Poverty, Welfare, and the Labor Movement

Poverty, Welfare, and the Labor Movement

WorkingWorkingWorkingWorkingWorkingUSAUSAUSAUSAUSA—Winter 2002–3 3

WorkingUSA, vol. 6, no. 3, Winter 2002–3, pp. 3–7.© 2003 M.E. Sharpe, Inc. All rights reser ved.ISSN 1089–7011 / 2003 $9.50 + 0.00.

FROM THE EDITOR

Poverty, Welfare, and theLabor Movement

THE PASSAGE OF SWEEPING FEDERAL WELFARE REFORM LEGISLATION IN 1996

was viewed by many as a universal remedy for reducing thewelfare rolls by placing strict limits on eligibility, mandating

work, and transforming poor women into “productive” members ofthe workforce. The Personal Responsibility and Work OpportunityReconciliation Act (PRWORA), a central plank of Newt Gingrich’sContract with America, was enthusiastically supported by PresidentBill Clinton and passed with bipartisan support. Supporters contendedthat the act was essential to improving the lives of women and theirchildren. Opponents of the act argued that the program would ut-terly fail, forcing women and their children deeper into poverty. Now,after six years of implementation, WorkingUSA brings together lead-ing experts to evaluate and analyze how welfare reform has fared.

This issue examines the impetus for passage of welfare reform, pro-viding a retrospective examination of the fate of the poor since Re-publicans gained control of the House of Representatives in 1994.The essays discuss poverty in the context of relentless corporate re-structuring and the weakening of organized labor’s bargaining power,which has restrained wage growth for low-wage workers. Tradition-ally recessionary periods have severely compromised wages by pro-ducing high levels of unemployment and slackening the demand forlabor. Unemployment declined to historic lows during the late 1990sas the economy produced millions of low-wage jobs for the workingpoor. Today, employed and unemployed workers face a recession withweaker government protection from market forces than at any timesince the New Deal.

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The papers evaluate the government and corporate forces behindthe erosion of state protection for the working poor. In the currentera, corporations helped shape labor market policies in underminingthe power of low-wage workers. Has the late 1990s economic boomcreated jobs that have improved the lives of low-income and poorfamilies and individuals? Has the power of low-wage workers changedvis-à-vis managers in the workplace? How have low-wage women andtheir families fared under the current economic downturn? The es-

says in this special issue attempt to answer the questions and evalu-ate the current state of poverty in the United States.

In the first piece, Frances Fox Piven observes that welfare reformhas not lifted most women out of poverty but, instead, is channelingthem into the burgeoning low-wage labor force. At best, Piven argues,some women leaving welfare for full-time work barely eke out enoughincome to support the most basic needs of their families. Other womenleaving the welfare rolls find jobs in the contingent economy or, moreoften, find only part-time and temporary jobs or no work at all. Thosewho find part-time and temporary jobs do not even qualify for un-employment insurance to tide them over until they secure a new job.Piven views the policy change as a comprehensive campaign by busi-ness to expand profitability and competitiveness through squeezingworkers who are most vulnerable by imposing labor market disci-pline and containing worker autonomy on the job.

In an examination of how Temporary Aid to Needy Families (TANF)disrupts the lives of women compelled by the state to leave welfare,Louise Simmons argues that the program has produced low-wage work,limited opportunities for economic advancement and huge strugglesin balancing demands of work and family. Since the national govern-

At best, Piven argues, some women leaving welfare forfull-time work barely eke out enough income to support themost basic needs of their families.



ment is dominated by neoliberal Republicans, new programs address-ing the needs of the poor are not in prospect. Nonetheless Simmonssuggests that the poor need to develop new approaches, includingunionization, living-wage campaigns, and public advocacy.

How have the working poor and people of color fared under therecession? Economists Heather Boushey and Robert Cherry assert thata plethora of jobs created in the mid- to late 1990s’ bubble for womenleaving welfare were, for the most part, low-wage positions that typi-

cally barely lifted women above the poverty rate. Moreover, the eco-nomic expansion failed to create jobs for African-American men dis-placed by privatization and industrial mobility. Boushey and Cherryconclude that, although poverty marginally declined in the late 1990s,economic deprivation increased among low-wage women and theirchildren. Compared to the previous downturn of the early 1990s,Boushey and Cherry observe, the current downturn is more severewhen measured in terms of employment losses, disproportionatelyhurting low-wage women.

The wide-ranging harm to the working poor created by welfarereform is catalogued by Max Sawicky, who reveals that the celebratedsuccess of the program fails to account for the effect of the economicboom from 1997 to 2001 that produced tight labor markets and aprofusion of low-wage jobs. The new recession endangers the eco-nomic fate of female heads-of-household who have left the welfaresystem for low-wage work and those expelled from TANF as the Bushadministration and the Republican Congress propose to intensify workrequirements.

Federal job training programs are not and have never been the so-lution. According to labor researcher Helena Worthen, the Workforce

Boushey and Cherry conclude that, although povertymarginally declined in the late 1990s, economic deprivationincreased among low-wage women and their children.

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Investment Act of 1998—predicated on the notion of skills-trainingfor the new economy—has failed to address the scarcity of well-pay-ing jobs. Poverty can be eliminated not through job training butthrough the availability of well-paying jobs. The author argues thatorganized labor must play a greater role in actively working withgovernment in jobs training and creation.

During past economic downturns, federal unemployment insur-ance provided workers with a cushion while they searched for work.

The program also penalized employers who made use of layoffs tocut costs by assessing unemployment taxes on the basis of experi-ence ratings. Chirag Mehta and Nik Theodore examine how employ-ers have reduced costs through outsourcing work to temporary staffingagencies, thus displacing the price of unemployment to temporarystaffing agencies and their workers. Outsourcing work, Mehta andTheodore found, reduces the cost for on-site employers while greatlyincreasing labor market turbulence even in times of economic growth,as temporary staffing agencies lay off workers to reduce their ownunemployment insurance costs.

How do workers and labor organizations resist the onslaught ofmarket-driven policies that reduce wages and increase economic inse-curity for low-wage workers? In a sweeping analysis of the living-wage movement, Margaret Levi, David J. Olson, and Erich Steinmandemonstrate that living-wage campaigns have successfully establishedeighty ordinances through labor-community coalitions that includeworkers, students, student groups, and religious organizations. Al-though the movement is still in its infancy, the authors argue thatthe successes demonstrate the potential for disparate groups to unifyaround a common agenda of reducing poverty through creating goodjobs.

In the first of three book reviews in this special issue on poverty,

Poverty can be eliminated not through job training butthrough the availability of well-paying jobs.



Ellen Reese examines Welfare Racism: Playing the Race Card AgainstAmerica’s Poor, by Kenneth Neubeck and Noel Cazenave, which ex-poses the long-standing centrality of racism in American welfare poli-tics. The reviewer notes that the book is especially revealing in thecurrent era, as politicians continue to use age-old racist stereotypesof the poor to eliminate welfare. Neubeck and Cazenave offer con-crete suggestions on monitoring welfare racism to those interested incombating racial and economic injustice.

Next, Staughton Lynd reviews Seymour Melman’s After Capitalism:From Managerial to Workplace Democracy. Melman provides a sweep-ing indictment of corporate mismanagement in the United States thatcreates high levels of inequality, promotes militarism, and excludesthe active participation of workers. Lynd observes that After Capital-ism makes a strong case for a socialist economy, but he wonderswhether the transformation is a reality today. The task at hand foractivists, says Lynd, is “to keep certain values alive and to survive ascommunities of struggle.”

Finally, Kevin Doyle reviews Unions and Legitimacy, by Gary Chaisonand Barbara Bigelow, an analysis of the decline in union legitimacyas a means to explain the weakening of traditional unions. To regaina meaningful position in the labor debate, the authors argue, unionsmust transcend a narrow, pragmatic vision. By demonstrating to con-stituencies that their activities are “the right thing to do,” unionsachieve the moral legitimacy crucial to their revitalization.

—Immanuel Ness

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Poverty, Welfare, and the Labor Movement