forced them
to give more consideration to job creation.
Jobs for all
was a stated goal of civil rights leaders. Indeed the slogan of the great
civil rights march on Washington in August 1963 was “Jobs and Freedom.” Yet,
full employment was not the issue over which the historic battles of the
movement were fought. Freedom or civil rights came first. In this decade of
great social movements there was no mass mobilization for full employment.
Perhaps Martin Luther King was moving in that direction; he had begun to
emphasize economic—as well as—civil rights. Very late in his life he wrote:
“In our society it is murder psychologically to deprive a man [sic] of a job
or an income.”[43]
But the assassin’s bullet which hit him as he was about to stand in solidarity
with striking garbagemen left that prospect in the realm of speculation.
King’s untimely assassination stilled an important voice for jobs, just as
Roosevelt’s death two decades earlier had robbed full employment of
potentially its most effective advocate.
Welfare “reform.”
Although federal funds helped fuel the welfare explosion, Congress tried to
stem the expansion to which the War on Poverty had contributed. With
the 1967 amendments to the Social Security Act, a new, more illiberal Congress
took aim at escalating relief rolls and illegitimacy rates through an
attempted “freeze” on increased state AFDC costs attributable to desertion or
illegitimacy, and it also began the thirty-year effort that culminated in
stiff work requirements. Chairman of the House Ways and Means Committee,
Wilbur Mills, a conservative Southern Democrat, decried the failure of states
to develop programs to stem the rising rolls and illegitimacy. “ If there are
any jobs available for them [recipients], we want them to have them.[44]
The new policy, which
initiated the Work Incentive Program (WIN), disqualified adults and
out-of-school children from AFDC if they refused to accept employment or to
participate in training programs without good cause. Indicative of the extent
to which these policies were unnecessarily punitive is the fact that
“voluntary requests for training under the Work Incentives [WIN] program
exceeded the available supply, and compulsion became unnecessary.”[45]
Added to the work requirements were some work
incentives. The 1967 amendments contained a work incentive that exceeded a
1962 rule that for the first time had allowed deductions for employment
expenses: the first $30 of earnings, plus one-third of the remainder were to
be discounted. The new Work Incentive (WIN) program would also fund some day
care as well as placement, training and job creation.
WIN was not a successful
program, either in its initial, rather mild phase (WIN I), or in later stages
(WIN II and III), when it placed less emphasis on training or job preparation
and more on job placement. In fact, WIN was a loser. As interpreted by
officials of the Department of Health, Education and Welfare, fathers in the
AFDC program for unemployed parents, dropouts over sixteen, and a few mothers
of school-age children who had access to free day care ever had to register
for work under WIN I.[46]
The results of the first years of WIN were meager, indeed. Early in
1970, after about 19 months of implementation, WIN data took the shape of a
funnel, narrowing with each step of the process from the number screened for
possible referral to those who were actually employed after participating in
WIN. At the wide end were 1.5 million screened and at the narrow, 22,000
employed, or less than 1.5 percent.[47]
Considering that one-sixth of welfare recipients found employment
without WIN, these results were not promising.[48]
Welfare expert Gilbert Steiner points the finger at the limited number of
child-care slots in determining major responsibility for these results,
whereas manpower specialists Sar Levitan and Robert Taggart put the blame on
the critical shortage of jobs for welfare mothers.[49]
The findings of a study of WIN during 1973-1975 underscore the importance of
job creation. Subsidized public employment was a particularly effective tool
for increasing the employment and earnings of welfare recipients. But WIN had
only modest success in increasing employment and earnings in the private
sector.[50]
Disappointed
with the initial results of WIN, Congress passed the "Talmadge" amendments in
1971, requiring all recipients of working age, except women caring for
children under age six, to register for WIN. Further, states that did not
place 15 percent of those registered in jobs were to lose federal funds. In
practice, this was more a threat than an enforceable requirement. "The
principal reason,” according to an Urban Institute study, “is that there were
always more AFDC recipients who wanted to avail themselves of the services
offered by the work-registration program than there were funds available to
finance these services."[51]
Calling attention to the "severe job shortage" and other factors that rendered
most welfare mothers either unable to find work or unsuitable for it,
social-welfare historian, William Trattner, writes, "Rather than pass
legislation designed to deal with the causes of the problem or meet the needs
of the poor, Congress strengthened the more coercive features of the Work
Incentive Program...."[52]
According to the 1974
Manpower Report of the President, welfare recipients were usually offered
unskilled labor or low-level clerical jobs, typically characterized by high
turnover and low wages.[53]
Unfortunately the conclusions of the Report were ignored by subsequent
welfare “reformers”: “…research findings point to a paucity of jobs available
to welfare recipients at a sufficiently high wage level to result in the
removal of most family heads from the rolls.”[54]
Denial of labor market
realities for relief recipients is an old story that continued during the WIN
program. Thus, nearly all employers in a survey of rural communities held that
jobs were available for welfare recipients—despite the fact that only 2
percent of these employers actually had job openings for WIN participants.[55]
Having reviewed the early history of WIN, Brookings Institution analyst
Gilbert Steiner predicted that work training and day care would do little to
reduce welfare recipients or relief costs. It would be more realistic, Steiner
concluded, “to accept the need for more welfare and to reject continued
fantasizing about day care and ‘workfare’ as miracle cures.”[56]
Without serious efforts to create decent jobs for welfare mothers and fathers,
Steiner's recommendation was both sensible and humane.
Realism about the labor
market. At the end of the 1960s, two high-level commissions, both
appointed by President Lyndon Johnson, acknowledged the paucity and inadequacy
of jobs for less-educated and skilled Americans, particularly for African
Americans. One of these recommended job creation; the other being charged with
the problem of income maintenance rejected work requirements on the basis of
an insufficient number of jobs. Such realism about the labor market went
unheeded.
Appointed in July 1967 the
National Advisory Commission on Civil Disorders, the euphemism for the severe
riots that had broken out in one city after another, the National Advisory
Commission on Civil Disorders, was charged by LBJ to "find the truth and
express it in your report." Known as the Kerner Commission, after its
Chairman, Otto Kerner, a Democrat and Governor of Illinois,[57]
the Commission’s "Recommendations for National Action" began with employment:
"Unemployment and underemployment are among the most persistent and serious
grievances of our disadvantaged minorities. The pervasive effect of these
conditions on the racial ghetto is inextricably linked to the problem of civil
disorder."[58]
In the "riot cities" the Commission found that "Negroes were three times
as likely as whites to hold unskilled jobs, which are often part time or
seasonal, and 'dead end'--a fact that's as significant for Negroes as
unemployment."[59]
Consequently, the Commission recommended: continued emphasis on national
economic growth and job creation "so that there will be jobs available for
those who are newly trained, without displacing those already employed";
consolidation of existing education, training, job development and recruiting
programs to avoid duplication; and creation of two million jobs (one million
in the public sector and one million in the private sector) in three years.[60]
This was just one of the
recommendations of these commissions that was ignored. Unemployment rates
which were 3.8 and 3.6 percent for all civilian workers in 1967 and 1968 when
the Commission was studying the problem and making its recommendations, fell
to 3.5 the following year but averaged 5.5 percent in the first three years of
the seventies. For blacks, the rates averaged 6.8 percent in the last three
years of the sixties and 9.2 percent in the first three of the next decade,
and they climbed higher as the seventies progressed.[61]
Chaired by Ben W. Heineman,
top executive of the Chicago and Northwestern Railroads, the Commission on
Income Maintenance was appointed by President Johnson in January 1968 and
directed to "examine any and every plan, however unconventional ...."
[62]
The Heineman Commission delivered its report, Poverty amid Plenty, in
November 1969 and recommended: “the creation of a universal income
supplement program financed and administered by the federal government, making
cash payments to all members of the population with income needs"(their
italics).[63]
This was really a version of the guaranteed income or negative income tax
approaches that were devised during the sixties and seventies.
Unlike subsequent welfare
"reformers" the Commissioners considered work requirements coercive. "Since we
do not have employment for all those who want to work, employment tests lose
much of their meaning in the aggregate."[64]
The Commission was convinced that "the poor are not unlike the nonpoor.
Most of the poor want to work."[65]
A systematic study of how poor people, especially black recipients of
public welfare, feel about work was conducted at about that time and
corroborated the Heineman Commission's views. This research for the Brookings
Institution by Leonard Goodwin concluded that there are "no differences
between poor and nonpoor when it comes to life goals and wanting to work."[66]
Goodwin, however, found that failure in the workplace crushed the hopes of the
poor. Thus, women terminated from the WIN program without jobs became more
accepting of being on welfare and less inclined to try again.[67]
The Commission, which, like the Kerner Commission, did its work at a time of
very low, official unemployment, directly challenged the assumption that
"everyone who is employable could work at adequate wages," pointing out that
one-third of all persons in poor families in 1966 lived in families headed by
full-time, employed male workers.[68]
The Commission's proposed guarantee, then, would cover the poorly paid as well
as those without income. Thoroughly opposite to stated public policy which was
to prevent economic dependence, "the Commission ... concluded that there must
be a larger role for cash grants in fighting poverty than we have acknowledged
in the past."
[69]
Reforming Work and Welfare in the Seventies
Welfare
reform, job creation and full employment were all on the national agenda in
the 1970s, when the average unemployment rate (6.2 percent) was the highest
since the Great Depression. Yet, after a decade of debate and some legislative
enactment, the legacy was rejected welfare reform[70],
a national job creation program that again turned out to be temporary as well
as too little, and a full employment law that was powerless to prevent the
rise of unemployment from 6.1 percent in 1978 when the legislation was passed
to the post-Depression high of 9.7 percent, four years later. An interim goal
of four percent unemployment within four years was established by the
Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978; instead the
rate was over twice that amount (9.7 percent) in 1983. The only lasting reform
in the 1970s is a subsidy for low-wage work that is designated a tax credit
but is really a form of public assistance. The difference is that it doesn’t
aid the jobless.
Welfare reform and work
requirements. Presidents Richard Nixon and Jimmy Carter both proposed
welfare “reforms” resembling the negative income tax or guaranteed income
plans that were afloat at the time but differing from them in some important
respects. Both the Nixon and Carter plans would have provided a basic federal
income. In contrast to the various schemes for guaranteeing incomes, Nixon’s
Family Assistance Plan (FAP) would have been confined to families with
children, and it had work “requirements.” Carter’s Program for Better Jobs and
Income (PBJI) included the whole population but had work expectations and
different benefits depending on whether a member of the family was employed or
not. Both guarantees were below the official poverty standard but considerably
higher than allowances in low-benefit states.
Nixon
distinguished his plan from a guaranteed income by insisting that it was
"primarily ... an income supplement to reinforce work efforts and family
stability of those who can work but are not able to provide adequately for
their families."[71]
This was in contrast to the proposal of the Heineman Commision, which
considered it unfair to require work when jobs were not available. Yet, some
experts have pointed out that FAP would have amounted to an income guarantee,
for only one member of a family would lose benefits for refusal to comply with
its work requirements.[72]
It is signifiant that Moynihan who was a principal domestic advisor to Nixon
at the time used the words, “guaranteed income,” in the title to his book on
the FAP. The Administration's stated intention was to increase the
self-sufficiency of employable recipients by providing more training
opportunities and child-care services, but both were very inadequate in
relation to the number of eligible mothers and children.[73]
Observing that under FAP training would be geared to males, Jill Quadagno
infers that the intent was for “federal policy … [to] reinstate black men as
household heads by reducing the labor-force participation of black women.”[74]
However, FAP’s adoption of work requirements for mothers, except those with
children under six years of age, seems to be a move in the opposite direction.
Johnnie Tillmon, a leader
of the National Welfare Rights Organization (NWRO), pointed out that FAP would
deny poor mothers the choice of staying home with their school-age children or
going to work. Rather, they would be required to register for work,
regardless of the availability of adequate child care and without designated
labor standards for wages and working conditions.[75]
NWRO also objected to very low benefits that would not aid its constituents,
most of whom were from the higher-benefit Northern states.
Citing the conclusions of
“many researchers and activists,” historian Linda Gordon holds that “many,
perhaps most, ‘welfare mothers’ would like employment outside their homes.”[76]
Yet, the goals to which the welfare rights movement dedicated its resources,
did not reflect this preference. Indeed, Dona Hamilton and Charles Hamilton
emphasize that NWRO’s position during the FAP debate was weakened by its
failure to emphasize the critical issue of jobs: “A demand for jobs would have
dispelled many of the myths and assumptions about welfare dependency …[and]
would have exposed the hypocrisy involved in developing a mandated work policy
for welfare recipients when it was clear that jobs were not available for all
of them.”[77]
What Hamilton and Hamilton say about NWRO could be applied as well to most
welfare advocates at least since the 1960s-- until, handed a fait accompli
with TANF, they have begun, post PRWORA, to concern themselves with job
creation.
Opposition to FAP came from many quarters, including many
liberals who supported the NWRO in its campaign to “ZAP FAP” and Conservatives
who opposed adding millions to the welfare rolls.[78]
But powerful Southern legislators and ultimately lack of support from the
President himself were the real spoilers. While it has been argued that low
benefits were partly a function of southern states' limited fiscal capacities
or low per capita incomes,[79]
Southerners were no more friendly to higher benefits when Washington
offered to pay the bill. It was the preservation of a low-wage labor force
that mattered more. "There's not going to be anybody left to roll those
wheelbarrows and press those shirts" complained Georgia Congressman Phil
Landrum.[80]
Governor Lester G. Maddox put it this way: "You're not going to be able to
find anyone willing to work as maids or janitors or housekeepers if this bill
goes through...."[81]
"Many white Southerners," write Burke and Burke, "feared that FAP's guaranteed
income would shrink the supply of cheap labor, bankrupt marginal industry,
boost the cost of locally-produced goods and services, increase taxes, and put
more blacks into public office."[82]
Senate Finance Committee Chairman Russell Long-- of
“black-brood-mares-of-AFDC” infamy-- was particularly concerned that the
guarantee would pay people not to work, leaving them time to produce
illegitimate children.[83]
Civil right groups
consistently pointed out that FAP work requirements were unnecessary because
welfare recipients wanted to work.[84]
The final version of the FAP, HR 1, proposed a minimum wage for recipients
that was considerably less than the statutory minimum and that would have been
“tantamount to a differential wage for a large portion of the African-American
population.”[85]
According to some
observers, Nixon himself lost interest and certainly did not exert strong
efforts to influence Senators.[86]
Nixon’s Chief of Staff, H. R. Haldeman attributes a more Machiavellian
motive to the president in the first round of the FAP debate. According to
Haldeman’s diary entry for July 13, 1970, Nixon “wants to be sure it’s killed
by Democrats and that we make big play for it, but don’t let it pass, can’t
afford it.”[87]
Introduced by Jimmy Carter nearly five years
after the defeat of Nixon’s welfare “reform,” the Program for Better Jobs and
Income (PBJI) was distinctive in two important respects: it combined income
support and job creation in one program and recognized that it is unfair to
expect people to work if there are insufficient jobs or workplace supports,
especially child care. While PBJI combined aid for the employed and
non-employed poor in a single program, it divided them into two groups, those
expected to work and those not expected to work, with different treatment and
income guarantees. Those expected to work would receive wage supplements,
including an increase in the recently-enacted Earned Income Tax Credit (see
below, pp. ), federal help in finding employment, or one of 1.4 million
special public service jobs offered through the CETA program (see below,
pp. ) and paying the higher of the federal or state minimum wage. In
families with at least one child, these jobs were reserved for the "principal"
earner, that is, the person with the highest earnings or the one who worked
the most hours during the six months prior to application for job-search
assistance.[88]
However, analysis of the bill led to the conclusion that the number of new job
slots created by PBJI were insufficient to accommodate both the unemployed and
welfare recipients expected to work.[89]
Those "not expected to work" included the aged,
disabled, blind, and single parents whose youngest child was under seven
years. The adult in a single-parent family whose youngest child was seven to
14 years old was expected to work part-time. Thus, there was a limit to
support for full-time nurturing. By combining SSI, AFDC, state-local general
assistance, and food stamps in one cash program with a single eligibility
standard, PBJI would streamline the income-support system. PBJI offered higher
income guarantees to single mothers not expected to work than to families in
which the adult was expected to work, but lower incentives to work, for if
single mothers with young children worked, their incomes would be subjected to
higher cumulative, marginal tax rates than families with a member expected to
work.[90]
After an unsuccessful, eight-week search
for a private or public job, persons expected to work would be eligible for
the higher guarantee.
Carter's proposals ran into the same kind of
opposition that had defeated the similar Family Assistance Plan in 1972. PBJI,
too, would increase costs, expand the rolls, and raise questions of work
incentive.[91]
Perhaps the cost is one reason for Carter’s failure to support the plan
vigorously, for he had been adamant about wanting a zero-cost reform.[92]
Like FAP, PBJI ran up against the "veto coalition"--the South, business, and
the Republican Party.[93]
Of these, however, only the Southern legislators had been monolithic in their
opposition to FAP
PBJI was regarded as
patriarchal by some critics because, as NOW asserted, “the designation of
‘principal wage earner’ inevitably results in exclusion of the woman from
priority consideration for job training and placement.”[94]
Arguing that work requirements were unnecessary because people would work if
decent jobs were available, NOW called for full employment or a job guarantee
but also held that “true welfare reform must include minimum federal benefit
levels that respect the value of work done in the home by providing assistance
at an adequate level.”[95]
In this statement NOW supported employment for women and compensation for
reproductive work, a policy that would permit mothers choice between the two
types of work. While not consistent with women's equality, Carter's plan, in
contrast to FAP, the several WINs and welfare "reform" in the 1990s, would not
have forced mothers to work if there were insufficient jobs, training
opportunities and adequate child care.
The availability of the
EITC may reduce incentives to raise the wages of low-paid workers, thereby
contributing downward pressure on the entire wage structure. However, since
nearly all claimants get their benefits in a lump sum,[106]
they may remain aware of their paltry wages and of the need for a raise. There
is little research to date on how recipients perceive and use the EITC, but
one study based on a small sample of women in the welfare-to-work transition
found that most of them could not make an explicit link between the EITC and
work incentives.[107]
Nonetheless, some recent academic research credits the EITC with the dramatic
rise in labor force participation of single women with children since the
mid-1980s.[108]
If the EITC does take
pressure off the minimum wage, some analysts find this a desirable feature.
They point to the possible job-destroying effects of increases in the minimum
wage. These, however, have been seriously challenged by recent research.[109]
It is also claimed that minimum-wage rises are not well-targeted to the poor,
again a debatable point.[110]
The EITC also has targeting limitations in that two-thirds of its benefits go
to the nonpoor. While the very poor should remain a priority of public policy,
it is important to keep in mind that the poverty standard itself
underestimates poverty and that aiding individuals and families with incomes
above the poverty line is an anti-poverty measure in all but the limited,
official definition of the term.
The minimum wage was
already declining in value when the EITC was enacted and sunk much lower
during the years since then. Persons who worked, full time, year-round for the
minimum wage earned 120 percent of the three-person poverty level in 1968;
just over 100 percent in 1975; 70 percent in 1989, when the value of the
minimum wage was the lowest since 1950; and 82 percent in 1998.[111]
Interestingly, in 1998, the minimum wage, plus the EITC benefit for two
children, was 111 percent of the three-person poverty standard, compared to
these figures for the minimum wage alone: 120 percent in 1968 and 102 percent
in 1975.[112]
Rather than bettering the condition of low-income workers, the EITC has served
to offset the decline in the minimum wage. Moreover, for families with a
minimum-wage worker and more than two children or four or more persons in the
family, the EITC does not even provide an escape from poverty—even as measured
by a standard that has not been revised in over 30 years and that was paltry
to begin with.
The EITC lifts millions of
families out of poverty, indeed more than any other anti-poverty program. In
1996, 4.6 million people in low-income working families who would have been
poor without the EITC were raised out of poverty.[113]
Yet, poverty rates for families with children were 16.5 percent in 1996, when
the 1993 increase in benefits was fully phased in, compared to 13.3 percent in
1975 when the EITC was enacted.[114]
Although one is loathe to
gainsay a policy that puts more money in the hands of the needy, it seems more
desirable for workers to earn an adequate wage than to depend on a government
transfer. When they do so, their total earned income is counted toward social
security and unemployment insurance benefits whereas the part that consists of
the EITC does not. Instead of employers paying the full price of the wage
bill, the EITC has passed part of the cost onto taxpayers and government at a
time when there is reluctance to spend on other programs, notably cash
assistance for families with no earnings or housing subsidies for the poor.
Not surprisingly “leading business groups” called upon New York Governor
George Pataki to expand the state’s income tax credit. “Businesses,”observed
the New York Times reporter, “likes the credit because it effectively
raises the incomes of lower paid workers without any cost to their employers,
easing the pressure to raise wages.”[115]
Public service employment.
It took a recession and the return of high rates of unemployment for
Washington to become directly involved in job-creation once again. Increased
in response to a subsequent, deeper recession, job-creation programs were
eventually targeted to the hard-core unemployed and the disadvantaged instead
of to the victims of countercyclical unemployment. But once again, government
job creation was short-lived. This time it was fear of inflation rather than a
substantial reduction of unemployment that accounted for the decline and
repeal of employment programs. Indeed, unemployment was rising when job
creation was cut back.
Public service employment,
the major, job-creation measure of the 1970s, had small antecedents in the
1960s. Urban areas lacked the fiscal capacity to meet increasing demands for
public service.[116]
One approach to the shortage of jobs and public services was public service
employment. Anti-poverty programs had begun to employ neighborhood workers in
order to make services more responsive to the needs of low-income communities
and clients.[117]
Impressed with these services and concerned about job shortages for
disadvantaged groups, Frank Riessman and Arthur Pearl recognized that the two
needs—for public services and jobs—could be combined to create “new careers
for the poor.”[118]
Initially, Congress responded to this combination of unmet community and
worker needs through modest additions to the Economic Opportunity Act,
including a New Careers programs that trained some of the urban poor for
existing public-service jobs. As noted, the Kerner Commission, which
investigated the urban riots of the 1960s, called for the creation of one
million jobs in the public sector as a solution to the endemic poverty of the
urban ghettos.[119]
Proponents of job-creation programs used the Kerner Commission recommendation
to gain support for their programs.[120]
The Nixon administration
was willing to deal with underemployment through income support but was quite
opposed to government job creation until recession and politics forced its
hand. Although Nixon vetoed a 1970 bill that included authorization of a small
public-service-employment component, he signed the Emergency Employment Act (EEA)
a year later, when recession, partly brought on by the Administration’s
conservative economic policies, drove unemployment up to 5.9 percent and cost
Republicans losses in the 1970 elections.[121]
Serving only 3 percent of the unemployed (150,000 jobs)—far fewer than
the number who lost their jobs due to Nixon Administration policies—the EEA
was nonetheless important because it was the first general, public-employment
program since the Depression and the first antirecessionary jobs program to
emphasize public-service employment rather than public works.[122]
Although Nixon stopped
supporting public employment after his reelection, he did, under the pressure
of Watergate and in return for consolidation and decentralization of existing
manpower and training programs, agree to a small jobs component in the
Comprehensive Employment and Training Act (CETA) of 1973.[123]
The severe recession of the middle 1970s, “provided liberals…with the leverage
they needed over a conservative Republican president [Gerald Ford] to accept a
measure he would otherwise have blocked.”[124]
CETA grew considerably
under the Carter administration. Faced with the new stagflation, Carter’s
economic advisers considered it more efficient to deal with unemployment
through targeted job creation than macroeconomic stimuli that could heat up
the economy and exacerbate inflation.[125]
Under Carter CETA reached its zenith of 742,000 public service slots, up from
310,000 under Ford. Still, this represented only about 12 percent of the more
than six million unemployed persons in 1978—a much smaller proportion of the
unemployed than WPA served. In the first Carter fiscal year, the CETA budget
increased by 70 percent, and the Public Service Employment (PSE) proportion of
CETA funds grew to 60 percent, compared to 37 percent in 1975.[126]
Nonetheless, CETA served a small proportion of the unemployed in a time of
growing, mass unemployment. Indeed, with one hand the government gave a little
through CETA job creation and with the other, it took more away through its
restrictive fiscal and monetary policies.
In response to some real or
alleged problems Congress made changes that crippled CETA. In its early phases
there was a tendency toward “creaming” or giving jobs to the most employable
applicants and toward substituting CETA workers for regular government
employees, thus providing fiscal relief to localities. The amount of
substitution is itself debatable because in an atmosphere of severe recession
and state initiatives to limit taxes, CETA probably preserved services that
would have been cut rather than substituted for them.[127]
In late 1978, Congress addressed these problems by restricting eligibility in
PSE to the hard-core jobless, keeping wages very low, limiting employment to
the least skilled, and requiring prime sponsors (usually local governments) to
spend more money on training. These changes were the political kiss of death
for CETA. First, a program for the poor tends to be as unpopular and
politically powerless as its clientele. Second, CETA’s strongest lobby, local
governments, got less fiscal relief and consequently provided less political
support.[128]
Local government officials, who had been major supporters of CETA, were also
less than enthusiastic about changes that centralized the program and limited
their autonomy, such as strict monitoring by the federal authorities to reduce
mismanagement and fraud.[129]
Exaggerated, mismanagement and fraud, according to one expert, represented at
most one percent of CETA jobs.[130]
The enthusiasm for jobs
programs was short-lived. In addition to the consequences of serving a
constituency with less political voice in its later years, CETA suffered from
a very bad press that distorted its accomplishments. Like WPA, which was also
a favorite whipping boy, CETA was responsible for many useful services.[131]
Reviewing CETA reauthorization hearings in 1978, Bullock reveals that hostile
critics did not want to hear evidence contradicting their prejudices. Despite
reams of studies and other evidence, one of the main influences on Congress
was a negative Readers’ Digest article on a boondoggle.[132]
Finally, as unemployment rates dropped from 8.5 percent in 1975 to 6.1 percent
in 1978 and 5.8 percent in 1979, public concern shifted to rising inflation.
Willing for a
few years to create jobs as a countercyclical measure during a period of high
unemployment and eventually to target them to the hard-core unemployed,
political leaders became less supportive of employment and training programs
toward the end of the Carter
administration.[133]
Certainly, they had not accepted the reality of chronic unemployment and
underemployment or the responsibility for permanent expansion of jobs. Indeed,
a leader with deep ideological resistance to government job creation
like Ronald Reagan terminated CETA when
unemployment rates were climbing to their highest since the Depression and
with virtually no public protest.
Toying with full employment.
Higher unemployment served as an impetus, not only to employment and training
programs, but to already-pending, full-employment proposals, including
permanent government responsibility to create jobs for all those who want to
work and are not absorbed by the private sector. Representative Augustus
Hawkins, an influential member of the Black Congressional Caucus from the
Watts district of Los Angeles and Chair of the House Education and Labor
Committee’s Subcommittee on Equal Opportunities, was the guiding spirit behind
the 1970s’ effort to guarantee jobs for all. Hawkins’ one-minute address to
the House of Representatives, a week after he and Congressman Henry Reuss
(D-WI) introduced the Equal Opportunity and Full Employment Bill, conveys his
human-rights conception of full employment:
Assuring full employment
is the single most important step in the national interest at this time…. an
authentic full employment policy rejects the narrow, statistical idea of full
employment measured in terms of some tolerable level of unemployment—the
percentage game—and adopts the more human and socially-meaningful concept of
personal rights to an opportunity for useful employment at fair rates of
compensation.[134]
