Policy Statement on Welfare “Reform”

Adopted by the NJFAC’s Interim Executive Committee on January 10, 1997

The National Jobs for All Coalition deplores the Personal Responsibility and Work opportunity Reconciliation Act of 1996 (PL 104-193) and calls for its repeal and replacement with real reform. PL 104-193 poses as “reform” and as work opportunity but is in reality neither. PL 104-193, which abolishes the nation’s 61-year entitlement for needy, dependent children, will increase unemployment, lower wages, and raise levels of poverty and inequality that are already unconscionably high.

The Coalition reaffirms its position that true reform requires:

  • Adequate income support for persons unable to work, caring for very young children or infirm family members, or denied opportunities to earn enough to support themselves and their families.

In the absence of our preferred policy of jobs for all and adequate income support, we recommend that Congress:

1. Determine Whether Jobs Are Available before Imposing Work Requirements

It is unreasonable to expect welfare recipients to find work when there are not enough jobs to go around. This is usually the case where welfare recipients live and can be expected to work. To determine job availability, Congress should initiate a monthly job vacancy survey. If there are too few suitable job openings to provide work for all unemployed persons, including persons on welfare and involuntary part-time workers, then all work requirements and time limits for the receipt of welfare benefits should be suspended. Suitable jobs should be defined as being reasonably accessible to the unemployed and roughly matching their qualifications.

2. Guarantee Workfare Participants Full Protection of Labor Laws, Other Entitlements, and Established Workplace Benefits:

  • Guarantee workfare participants at least the federal and state minimum wage;
  • Guarantee that workfare participants are covered by such laws as: the Social Security Act (permitting workers to earn social security entitlements); anti-discrimination laws (especially prohibitions against workplace harassment and discrimination in assignments); workers’ compensation laws (protecting workers against the risk of workplace injuries or illnesses); occupational safety and health laws (ensuring safe working conditions); and unemployment compensation laws (protecting workers who are involuntarily unemployed).
  • Guarantee workfare participants entitlement to the Earned Income Tax Credit (providing income supplements to low wage workers).
  • Guarantee workfare participants such established benefits as sick leave and paid vacations.
  • Guarantee workfare participants the right to organize and bargain collectively.

3. Create Jobs for the Unemployed

Whenever there are fewer job vacancies than unemployed workers (see #1 above), an employment program should be established with federal or state funding to guarantee jobs for welfare recipients and all other unemployed persons. Wages should be comparable to those paid for similar work (at least the applicable state or federal minimum wage). The mix of full and part-time jobs should attempt to reflect the qualifications of the unemployed and to provide useful services to the community. Participants in the program should be eligible for the federal Earned Income Tax Credit and enjoy the protection of all other laws designed to protect workers (see # 2 above). The employment program should last until the number of suitable jobs openings (as defined in #1 above) equals or exceeds the number of unemployed persons. Job Banks should be established by officials at all levels of government or by groups surveying the needs of their communities.

4. Strengthen provisions to assure that workfare participants do not displace other workers.

Threatened with the loss of benefits necessary to support their children, welfare recipients could be forced to accept workfare assignments or employment on virtually any terms offered. To prevent their exploitation and the displacement of other workers, welfare recipients must have the right to the same wages, benefits, and working conditions as those who perform similar work, and they must be protected against discrimination or discharge for exercising that right.

5. Guarantee child care to all parents who need it in order to remain employed, accept employment, or participate in education and training.

PL 104-193 essentially eliminates this guarantee for recipients of assistance. The Coalition believes that vital benefits such as child care should be made available to all workers, including welfare recipients.

6. Add post-secondary education to permissible activities for fulfillment of work activities.

Under PL 104-193 permissible work activities include high school or equivalent education but not post-secondary education. The Coalition believes that access to post-secondary education and allowances for living expenses should be made available to all workers, including welfare

Background Information on Welfare “Reform”

Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PL 104-193)

On August 22, 1996, President Clinton signed PL 104-193 which:

  • abolishes Title IV of the Social Security Act of 1935 (Aid to Dependent Children), Emergency Assistance to Families, and JOBS, the work and training program for welfare recipients;
  • establishes block grants to the states for Temporary Assistance for Needy Families (TANF) in place of Aid to Families with Dependent Children;
  • imposes strict work requirements for families receiving TANF without providing funds to meet those requirements and sets lifetime limits of five years for receipt of TANF benefits;
  • requires Food Stamp recipients to work or participate in a work program 20 hours a week and limits receipt of Food Stamps by the unemployed to a single 3-month period in any 36-month period;
  • denies Food Stamps and Supplemental Security Income to legal aliens, and also denies non-emergency Medicaid, TANF, and Title XX social services to legal aliens unless states pass a law providing such benefits to them;
  • narrows the definition of childhood disability covered by Supplemental Security Income and hence eligibility for the program;
  • slashes federal funding for low income programs by some $55 billion from the time of passage until the year 2002;
  • and makes other reductions in federally-aided public assistance programs.

Federal Entitlement Abolished: According to Section 401(b), “NO INDIVIDUAL ENTITLEMENT”: “This part shall not be interpreted to entitle any individual or family to assistance under any State program funded under this part.”

JOBS FOR ALL and Public Welfare Policy

The goal of the National Jobs for All Coalition, full employment at decent wages for all women and men who want to work, would reduce the need for some income support programs, especially those that compensate individuals for unemployment, underemployment and low wages. Nonetheless, the Mission Statement of the National Jobs for All Coalition, adopted June 1994, also calls for strengthening public income-support programs, especially in the absence of a guarantee of jobs with decent wages. The Coalition, moreover, favors the enactment of social policies available in other nations with comparable resources–programs such as family allowances, paid parental leaves, universal health insurance, and quality, affordable child care.

Interdependence of Public Income Support Programs and Full Employment: On the one hand, full employment increases tax revenues at all levels of government and makes it easier to finance social programs. On the other hand, such programs contribute to job expansion by increasing purchasing power, especially during economic downturns, and by directly employing individuals in the provision and administration of government benefits and services. Public income support and social services have played an important role in preventing an economic depression in the United States for over 50 years. In a nation where serious economic downturns were
frequent facts of life for over a century, this economic function of social welfare should not be overlooked. Yet, in addition to making substantial cuts in low income programs, Congress has failed to make adequate financial provision for future recessions.

TANF Will Increase Poverty and Inequality

Poverty and inequality already abound in the United States. According to the U.S. Bureau of the Census (1996), there were 36 million poor people in the United States in 1995, a year of economic recovery. In the world’s richest nation, one of every five children lives in poverty–many with less than half of an official poverty standard that substantially underestimates need and the size of the poverty population. Cross national comparisons reveal that U.S. families with children, despite our greater total resources per capita, have much higher poverty rates than their European counterparts (e.g., twice and three times, respectively, those of Germany and France). The Census Bureau also reports that the share of total family income of the highest-income 20 percent of families is 13 times the share of the lowest 20 percent. By the estimate of the Federal government itself, PL 104-193 will increase the poverty and inequality of millions of people, many of them children. Benefits to families with dependent children, it should be emphasized, have already fallen on average nearly 40 percent in constant dollars in the last 20 years. The combined value of food stamps and cash benefits for families with children falls below the official government poverty standard in all 50 states. Benefits for families, already meager, are expected to decline further under TANF.

Work Requirements Will Increase Unemployment and Lower Wages

Primarily concerned with reducing poverty and inequality through full employment at decent wages, the National Jobs for All Coalition deplores the work requirements of PL 104-193. TANF and the amended Food Stamp program are imposing work requirements and time limits on the receipt of benefits despite substantial evidence of unemployment and job shortages, particularly where recipients live and can be expected to work. Because it increases the number of job seekers without increasing the number of jobs, PL 104-193 will further depress wages and employment security for millions of workers and will weaken the trade union movement. Conspicuously absent from work experience provisions of PL 104-193 are requirements for: payment of the minimum wage, health and safety rights, unemployment and workers’ compensation, and collective bargaining rights–in short the protections of the nation’s labor laws and of entitlements guaranteed to other workers. As the Coalition has been warning for some time, there are insufficient safeguards against the substitution of workfare slots for regular jobs.

Welfare “reform,” as enacted in PL 104-193, purports to offer “work opportunity.” The new law forces welfare recipients to work but, in an economy with a chronic shortage of jobs, does nothing to increase employment opportunities. Welfare “reform,” as enacted in PL 104-193, is the very antithesis of the program of the National Jobs for All Coalition which seeks to eliminate unemployment and to achieve full employment at decent

NOTE: For additional background on welfare “reform,” work requirements, job creation, workfare, job vacancy surveys, community needs assessments for the purposes of creating useful jobs, and the effect of unemployment on the financing of income support programs, see the Coalition’s Welfare “Reform” Packet. For further elaboration see its book, Jobs for All: A Plan for the Revitalization of America (New York: Apex Press, 1994).

The Policy Statement on Welfare “Reform” was prepared for the Coalition by Gertrude Schaffner Goldberg, NJFAC Chair, and Philip Harvey, NJFAC Advisory Board member. The Coalition would like to thank Maurice Emsellem, Staff Attorney, National Employment Law Project, Inc., and Henry A. Freedman, Executive Director of the Center on Social Welfare Policy & Law, for carefully reviewing and commenting on the statement.