Phil Wilayto
June 30, 2000

Don't look to Wisconsin as model for welfare reform

MILWAUKEE -- In the Feb. 6, 2000, Minneapolis Star Tribune, authors John H. Hinderaker and Scott W. Johnson of the Minneapolis-based Center of the American Experiment presented an argument for why Minnesota should adopt the Wisconsin model for welfare reform. If nothing else, their article is a good example of how conservative propagandists falsely define a problem, conjure up racially charged stereotypes, and then offer "solutions" that just happen to benefit private, for-profit corporations.

The Wisconsin program, called Wisconsin Works (W2), has been held up as a national model primarily because the state's welfare rolls have dropped 92 percent since 1986, the sharpest reduction in the country.

Last December, the Hudson Institute of Indianapolis released a study conducted to determine what had happened to former AFDC recipients in Milwaukee County. Hudson is the think-tank that played a leading role in the development of W2, an effort underwritten by Milwaukee's ultraconservative Bradley Foundation.

Amazingly, the "study" was conducted through a telephone survey, guaranteeing that those who had suffered the most from W2 couldn't be contacted. Even so, the results were a clear indictment of the new program. Of the former AFDC recipients responding to the survey, Hudson reported that 22 percent did not "convert" to W-2 and didn't sign up for any other government program.

According to Hudson, those who didn't convert were people most likely to have serious obstacles to working, such as a disability or health problem, people with disabled children and people with no high school education or GED.

What happened to those thousands of single mothers with small children? Some of them became homeless. According to the Apartment Association of Southeastern Wisconsin, a landlord organization, the number of forcible evictions in Milwaukee County increased from 700 a year before W2 to well over 2,000 today. All the homeless shelters in the county are full to overflowing, with the increase primarily among women. In addition, the numbers of children taken into the foster-care program has skyrocketed.

Remember that this all took place during a time of economic expansion and low unemployment, and the only major socio-economic factor that had changed was the introduction of W2.

What about those who did find jobs?

Wisconsin's Department of Workforce Development, which oversees W2, did its own study of women who had left either AFDC or W2 in the first quarter of 1998. This study found that 38 percent of the women surveyed were not working six months after leaving the welfare system. Of those with jobs, 42 percent worked fewer than 40 hours per week and 19 percent worked fewer than 30 hours. The average hourly wage was $7.42, and the median was only $7. Sixty-eight percent reported they were "just barely making it from day to day," and many of the new jobs are through temporary employment agencies.

Advocates for W2 point to a wide range of services available to W2 participants. What they don't explain is that the private agencies contracted to administer W2 are allowed to keep whatever service funds aren't used. As a result, these agencies have adopted what is called the 'light touch' approach -- not volunteering information that isn't expressly requested.

The human costs of this policy have been devastating. In the first year of W2, the infant mortality rate in Milwaukee rose a stunning 17.6 percent, according to a report just released by Start Smart Milwaukee, a child advocacy group. In the same period, according to Dr. Patricia McManus, who serves on the state African-American Infant Mortality Task Force, the black infant mortality rate in the city shot up an incredible 37 percent. "Milwaukee took a major hit with the implementation of W2," McManus said.

Unfortunately, there's more. Between January 1996 and July 1999, enrollment in the federal food-stamp program fell by 32 percent in Milwaukee and 40 percent statewide, the largest declines in the country. A 1998 investigation by the U.S. Department of Agriculture concluded Wisconsin was failing to meet federal regulations requiring benefit agencies to inform clients of assistance programs available to them under the law. On the other hand, the W2 agencies are very good about telling people about local food pantries, which are now overwhelmed and unable to meet the growing need.

The same "light touch" approach has been applied to other programs, such as child care, transportation and job-related loans.

On the other hand, some people have done quite well under W2. For example, there are the five agencies contracted to administer the program in Milwaukee County. For the years 1997 to 1999, these agencies were able to pocket $23 million in unrestricted profits, plus $28 million in "unspent" money, some of which they are supposed to reinvest in the community.

Two of these agencies are private, for-profit operations, so the money went directly into private hands. The three nonprofit agencies were able to afford handsome executive salaries with generous fringe benefits.

Then there are the private companies that receive virtually free labor from W2 participants working under the "community service" job category. Hinderaker and Johnson described these jobs as "clerical or janitorial work for nonprofit organizations." In fact, many are women engaged in light manufacturing and industrial work for private businesses. The women are receiving their regular welfare check, while the employer pays no wages.

The conservative philosophy behind W2 holds that the old system of AFDC essentially trapped poor women into an intergenerational cycle of poverty, robbing them of self-esteem and the incentive to work, while "rewarding" them for having babies out of wedlock.

Hinderaker and Johnson build on this false stereotype, then raise the specter of a mass migration to Minnesota of poor, pregnant teenagers from Chicago, a city whose name is taken by many as a code word for the black community.

In fact, the average welfare recipient -- whether in the hills of eastern Kentucky or the inner city of Milwaukee -- had two children and spent less than two years on welfare.

Were there cases of families receiving benefits for longer periods? Yes, there were -- in the neighborhoods devastated by the factory shutdowns of the '70s and '80s. The resulting rise in unemployment among unskilled workers was further exacerbated by the massive introduction of hard drugs into low-income communities, the skyrocketing numbers of young men being sent to prison and the continuing social costs of the Vietnam War, including veterans suffering homelessness, mental illness and family breakdowns.

But don't expect conservatives to mention those issues as factors in the emergence of "intergenerational poverty."

W2 is based on a philosophy that blames the poor for being poor, one that completely ignores economic and social factors beyond the control of any individual or single community. It devises a system that forces people to work, regardless of their personal situation, while denying them both a living wage and a realistic support system.

But it does create a low-wage, captive work force that can bring super-profits to businesses. It does open the door to the massive privatization of government services. And it does obliterate the concept that the government has any inherent obligation to promote the general welfare.

And those achievements -- not the elimination of poverty -- were the real goals of the forces behind W2.