Milwaukee, Wisconsin and W-2

Bryan G. Pfeifer

A report issued
December 23 confirms what many W-2 critics have long charged: that, although
carefully concealed by politicians, big business, and the corporate media,
Wisconsin’s “welfare reform” has led to a catastrophic social crisis not seen in
Milwaukee in decades.

On a daily basis
the poor in Milwaukee, including thousands of children, face packed emergency
shelters in the midst of a bitterly cold Wisconsin winter, bare food pantry
shelves, and emergency rooms for lack of health insurance as a direct result of
the failure of W-2, concludes the report “Passing the Buck: W-2 and Emergency
Services in Milwaukee County.”

The report
documents that since the implementation of Wisconsin Works or W-2 September 1,
1997, private non-profit programs and churches “are providing the only safety
net for many families in need.”

employment and problems with the W-2 program and its implementation have
resulted in a growing number of persons who rely on emergency programs to meet
their families” most basic needs,” states the report.

Issued by the
Interfaith Conference of Greater Milwaukee, the Center for Economic Development
at the University of Wisconsin-Milwaukee, and the Institute for Wisconsin’s
Future, “Passing the Buck” tracks three primary areas from 1995-2000 vital to a
satisfactory standard of living: food security, housing, and health care.

The report’s data
was compiled by conducting five confidential interviews with directors of
community service agencies in the areas of food security, housing, and
healthcare, and a survey of 157 Milwaukee-area congregations to determine
services rendered by faith-based organizations and how emergency services
changed from 1995-2000.

The report’s goal
“was to assess how families are meeting basic needs in the absence of AFDC, to
determine whether community organizations have experience increased need during
the implementation of welfare replacement, and to evaluate the sustainability of
work-based, time-limited cash assistance.”

The report
concludes with numerous policy recommendations. A copy can be downloaded at

Key findings of
the study include:

  • Food-related referrals to
    community hotlines increased by 136 percent between 1996 and 2000.
  • A 49 percent increase in
    the number of people served by food pantries over the five-year period.
  • Referrals to emergency
    shelter by the centralized shelter hotline increased 53 percent between 1998
    and 2000.
  • Overflow homeless shelters
    served three times as many people per night in 2000 as in 1997. The gap
    between demand for emergency shelter and available space has increased by 406
    percent since 1997.
  • The amount of charitable
    health care provided by area hospitals doubled between 1995 and 1999 and the
    number of unpaid medical debts rose 82 percent.
  • Only 15 percent of
    congregations believed the situation has improved for families since 1995; 87
    percent of respondents reported receiving the same or more requests for
    assistance in 2000 compared to 1995.

The report’s
authors underscore the fact that these numbers were compiled during an economic
upswing. Under the current recession, officially in effect since March 2001, the
authors foresee a possible epidemic unless immediate action is taken.

“Despite the
economic expansion of the past few years, congregations have found themselves
doing more and more to meet the basic needs of low-income families,” said Marcus
White, Executive Director of the Interfaith Conference of Greater Milwaukee and
report co-author.

“We’re in a
recession now, which means people will need more help and congregations will be
in more of a pinch. We really need to ask ourselves if we want a society where
people work hard all day at low-wage jobs and then have to ask a church for food
each night to feed their kids,” said White.

Of Reform

Under the national
Welfare Reform Bill signed by former Democratic President Bill Clinton in August
1996, Aid to Families with Dependent Children, a guaranteed federal entitlement
program in effect for over 60 years, was dismantled. AFDC was replaced by a
time-limited, work-based act entitled Temporary Assistance to Needy Families

TANF lifted most
federal mandates on all 50 states, thereby allowing them to develop their own
workfare programs, as they came to be popularly known. Under AFDC states were
required to abide by strict federal mandates. With TANF (up for Congress
reauthorization this year), states were allowed to create their own limits and
programs with a bare minimum of federal oversight and regulation. Currently, the
maximum limit for TANF benefits is five years. If recipients use up this time
they are on their own to survive. States are allowed to choose their own limits
below the five year TANF one. Wisconsin’s is two years.

Policies directed
at “reforming welfare” first gained a foothold in the early 1990s in Milwaukee,
home of the $700 million arch- conservative Lynde and Harry Bradley Foundation.
The richest and most influential of the conservative philanthropic foundations,
Bradley funded the notoriously racist book The Bell Curve, helped
implement school vouchers, fund- ed the movements that overturned affirmative
action in California and Texas, and underwrote the development of W-2 through
the Hudson Institute.

The foundation’s
overall objective is the complete reversal of all government programs benefiting
the poor, working, and middle classes, including public education

Wisconsin became
known as a national leader in welfare reform by implementing a pilot program Pay
for Performance in 1996 as a precursor to the 1997 national legislation. This
program created incentives for county welfare agencies to reduce caseloads. Much
like the later W-2 program, Pay for Performance’s success was predicated on how
many people could be dropped from welfare and not on their quality of life after
leaving the program.

With the
beginning of W-2, Wisconsin created the most demanding workfare program whereby
private agencies with multi-year state contracts replaced counties and the state
in dispensing services to W-2 recipients.

The private
agencies, according to numerous investigations by the Milwaukee Journal
, and other media and community organizations, benefited from this
because profit motives were built “into the contracts that rewarded agencies for
providing minimum levels of service,” according to “Passing the Buck.”

W-2: A Failing

The facts presented
in “Passing the Buck” bolster claims that privatizing social services would
deliver untold devastation to Wisconsin, especially to women and children of
color, residing in poor Milwaukee communities.

Some critics of
W-2 have argued that the program was created to secure a reserve pool of cheap
labor for major corporations and non-profit service agencies. They further argue
that those in power used W-2 to batter down other long-held
government-controlled institutions like public education.

“Passing the
Buck” verifies the grievances of W-2 recipients and their supporters by
illuminating the onerous guidelines and other negative provisions of W-2 that,
despite small concessions, have been largely ignored by the state and Milwaukee

Features of W-2
include the aforementioned time-limits, a “job ready” category that enables W-2
providers to deny services to anyone deemed employable, state policies that
direct W-2 agencies to divert people from applying, forcing applicants to seek
help from family, friends, and neighbors before processing their applications,
or requiring a 60-day job search, and limited options for pursuing education or
skills development.

With state
contracts stipulating that private agencies administering W-2 are to receive
bonuses for reducing welfare “rolls,” the number of Milwaukee County W-2
recipients has declined 63 percent from 36,155 in 1997 to 13,351 in 2000.
Various private agency executives in Milwaukee have received six-figure bonuses
and other perks such as vacation packages for moving people off W-2, despite
clear evidence that these individuals needed more help.

Numbers Doesn’t Mean Success

As “Passing the
Buck” documents, many former W-2 recipients were pushed into low- wage,
non-union seasonal, or service-orientated jobs. In their rush for profits,
agencies instructed its social workers that met and interviewed recipients to
deny aid such as food stamps, childcare, and bus passes. Many W-2 recipients
have issued grievances about the demeaning and erratic behavior of social
workers who are being forced to shuttle recipients out of the program despite
real and justified needs. Independent investigations by a variety of sources,
including the Milwaukee Journal Sentinel, have confirmed this.

implementation of W-2 also made it more difficult to enroll in federal
entitlement programs, like Food Stamps and Medicaid. The conservative Hudson
Institute concluded that 71 percent of former W-2 recipients are still living in

Most glaringly,
the agencies didn’t track the former recipients. Thus, various research has
found that, at most, two-thirds of those who’ve left AFDC or W-2 since 1995
became employed, the rest are unaccounted for. The state freely admits that it
can’t determine their whereabouts or well- being.

W-2 proponents
claim that reducing persons from W-2 is a success, regardless of their quality
of life after leaving the program. Critics claim that this is a shallow outlook
and one that ignores enormous institutional social barriers, such as
discrimination based on class, sex, sexual identity, and race, and the
political/economic context in which W-2 was created and continues.

Noting that the
majority of those in need are single women with children who couldn’t survive
without help to meet basic needs, one congregation respondent said this
situation was caused by “the disaster of the W-2 program and its lack of real
success. There are many many people who have received no real assistance….
Expectations are ridiculous in some cases. Families are doubling up and doing
without especially healthcare… The number of poor and working poor has jumped
substantially. People are moving out more often leaving in their wake chaos and
unpaid bills simply because they can’t pay for utilities, etc.,” concluded the

Because evicting
tenants is costly and time-consuming, most landlords find other means to evict,
thereby overriding the legal process. Tenants also leave apartments when they
can’t make the rent. Therefore housing stability is difficult to quantify. Even
the rather conservative Apartment Association of Southeastern Wisconsin, a local
association of landlords, admits in a 1999 handout that the number of tenants
that vacate immediately prior to a formal eviction process is four to eight
times the number of actual evictions recorded.

Another area that
keeps the poor in debt is the emergency room. Lacking insurance or denied
Medicaid or other healthcare relief by a W-2 service provider, a recipient has
no choice but to use the emergency room, not only for crises but for basic
medical care, especially if one has children. This leads a poor recipient with a
low-wage job, or no job at all, mired in an often unrecoverable cycle of debt
causing untold social and psychological consequences for the individual and
society which can’t be quantified in any study.

Perhaps the most
shocking statistics in the report fall in the area of housing. “Since January
1997, the American Red Cross and Interfaith Conference of Greater Milwaukee have
operated an Emergency Overflow Shelter for women and children. In 2000, the
shelter opened four times as many nights in 1997, and the number of women per
night nearly tripled…. The difference between demand for and availability of
emergency shelter increased 406 percent between 1997 and 2000.” states the

Furthermore, on a
freezing mid-December night last month, the Milwaukee Rescue Mission, an
overflow shelter often used only as a last recourse, was completely full for the
first time in its decades long history.

“This research
shows how changes in the welfare system have affected Milwaukee’s communities,”
said Dr. Kathleen Mulligan-Hansel, of the Institute for Wisconsin’s future, and
report co-author.

“Since welfare
reform was implemented, communities have stepped in, investing more in programs
to support low-income families. We should be asking if this system is
sustainable or if there is a natural limit to how much community organizations
can do.”


Passing the Buck”
concludes with a call for immediate and long-term solutions on the state and
federal level beginning with a restoration of a government safety net and,
eventually, an end to privatization of government services.

“Observers and
policy- makers should question the sustainability of a system in which private
organizations take responsibility for providing basic support to low-income
families and families in crisis. As the experiment with welfare reform evolved,
the government “passed the buck” to community services. Evidence in this study
demonstrates that it is critical for the government to reclaim responsibility
for maintaining a safety for families in crisis,” the report concludes.

The report’s
recommendations include:

  • Improving access and
    removing barriers to existing support programs, such as Food Stamps and
    Medical Assistance;
  • Fully funding existing work
    supports, and removing onerous user fees and co-payments for working poor
    programs like BadgerCare;
  • Modifying or eliminating
    time limits, especially for those in compliance and those with multiple
  • Strengthening education and
    training provisions. Because education and training are critical to a
    satisfactory standard of living and “prevent a lifetime of low-wage
    work…federal TANF policy should provide support for them [W-2 and other state
    workfare recipients] to increase their skill levels so they can move out of
  • Ensuring access to work
    supports. The authors state that since fully funded work supports like
    healthcare, childcare, and Food Stamps are vital to the working poor they need
    to be adequately funded;
  • Restoring benefits for
    legal immigrants. Under TANF, legal immigrants are denied access to Medicaid
    and Food Stamps.

In a press
release announcing the findings of “Passing the Buck,” Pamela Fendt, of the
Center for Economic Development at UW-Milwaukee and report co-author, stressed
the need for urgency in implementing these recommendations.

“At the state
level it is critical to make it easier for families to access basic supports.
When W-2 was implemented many families lost their Food Stamps and Medicaid—the
very programs that were meant to ease their transition to work or augment
low-paying jobs,” said Fendt.

“In addition, the
safety net features within the W-2 program need to be improved.”             Z


Bryan G.
Pfeifer is an organizer with the Milwaukee-based labor and community
organization, A Job is A Right Campaign.