We all make mistakes. In 1996, I ventured a silly notion at the end of a grant-funded project study that criticized the over-optimistic labor market assumptions behind U.S. “welfare reform.” Welfare “reform” was a euphemism for the elimination of poor families’ entitlement to basic family cash assistance in the name of “welfare-to-work” and “work first.” My fellow researchers and I (working under the rubric of the Midwest Job Gap project) showed that the U.S. economy was generating far too few decent-paying low-skilled jobs to absorb the millions of poor mothers being pushed into the job market by the bipartisan “Personal Responsibility and Work Opportunity Reconciliation Act.” There wasn’t enough employment “opportunity” out there for welfare “reform” to meaningfully reduce poverty in the U.S., we argued.
Nonetheless, I found it necessary for some reason to hint that there might be a “silver lining” to the vicious policy in question. Maybe, I suggested, poor people would be treated with more respect in the U.S. since it would now be clearer than ever that most of the nation’s worst-off citizens were employed. I was thinking of opinion surveys I’d seen showing that the working poor were held in much higher regard than “the welfare poor” by the public and by policy makers.
Surrendering Basic Rights
Who was I trying to kid? In the late 1990s, at the peak of the “Clinton boom,” the brilliant left author Barbara Ehrenreich began the participant-observatory research for what became her bestselling 2001 book Nickeled and Dimed: On Not Getting By in America – a harrowing account of her attempts to pay her bills and maintain her dignity while working at the bottom of the American occupational structure. Ehrenreich wanted to know how anyone could make it on $6 an hour without benefits as a hotel maid, house cleaner, waitress, and Wal-Mart sales “associate,” working in the precarious region between fading public benefits eligibility and good jobs? She found that the nation’s lowest-status jobs were both physically and mentally exhausting and that one such job was not enough to pay for decent food, clothing, and shelter.
But what most particularly struck Ehrenreich about life at the low-wage end of the “Fabulous Nineties” was the remarkable extent to which working people were “required to surrender…basic civil rights…and self-respect” thanks to employer practices that helped “mak[e] ours not just an economy but a culture of extreme inequality.” The humiliations she witnessed and experienced included routine mandatory drug testing, intrusive pre-employment tests full of demeaning questions, rules against “talking” and “gossip” (against organizing, often enough), restrictions on trips to the bathroom, abusive rants by over-bearing supervisors, petty disciplinary measures, stolen labor time, and the constant threat of being fired for “stepping out of line.” She learned as a waitress that management had the right to search her purse at any time.
So much for the notion that Bill Clinton and Newt Gingrich’s welfare “reform” (elimination) might restore some dignity and honor to the poor by moving more of them off the dole and into the paid workplace.
Two Cruel Jokes: The Minimum Wage and Poverty Level
Things have gotten worse for low-wage U.S. workers since Nickeled and Dimed hit the bookshelves. Real hourly wages for those at the middle of the wage distribution have stagnated since 2000, consistent with deeper trends across the long neoliberal era. But no group of workers has suffered more than those at the very bottom. Americans with only a high school degree or less have actually seen their wages fall since the turn of the millennium.
One part of the problem is that the U.S. minimum wage is a bad joke. If it had kept pace with increases in U.S. labor productivity since the 1970s, it would be $18 an hour today. Instead it sits at a pathetic $7.25, which translates (assuming full-time year round work) into $14,500 per year, well below the notoriously inadequate federal poverty level for a three-person family ($19,790).
The most that “liberal” Democrats in Washington seem ready to pretend to fight for is an increase of the minimum wage to $10 an hour, that is, to a mere $20,000 a year for low-wage workers fortunate enough to work 40 hours a week 50 weeks in a year.
Which brings us to another bad joke: the U.S. poverty level. According to the Economic Policy Institute’s heroically researched Family Budget Calculator, the real cost of a minimally adequate no-frills standard of living for one parent with one kid in Iowa City, Iowa, is $48,235. That sounds high until you add up the monthly expenses: housing ($853), food ($369), child care ($684), transportation ($459), health care ($891), other necessities ($313), and taxes ($450), for a total monthly outlay of $4,020. Go to the San Francisco metropolitan area and the cost of a basic family budget for one parent with one kid is $70,929. In the Chicago area, it’s $53,168. Make it two parents and two kids in Iowa City and the cost is $66,667.
It is absurd not only that the US federal poverty level (based on a hopelessly antiquated 1950s formula that multiplies a minimum food budget three times) is so low but also that it is not adjusted for significant geographic variations in the cost of living across US metro areas.
The EPI’s figures are worth keeping in mind the next time you hear the Chamber of Commerce or the American Enterprise Institute express horror at the notion that the minimum wage should go as “astronomically” high as $15 an hour. Even such a dramatically increased minimum wage translates into just $30,000 a year for a full time worker fortunate to stay employed full time.
With most Americans’ wages stagnating for more than a decade and with the lowest paid workers’ wages shrinking, it is no wonder that half of the more than 24 million Americans who rely on food banks for basic nutrition are employed. The cost of living just keeps going up.
“Put a Bullet Through Your Head”
Psychological abuse from employers remains very much a problem for the working poor. As the working class activist and journalist Bob Simpson reported from Chicago last year, a McDonald’s worker named Carmen Navarrette was “told that she ‘should put a bullet through her head,’ because she had requested permission to go home after becoming very ill at work. She is a diabetic and had just been released from the hospital.” The daughter of a different Chicago fast food worker spoke “about how her mom comes home crying because ‘the manager would scream at her and yell mean things. And right now she is pregnant and he makes her carry more than she is supposed to and that’s not good for her. But he says he doesn’t care.’….On top of …[the] economic burden” that goes with working poverty in the U.S., Simpson noted, “comes the stress of cruel verbal abuse and the threat of arbitrary discipline without fair hearing.”
Back to “welfare reform.” How’s that forgotten experiment in neoliberal “tough love” doing these days? As the Center for Budget and Policy Priorities (CBPP) reported to Congress three weeks ago, Temporary Assistance for Needy Families (TANF, the program that replaced AFDC, Aid for Families with Dependent Children under the 1996 welfare “reform”) provides cash assistance to very few needy families and lifts far few children out of “deep poverty” (incomes below half the federal poverty line) than did its predecessor, AFDC – this while poverty has risen in the current century. CBPP Vice President Ladonna Pavetti’s testimony to the U.S. House Ways and Means Committee reads like something out of Charles Dickens:
“The national TANF average monthly caseload has fallen by almost two-thirds — from 4.7 million families in 1996 to 1.7 million families in 2013 — even as poverty and deep poverty have worsened. The number of families with children in poverty hit a low of 5.2 million in 2000, but has since increased to more than 7 million. Similarly, the number of families with children in deep poverty hit a low of about 2 million in 2000, but is now above 3 million. These opposing trends — TANF caseloads going down while poverty is going up — mean that TANF reaches a much smaller share of poor families than AFDC did. When TANF was enacted, nationally, 68 families received assistance for every 100 families in poverty; that number has since fallen to just 26 families receiving assistance for every 100 families in poverty…In ten states, fewer than 10 families receive cash assistance for every 100 families in poverty.”
On the eve of its elimination in 1995, AFDC raised 62% of children who would have otherwise been in deep poverty. It saved 2,210,000 children from life at less than half the poverty level. Fifteen years later, TANF did the same for a mere 629,000 children, lifting just 24% of children who would have otherwise been deeply poor. U.S. welfare payments were in fact never high enough to permit poor mothers to escape the necessity of participation in the job market, but, as the Public Broadcasting System recently reported, “welfare checks have shrunk so much that the very poorest single-parent families [now] receive…35 percent less than they did before welfare-to-work began.”
That is disgraceful in and of itself. It is doubly shameful in a time when poverty has expanded while wealth and income have concentrated in ever fewer hands (the top 1% garnered 95% of the nation’s income gains during Obama’s first administration), bringing the nation to an openly acknowledged New Gilded Age of savage inequality and transparent plutocracy.
Welfare to Work?
Welfare to work? As Pavetti told Congress, most of the early employment gains among single mothers that were seen after TANF’s creation in 1997 have vanished thanks to the disappearance (after 2000) of the briefly favorable labor market for lesser skilled workers that emerged in the late 1990s. The success of “work first” programs, which emphasize getting participants into the labor market quickly during the late 1990s, is vastly overstated. Although employment increased, the vast majority of former welfare recipients pushed into the job market did not attain stable employment even at the height of the unsustainable, debt-leveraged Clinton expansion. And today, after two predictable (and predicted) capitalist recessions (one epic in nature) and with another recession looming, U.S. states “spend little of their TANF funds to help improve recipients’ employability.” TANF recipients report that TANF “welfare to work” programs typically involve little more than direction to short-lived, commonly seasonal low-wage jobs and that serious training and placement programs are unavailable and without funds.
“Welfare to work” is a scam to cover the slashing of government’s responsibility for the nation’s most vulnerable citizens in a society whose “free market” system offers ever fewer real opportunities for stability and upward mobility through employment while conferring vast government subsidies and protections and on the wealthy corporate and financial Few.
Welfare Kings: The Big Banks
To be sure, government welfare is alive and well – for the corporate and financial Few. As Bloomberg noted two years ago, reporting on research from the International Monetary Fund:
“the largest U.S. banks aren’t really profitable at all…the billions of dollars they allegedly earn for their shareholders [are] almost entirely a gift from taxpayers…The top five banks – JPMorgan, Bank of America Corp, Citigroup Inc., Wells Fargo & Co,. and Goldman Sachs Group Inc…,the banks occupying the commanding heights of the U.S. financial industry – with almost $9 trillion in assets, more than half the size of the U.S. economy – would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.”
By “corporate welfare,” Bloomberg meant not just the massive bailouts the big banks received after helping crash the economy in 2008 and 2009, but also and above all the reduction of their borrowing costs by the federal government’s policy of loaning them money at low to zero interest rates.
It isn’t just in the financial sector, of course, where big, politically influential corporations receive giant government subsidies and protection, all free from the “tough-love” “free market discipline” of “welfare reform.”
Fight for 15 and for Dignity
The U.S. working class struggle for a Living Wage that has emerged in recent years in connection with the Fight for Fifteen – for a minimum wage of $15 an hour (still below basic family budgets in all U.S. metropolitan areas) – is more than an economic struggle. It is also a political and moral struggle for basic decency, for self-respect, and for dignity.
Connecting economic oppression to psychological mistreatment in her widely read book, Barbara Ehrenreich guessed in Nickeled and Dimed “that the indignities imposed on so many low-wage workers – the drug tests, the constant surveillance, being ‘reamed out’ by managers – are part of what keep wages low. If you’re made to feel unworthy enough,” Ehrenreich wrote, “you may come to think that what you’re paid is what you’re worth.” It was an important point. Debilitating shame and the related psychological battering of working people in the all-too unprotected, de-unionized, and hidden abode of the workplace is part of how the employer class rules over low-wage workers in “the land of freedom.”
Inspiringly enough, however, tens of thousands of those workers in the U.S. have in the last two years stood up to tell their bosses and the nation that they not only need but also deserve more than miserable wages and denigration on the job. “The [workers] of the Fight for 15 campaign,” Simpson noted last year, “want a world where a decent standard of living and respect for all is the norm.”
The fight for 15 is also a fight for dignity. Respect for workers, the struggle’s participants know, will only be won from the bottom up, through collective and militant action. It will never granted from the top-down by elites who have little more respect for a Walmart or McDonald’s worker than they do for a TANF recipient or for one of the nation’s more than 2 million prisoners.
Paul Street is an author in Iowa City, IA. His latest book is They Rule: The 1% v. Democracy (Paradigm, 2014).