Welfare cuts lower area wages, increase pain for jobless

Welfare cuts lower area wages, increase pain for jobless
Jenny Brown
September 1998

On October 1, hundreds of people in Alachua County will lose their welfare benefits, but no-one has figured out how folks who are unemployed and have children are supposed to get by. That was the conclusion of a discussion at the Civic Media Center on August 3, held by the Community Coalition Against Poverty.

It is two years since Clinton signed 'welfare reform' into law, and the clock started ticking for those who are receiving assistance through Aid to Families with Dependent Children, now called TANF, Temporary Assistance to Needy Families. Although the national limit on assistance is 5 years, Florida decided to cut people off after two years. Those who survive can apply again after a break and get two more years of assistance.

Meanwhile, corporate welfare (which some call: "Aid for Dependent Corporations") has been untouched by "welfare reform." The cost of welfare for people with low incomes combined with food stamps is $38 billion dollars a year, while direct federal subsidies to corporations cost $50.9 billion, and federal tax breaks account for another $53.3 billion. The mortgage interest deduction, which benefits middle income and affluent families, accounts for another 50 billion.

The board that oversees the "WAGES" program in Alachua and Bradford Counties claims some success in getting people "off welfare." According to them, 121 welfare recipients have found jobs, but the average wage is $5.39 an hour, nearly two dollars lower than the minimum wage in 1970 (adjusted for inflation.)

People can also lose their welfare if they fail to jump through the many hoops that are put up in their way. For example, if you miss an appointment, you lose your check for a month. If you miss a second appointment (assuming you still have an address at which you can be informed of such things) they start paying your check to a "substitute payee," who supposedly handles the money to take care of your kids. Then, according to participants in the forum, they can look at taking your kids since you no longer have money to support them.

There was never any doubt that welfare needed reforming. People were barely getting enough to get by, there was virtually no opportunity to get education, those with small children couldn't afford childcare and there was no provision for it, the whole process was humiliating and a nightmare of red tape, and nothing was being done to reduce the unemployment rate or raise low wages, which caused the problem in the first place. Plus, housing costs have gone through the roof and many families were only able to receive medical care (Medicaid) if they didn't have a job. Unfortunately, the welfare reform package that was passed in '96 fixed few of these problems and created some new ones.

The main new part of the law "Forces welfare recipients to work for their benefits--workfare--without basic job protections," according to the Labor Party, which just released a working paper, "Welfare Reform: An Attack on Workers."

"TANF eliminates the federal guarantee [of] a right to minimal economic security. Even if a parent ...is willing and able to work, there is no guarantee of a job or of any further assistance once the time limits expire."

Why are they doing this?
The law didn't save much money, compared to the money the federal government is shelling out for corporate welfare or the military. And it doesn't seem to be helping welfare recipients get out of poverty. In fact, the Congressional Budget Office estimated before the law was passed that 2 million children will be pushed into poverty. So who is benefiting?

According to the Labor Party, "Workfare with a shortage of jobs means increased competition [between workers]. That competition means employers can pay less for the same job because of the increased number of applicants. For the bottom third of the workforce, this means an average loss of 11.9% of wages. When those losses are totaled it comes to a $36 billion loss of wages. But lost wages are only lost to the workers. They are a big find to employers, who will gain $36 billion. In other words, workfare turns into corporate welfare by lowering wages "

Additionally, corporations are getting workers without having to pay them "Under the old welfare law," reports the Labor Party, "Work assigned to welfare recipients had to be in the public or non profit sector... Under TANF workfare workers can be assigned to companies who get access to a pool of absolutely free labor. ... In Baltimore, the Omni Inner Harbor Hotel was using welfare recipients working eight hour shifts five days a week who got $410 [monthly] from the state and a $30 weekly stipend from the hotel. The hotel got free labor and did not have to hire regular workers."

Also in Baltimore, a big coalition campaigned for and won a living wage ordinance which required the City to contract only with companies paying a "living wage" of $7.70 per hour. To get around this, the contractors used workfare workers instead, who they paid $1.50/hour. Under the old law, it was illegal to lay off workers "with the effect" of displacing them with welfare recipients. Now the law says "with the intent" which is much harder to prove.

Also, corporations may get up to $2,500 as a tax credit for each welfare employee they hire.

According to the Kensington Welfare Rights Union, the welfare law is a violation of the United Nations Universal Declaration of Human Rights, which the U.S. signed 50 years ago, along with hundreds of other countries. The UN Declaration's article 23 states: "Everyone has the right to work, to free choice of employment, to just and favorable conditions of work and to protection against unemployment. Everyone who works has the right to just and favorable remuneration ensuring for himself [or herself] and his [or her] family an existence worthy of human dignity and supplemented, if necessary, by other means of social protection. ... Everyone has the right to form and join trade unions."

The welfare reform law violates this charter in several ways.

1. Workfare workers don't have a right to unionize. In New York, 32,000 workfare workers are denied the ability to join a union, even though they want to affiliate with one.

2. Workers are not paid minimum wage. In fact, they are not really wages at all, they are forced to work to receive their tiny "grant" and food stamps. Many are actually prevented from going to school by the work requirement.

3. Workers do not have a choice of jobs. They are forced to take whatever job they are assigned to, or face loss of all benefits.

4. Workfare workers are not legally covered by OSHA, the Occupational Safety and Health Administration, and therefore have no right to safety protection on their "jobs" and no recourse because they can't be in a union and they can't quit or they'll lose any chance of getting benefits.

Locally, the Community Coalition Against Poverty is working to get out information about what is happening with the welfare law. You can reach them by calling Harriet at 378-1138.

The Kensington Welfare Rights Union is based in Philadelphia and sponsored a Freedom Bus Tour this year to record and highlight the human rights violations all over the country so that they can make a case to the UN. They can be contacted at P.O. Box 50678, Philadelphia, PA 19132, (215) 763 4584
(http://www.libertynet.org/~kwru).

The Labor Party is a two year old party based in the labor movement which is working to amend the U.S. Constitution to guarantee everyone a job at a living wage. Memberships are $20 and you will receive a terrific monthly newspaper. To join, send $20 to Labor Party, P.O. Box 53177, Washington, DC 20009.

8 Welfare Myths
Myth: Welfare costs a lot compared to other government programs.
Fact: It costs 14.8 billion, about the same as the budget to operate 5 aircraft carriers for a year. Food stamps cost 23 billion. The military costs 300 billion. The mortgage interest deduction costs 50 billion.

Myth: Welfare recipients have a lot of kids, that's why they're poor.
Fact: 43 percent of families receiving welfare have one child, and 73 percent have 2 or less. Families receiving welfare have fewer children on average than families not receiving welfare.

Myth: Welfare recipients don't have enough education to hold a job.
Fact: A recent study of single mothers who receive AFDC found that over a 24-month period over half of the mothers worked; 41% worked approximately 1,000 hours per year and only 9% were not either working, attending school, or caring for infants during the two years.

Myth: Welfare recipients are lazy and don't want to work.
Fact: There are not enough jobs to go around. The unemployment rate in the U.S. is 7.5% (when you include those who have stopped actively looking for ajob.)

Myth: Welfare recipients are mostly teenage moms.
Fact: Only 7.6% of recipients are mothers under 20 years old.

Myth: Welfare recipients are mostly African American.
Fact: Welfare recipients are predominantly white.

Myth: Welfare is too generous.
Fact: In Gainesville, a mom with two kids who has subsidized housing receives $258/month.

Myth: Poverty is an individual, moral problem.
Fact: The U.S. has the largest percentage of low-wage workers, when compared to 15 other industrialized countries, according to the Organization for Economic Cooperation and Development (OECD Employment Outlook, 1996.)