In the past few months, David Cameron, Nick Clegg and Iain Duncan Smith, Secretary of State for Work and Pensions, have begun a war on poverty that is more about defaming the needy than helping them. Despite high unemployment, the coalition has proposed, among other things, to consolidate the current income benefit programmes into one comprehensive work programme, which will make support contingent on harsher and less realistic requirements. “Do the right thing and we will back you all the way,” Cameron said on 20 April, “but fail to take responsibility and the free ride is over.” The image conjured is of an able but indolent man. Yet poverty in the UK is just as likely to affect a mother or a child.
More worrying is that the coalition seems to be taking as its model a welfare reform bill passed in America in 1996. Called the Personal Responsibility and Work Opportunity Reconciliation Act (PRA), the law, through sanctions and benefit limits, removed the last safety net for millions of poor Americans. Because numbers on welfare decreased – from 12.2 million in 1996 to 5.3 million in 2001 – the reform has been hailed as a success, but the economic and ethical intricacies of it are more complicated.
In the US, welfare does not have the larger connotation it does in the UK, where it comprises health care, education and other indicators of social well-being (as an American, I can say we never bothered much with those things). Nor does it refer specifically to unemployment benefits, which offer temporary relief to laid-off workers. Originally called the “mother’s pension”, welfare began as a programme that provided aid to widows with children. Then, in 1939, the Social Security Act was amended to expand the remit of federal aid, making welfare a more contentious issue. No longer were beneficiaries mostly white widows, but women who had been divorced, had never married, were abandoned, abused or born black.
Many welfare mothers at the time of the reform did, in fact, work, but for decades were characterised by the press and politicians as idle and deceitful. Ronald Reagan would talk about a “welfare queen” who drove her Cadillac from benefit office to benefit office, making false claims. The message was simple and Cameron and Clegg seem to know it well: poverty is due not to embedded social inequalities but to the moral failings of individuals.
This proved popular in mainstream America, where anxieties about race and social mobility are all-pervasive. For 61 years, the US welfare programme, properly known as Aid to Families with Dependent Children (AFDC), was ill-funded and under threat. In 1996, Bill Clinton dismantled it through the PRA.
The new law concentrated on getting poor women into work, and instituted limits on how long they could get help – no more than two years in a row, and no longer than five years in total. Whereas federal funding increased according to need under AFDC, individual states under the PRA received funds only if they cut their enrolment figures, which they could do by pushing women into “workfare” jobs (for which they do not always receive even the minimum wage) or by cutting them off altogether via sanctions. The law tightened eligibility requirements to extremes: no longer were lone women with children under three exempt from working, nor were children born while their mother was on welfare covered.
Economically, the law made little sense, at least for those at the bottom. By forcing millions of poor women into low-wage work, welfare reform flooded the market and increased competition for even the worst jobs. Companies benefited because workfare programmes offered them desperate workers who could replace better-paid, often union-supported ones. Why pay a janitor $6 an hour when you could get a workfare mother for $1.50? It is not surprising that only 10-20 per cent of those who leave the new welfare system attain an income above the poverty level.
Perhaps the most disturbing aspect of the reform was that it redirected funds which could have helped women become economically independent, through work and education, to programmes that encouraged them to retreat from society and rely on men for economic security. The act channelled millions into promoting marriage to welfare recipients, a move that both George W Bush and Barack Obama expanded through “faith-based” initiatives. As one sceptical caseworker put it in Sharon Hays’s 2003 study of welfare reform, Flat Broke With Children, this approach offered far less security: “Their husbands can leave them; their employment experience won’t.”
But the goal was never about helping women so much as shaming those who strayed from tradition. While many US politicians support the rights of middle-class women to stay home with their children, lone welfare mothers with children over the age of one do not have this option. Nor can they receive aid unless they agree to interact with ex-husbands over child support – a scary prospect for many women.
According to one 1997 study conducted by the McCormack Institute and Centre for Survey Research, which looked at a random sample of welfare recipients in the state of Massachusetts, 65 per cent had been victims of domestic violence at some point in their lives. Although the PRA supposedly exempts these women from this rule, it’s up to social workers to judge these delicate cases and they have very little incentives to do so, financial or otherwise.
In pushing their welfare-to-work agenda, Cameron and Clegg have vowed to use the same tactics found in the PRA. On 30 July, Duncan Smith warned that the benefits system was “on the verge of collapse” and needed reform. An official proposal is due soon, but the coalition has proposed “a new welfare contract” that promises an array of new sanctions. Also following the US, Cameron has suggested that he would spend £1bn on promoting marriage.
If the coalition enacts its plans, the poor will fall into deeper poverty. This will probably be easy to obscure. In the US, because a caseworker’s primary job is to lower caseloads – by cutting benefits or discouraging the needy from applying – enrolment numbers have increased by less than 10 per cent since the start of the recession in December 2007. But the need is greater than ever. Child poverty is up. Unemployment has doubled. And food stamp allocation has increased by 40 per cent.
As the US welfare expert Gwendolyn Mink has pointed out, lone mothers have been hit hardest. But the problem isn’t that they do not work, as politicians would have us believe. In fact, 83 per cent of them do, though they are still twice as likely to be poor as the general population because of factors such as biases in unemployment relief and wage inequalities. The stark truth is that these mothers and their children are struggling to cope and, given welfare’s demise, will continue to do so for some time to come.
Cutting through the state
In its drive to eliminate the bulk of Britain’s £149bn Budget deficit within this parliament, the coalition has targeted welfare spending. Of the £32bn cuts it plans to make above those intended by Labour, £11bn will come from state benefits. In his “emergency Budget”, George Osborne announced a series of measures that provoked outrage from Labour and led to accusations that “the Nasty Party” never went away.
From 2011, child benefit will be frozen for three years, the health-in-pregnancy grant will be abolished and the Sure Start maternity grant restricted to the first child. In addition, tax credits will be reduced for families earning more than £40,000, housing benefit will be reformed with a maximum limit of £400 a week, and public-sector pensions will rise in line with the Consumer Prices Index, rather than the generally higher Retail Prices Index.
Conversely, Osborne has left benefits for those over 60 largely untouched. The coalition has maintained its expensive promise to restore the link between pensions and earnings, and has promised to safeguard pensioners’ free bus passes, free TV licences and winter fuel payments.
Osborne has since hinted at further reductions in the welfare budget as he seeks to prevent cuts as high as 25 per cent to departments including education, defence and local government.