What's the real agenda on welfare reform?
Welfare (Aid for Families with Dependent Children) accounts for $14 billion of the federal budget, while corporate welfare (subsidies, tax-breaks and give-aways) account for $100 billion a year. What's wrong with this picture?
Is it really that the government doesn't have the money? Obviously not. Why would they want to make these painful cuts, then? Are they just mean? The answer is that the cuts themselves are another form of corporate welfare.
In an article in The Student Insurgent (Jan. 16), Julia Fox pulls together statistics illustrating that the new welfare law, The Personal Responsibility and Work Opportunity Act of 1996, "will require states to create 1.5 million new job slots for welfare recipients." She quotes the Center on Budget and Policy Priorities, showing that the average wage for recipients in a typical state's workfare program would be $2.42 an hour, because in most of these programs, workers are "paid" through their "grant"--the miserly sum received from 'welfare'. In many cases businesses are getting this labor for free! The subminimum 'wages' are paid by the state.
And, according to Fox, the Economic Policy Institute says that "If everyone on welfare finds a job, without displacing current jobholders, wages at the bottom of the labor market will fall 11.9 percent." Therefore, they concluded, the Act will cost low-wage workers $36 billion a year in lowered wages.
Who gets the $36 billion? Their employers, of course. Now you can see why corporate America is so excited about cutting welfare and 'personal responsibility.'
Other programs that are being cut are food stamps, Supplemental Security Insurance for the elderly and disabled, child nutrition programs, and on and on. And real hourly wages, according to Fox, have dropped 20.2% from 1973 to 1993. In the last year, third quarter 1995 to third quarter 1996, real median weekly wages dropped 1.5%. This is despite the rise in the minimum wage.