The United States: Welfare, work and development

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It has long been claimed that social welfare programmes harm economic development. These programmes, it is alleged, depress work incentives, divert scarce investment resources to ‘unproductive’ social services and create a large underclass of dependent individuals. Welfare reform in the United States intends to reverse these allegedly negative economic effects by requiring welfare clients to work. It also hopes to reduce poverty. This article examines these claims. It discusses the welfare reform programme and concludes that its impact on both economic development and poverty has been minimal. Policies that transcend the current obsession with work, promote sustained economic development and invest in human capabilities are more likely to succeed.

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... The 1990s were marked by significant changes in welfare policy and substantial economic growth. At the same time, there has been a substantial decline in the number , 11.3 percent in 2000(Census Bureau, 1999Midgley, 2001). These data could be supportive of the view that poverty and welfare dependency can be reduced through the aggressive imposition of work requirements. ...
... Examining the literature on job characteristics indicates that many leavers are engaged in low-paying service occupations, particularly in restaurants, retail sales and low-skilled clerical work. Midgley (2001) reported that most welfare leavers who are working do not earn enough to raise their standard of living much above the poverty line. ...
... Those findings reveal that the new welfare program since 1996 pushes people with fewer employment skills into the labor market where they find jobs at lower-pay and less adequate support than those in the earlier support system. Although they seek jobs, lack Many studies support the view that many poor people are, in fact, entrepreneurial and most of them are not welfare poor but working poor (Midgley, 2001;Stoesz, 2000;O'Connor, 2000). Women and single-mother earner families were more likely than men and married couple families to be classified as members of the working poor (Kahne, 2004). ...
... US research into the effects of national welfare reform (which introduced work obligations for beneficiaries, sanctions for noncompliance, and benefit time limits) has been a major focus of social policy investigation since the early 1990's. Midgley (2001) presents an interesting summary of this research, arguing that the impact of US welfare reform on national and local economic development has been minimal (p284). He claims that US research has cast significant doubt on many popular assumptions around the interaction of work, welfare and development (ibid, p289); important considerations when evaluating welfare and employment programmes and the effects of changes to welfare regimes. ...
... Midgley argues that this is due in part to the low average wages earned by welfare leavers, but also due to the fact that many welfare leavers end up working intermittingly (and often returning to welfare) (p291). Midgley (2001) also reviews the assumption that welfare reform promotes a transition from economic idleness to remunerative employment, noting that welfare recipients are not economically inactive in the first place. Rather, welfare recipients earn substantial amounts of undeclared income, supporting the view that "poor people are, in fact, entrepreneurial" (ibid). ...
... reflectingMidgley's (2001) summation that welfare recipients are often economically active. A large amount of voluntary (often maraebased), community, and other unpaid work by beneficiaries and others is important in the district, but impossible to quantify (although a governmentfunded study is currently underway looking at the level, and impact, of voluntary work in the district). ...
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New Zealand is one of the only OECD countries to have attempted to impose spatial constraints on residency as a policy tool in its welfare to work strategy. The Limited Employment Locations (LEL) policy introduced in 2004 created 259 limited employment location communities throughout the country in an attempt to influence the residential location of Ministry of Social Development (MSD) clients so they are, “in the right place at the right time to take advantage of growing employment opportunities” (MSD, 2004a,p1). The overarching goal of the LEL policy is to get more New Zealanders into employment (MSD, 2004b, p1) – in doing so reducing New Zealand’s overall unemployment rate and ensuring that, at a time of low unemployment and skill shortages, there are adequate numbers of job seekers available (MSD, 2004d, p2). Unemployment beneficiaries have a responsibility to seek work and, according to the new policy, if they move into any of these mostly small, rural communities without access to reliable transport, they risk losing their benefit following the end of a sanction process. The LEL policy thus effectively limits the portability of the unemployment benefit (UB), creating a new geography of welfare eligibility. Through analysis of policy documents and interviews with MSD and Work and Income staff, this research outlines and critically evaluates the motivations and behavioural assumptions behind the LEL policy. The research then uses the results of a commissioned panel survey, and results of field interviews exploring the views and actual behaviour of UB recipients, to test the motivations and behavioural assumptions behind the policy. The research uses as its case area the Opotiki District in New Zealand’s Bay of Plenty Region. The research traces the evolution of the zones themselves and describes a range of reactions to the policy. One of the primary findings of the study is the importance of ‘home’ in the motivation of beneficiaries moving to LELs, particularly Maori beneficiaries who dominate movement to LEL areas in the district. This movement is shaped by the desire to maximise living standards and to take advantage of the social, family, and cultural networks that these areas offer. Returning to home LEL communities occurs in spite of the new policy and the risks of benefit sanctions that it presents, and there is also very little evidence to date that the LEL policy is encouraging beneficiary movement to areas of better employment prospects.
... Many have long claimed that social welfare programs harm economic development. It is alleged that these programs depress work incentives, divert scarce investment resources to " unproductive " social services and create a large underclass of dependent individuals (Midgley, 2001). Others note that economic events, such as changes in household composition, disability status, and labor market supply cause entrance to poverty (McKernan & Ratcliffe, 2003), and it is the duty of society to respond to the needs of those who have entered poverty. ...
... The program was supplemented by food stamp vouchers, housing assistance, and medical treatments. The cost of the AFDC program, including food stamp assistance but excluding medical treatment and housing, increased from $3 billion in 1952 to $55 billion in 1978 (Midgley, 2001). In 1965, approximately 400,000 people were served by food stamps; by early 1990, 26 million people were receiving food stamps (Midgley, 2001). ...
... The cost of the AFDC program, including food stamp assistance but excluding medical treatment and housing, increased from $3 billion in 1952 to $55 billion in 1978 (Midgley, 2001). In 1965, approximately 400,000 people were served by food stamps; by early 1990, 26 million people were receiving food stamps (Midgley, 2001). The AFDC caseload increased from 2.3 million in 1950 to 14.2 million in 1994. ...
This case study investigated eight welfare recipients and their perceptions of the effectiveness of the job training programs in which they participated in an effort to understand the domains in which welfare-reliant individuals exhibit a commitment to work. Specific issues addressed by this qualitative study included the individuals' perceptions of (1) the program effects on escaping poverty and becoming self-sufficient; (2) the impact of the program focus on the participants' achievement and empowerment; (3) employment and the prospects of getting off welfare, both before and after program completion; and (4) recommendations for improvement in designing such programs. It is clear that all participants in the study found resolution to the tensions in their lives through the programs. Life skills training was critical in enhancing the self-esteem of the participants, providing them the tools necessary to overcome their fear of independence and allowing them to experience their own definition of success. Each participant in the study wished for more time in the program. Most participants felt the program was a gift and verbalized the value of supportive services on-site.
... Although no uniform definition for neoliberalism exists, many scholars agree that it represents underlying values that support and maintain the status quo, promotes individualism, market fundamentalism, and privatization (Hasenfeld & Garrow, 2012;Midgley, 2001;Mullaly, 2007;Ritzer, 2008). While neoliberalism provides stability and support to societal systems, it also promotes economic inequality, dependency, and individualistic values; all of which can be restricting to community organizing and social change (Choudry & Shragge, 2011;Pyles, 2010). ...
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Although community organizing has historic and current roots as a mode of practice, characterized by people coming together to collectively address unmet needs and/or challenge inequality, neoliberal trends beginning to form in the 1980s have negatively impacted community organizing. Neoliberal values, which promote individualism, capitalism, the existence of welfare states, and reform from solely within the system are concerning to the future of community practice. This article provides a critique and analysis of the impact of neoliberalism on community organizing in three areas: The influence of evidence-based practice on dictating how community organizers practice, a lack of focus on social movements in community organizing, and the professionalization of community organizing, which marginalizes non-professionals engaged in community organizing. This article exposes potential problems arising from within community organizing as a result of neoliberalism. In order to uncover and analyze the major effects of neoliberalism, we propose a theoretical framework that combines critical theory and Foucault's work on social control. We end the analysis by providing recommendations for practitioners of community organizing as well as for educators teaching about community organizing.
... This is achieved through a work first approach using short-term interventions and harsh sanctioning (Lødemel & Stafford 2002). As expected there is little evidence that US welfare reform following TANF is alleviating poverty or exclusion, despite reducing case loads and making budgetary savings in the short term (Midgley 2001). ...
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During the market transition in Eastern Europe, social support mechanisms shifted from employment-based measures to means-tested ones. This restructuring, along with an overall decrease in social support and economic productivity and an increase in unemployment, meant that these payments were often inadequate to address the large rise in poverty during this period of time. Little research, however, considers whether individual-level payments were effective in reducing poverty. This paper considers the efficacy of these individual-level payments in Bulgaria, Hungary, and Romania, using two-wave panel data. It shows that state transfers to individuals reduced their poverty in all these countries. Thus, while the level of payments may have been inadequate to eliminate the adverse effects of the market transition, the payments themselves were beneficial to individuals and reduced their poverty.
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The purpose of this research was to explore the relationship between intimate partner violence (IPV) and women's participation in the informal economy (both legal and illegal) and their impact on economic well-being. This research was part of a National Institute of Justice (NIJ) study that was concerned with women's survival of childhood and adult abuse. For the 285 women that were in this sample, there were positive, medium correlations between IPV and various types of informal economic activity. Illegal informal economic activity, institutionalized informal economic activity, incarceration and physical abuse negatively impacted women's economic well-being.
Raising unemployed youth's work commitment would be requisite for engaging them in sustained employment, particularly when they are choosy about jobs despite their low employability. Possible ways for the raising include training, counseling, and job referral, which allow youth to upgrade their work skills and experience self-actualization. The latter would be the essential means of empowerment to foster youth's competence and autonomy, which in turn are crucial for work commitment. Examination of the effects of empowerment is the objective of this study, which surveyed 134 unemployed youth in Hong Kong, China. They included 71 school leavers and 51 who were not students in the preceding year. Results show that the school leaver maintained significantly higher work commitment than did the other unemployed youth. However, the difference became insignificant after controlling for work experience, marital status, and paternal education. As such, work commitment was significantly higher in the youth who had experience in working with people, not lived with a spouse, and had a father with higher education. Particularly, the positive effect of working with people endorses the importance of the fit of service work to the postindustrial society, such as Hong Kong. In support of the empowerment thesis, the youth's experience of self-actualization and work skill exhibited significant positive effects on work commitment. For the school leaver particularly, attendance at employment counseling indicated a significant positive effect on work commitment. Furthermore, attendance at vocational training and soft skill training generated significant positive effects on self-actualization and work skill respectively. All these findings lend support to the empowerment or human capital development approach to elevating unemployed youth's work commitment.
: This article takes on the challenge of what Robert Proctor calls “agnotology” (the study of ignorance) to analyse the current assault on the British welfare state by think tanks, policy elites and conservative politicians. The assault is traced back to the emergence of the Centre for Social Justice think tank, founded in 2004 by the current Work and Pensions Secretary Iain Duncan-Smith. I argue that a familiar litany of social pathologies (family breakdown, worklessness, antisocial behaviour, personal responsibility, out-of-wedlock childbirth, dependency) is repeatedly invoked by the architects of welfare reform to manufacture ignorance of alternative ways of addressing poverty and social injustice. Structural causes of poverty have been strategically ignored in favour of a single behavioural explanation—“Broken Britain”—where “family breakdown” has become the central problem to be tackled by the philanthropic fantasy of a “Big Society”. My agnotological approach critically explores the troubling relationship between (mis)information and state power.
In common law jurisdictions, legislative reforms to their welfare states are frequently framed in terms of their innovative nature. However, such legislative reforms, on the contrary, may be representative of a more historical ‘puritan’ view of welfare and citizenship, the doctrines of which originate in the aftermath of the sixteenth-century Protestant Reformation, and which developed in the following centuries. The core values of this era have always remained within welfare legislation and policy in common law states, and appear to have experienced a resurgence in recent times. These puritan values manifest themselves within welfare legislation under certain distinct themes, which will be expanded upon. The extent to which values of puritan Christianity renders welfare legislation in common law welfare states distinct from that of other welfare states is also a theme which is examined. In addition, the utility of this ‘puritan’ approach towards welfare law and policy is also discussed.
Policy could be studied on the basis of three different models: ideological, social science, and policy sciences. Policy in accordance with ideology may not necessarily rely on solid rigorous research to back it up. Policy made solely in accordance with a rigorous social science model might be able to demonstrate a causal relationship between a given policy and desired outcomes, and in the process establish a clear role for good research in the policy process. But it often fails to account for the larger social and political context in which policy is formulated. Good policy should be based on rigorous social science research, while also factoring in the values of the broader society, that is, ideology. This would imply that in order to bridge the gap, that good policy should be formulated in accordance with the policy sciences model because it connects the rigorous methodology of the social sciences with the larger social policy context, that is, the broader policy process. When analyzing the reform of 1996 within the framework of these models, it becomes clear that while the legislation is highly ideological, it is not based on any serious research that would satisfy the criteria of the social science model. It fails the policy sciences model, in part, because its absence of clearly defined objectives, or a single objective, makes the task of measurement difficult. On the contrary, this legislation is a good example of why the policy community would do better to rely more on the policy sciences. Copyright 2005 by The Policy Studies Organization.
This research provides a preliminary descriptive analysis of the impact of new welfare sanctions on recipients living in a southern metropolitan region. The data from this phone survey indicate that many families report considerable hardship no matter why they exited from welfare. Compared to those who left voluntarily, those who were sanctioned off welfare were significantly different in terms of having unmet medical needs, going without food, and having their utilities turned off. Given the high number of problems reported and the low income reported by these respondents, it is nor surprising to find that only 10 percent of former recipients who were sanctioned off of welfare feel that they are better off now than when they received cash assistance. These problems can represent a significant disruption in the lives of children and their parents.
Over the past decade, public assistance caseloads have increased rapidly to an historical high point and then decreased with even greater speed to their lowest level in decades. Several recent papers have focused on the rise in Aid to Families with Dependent Children (AFDC) caseloads in the early 1990s and the turn-around in the mid-1990s. This research indicates that both macroeconomic factors and program factors appear to be important for these changes. A key question is whether these recent declines are permanent, and how much they might turn around in a more sluggish economy. This paper focuses on the relationship between recent caseload changes and the overall economy, comparing estimates from a wide variety of models using both annual and monthly data. By using monthly data, which is available through late 1998, this paper also presents several rough estimates of the impact of welfare reform post-1996. The Food Stamp program has also experienced major program changes, although it has remained relatively unchanged for single mothers and their children who once participated in AFDC. This paper also provides a detailed comparative analysis of AFDC/TANF caseload changes with Food Stamp caseload changes.
This article examines the relationship between work and welfare in poor, female-headed families by tracing the process through which single mothers work their way off welfare. Analysis is based on monthly data from the Panel Study of Income Dynamics (PSID) for the years 1984-86. The results reveal substantial labor market activity among single mothers on welfare not previously found in studies of welfare dynamics analyzing annual data. A majority of women work while they are on welfare, and more than two-thirds of welfare exits occur through work. Human capital investments are key determinants of welfare exits through work, while a large family size impedes particularly rapid job exits from welfare.
The War on Poverty was declared by the Johnson administration in the 1960s after a slew of analysts, journalists, and politicians rediscovered and began to publicize the persistence of poverty in the United States. 1 In Lyndon B. Johnson’'s initial State of the Union message to Con-gress and the nation in 1964 reported that his administration “"today, here and now, declares unconditional war on poverty in America. ……Our aim is not only to relieve the symptoms of poverty, but to cure it, and above all, prevent it.”" 2 Despite such fervent views however, the issue of pov-erty persists within our own communities and extends far past the boundaries of our neighborhoods. These poverty-stricken people are often labeled as outcasts, pushed out into the inner-city ghettos and physically and emotionally detached from the broader af uent population in all regions of the country. This trend has changed dramatically in current discus-sions of poverty to the suburbs, which I will touch upon in a latter portion of this paper. However, it is evident that poverty does not have de nitive resolutions, but initiatives to eliminate and reduce poverty are widespread. These initiatives vary in the degree of implementation in different regions, groups, races, and in the level of opportunity that the underprivileged poor too often fail to obtain. Poverty analysts in the United States hold differing views on how best to combat such a malicious form of human degradation and this pa-per will illustrate the perspectives present in the discussions of poverty reduction in the United States to depict and adequately narrate such a contentious issue that is  lled with abundant discord. Michael Harrington’'s in uential book, The Other America: Poverty in the United States received critical acclaim in the early 1960s. He was a prominent left-wing social activist and one of the most well known socialists of his time. 3 His magnum opus was the basis of a series of initiatives to combat poverty that were  rst adopted by President John F. Ken-nedy. During his 1960 campaign he came face to face with poverty in West Virginia and after reading Harrington’'s lengthy book review in New Yorker magazine by Dwight McDonald, he ordered a formal study on poverty to create antipoverty ini-tiatives that would serve as his platform for his 1964 presidential campaign. 4 Pres-ident Johnson was briefed on Kennedy’'s study and decided to implement the issue nationwide, thus creating the War on Pov-erty. In Harrington’'s introduction to his book, he contends, “"the poor are increas-ingly slipping out of the very experience and consciousness of the nation.”" 5 His in-troduction outlines and gives reasons for the persistence of poverty by identifying large groups of people that are affected by poverty more so than others, such as dispossessed workers, minorities, the farm poor, and the aged. Throughout his introduction, he implicitly refers to those in poverty as the “"other America”" and be-gins to draw a subtle picture of who those people are by explaining that “"the poor existed in the Government reports; they were percentages and numbers in long, close columns, but they were not part of the experience.”" 6 There are no faces or personality to the numbers because they are virtually neglected by the government reports. In essence, he mentions this bit of anecdotal information to depict poor people as being invisible, part of separate culture, and essentially removed from mainstream society due to a lack of politi-cal representation in Congress.
We investigate the nature and sources of the decline in the level of employment of working age males in Australia in recent decades, drawing on both Australian Bureau of Statistics labour force survey data and census data. Alternative measures of the male employment rate are considered before settling on two complementary measures: the full-time employment rate and the full-time equivalent employment rate. The latter measure weights part-time jobs according to the fraction of a full-time job they represent. We then go on to estimate models of the determinants of these two employment rates using data from the population censuses conducted between 1971 and 2001. We construct a pseudo panel by ‘stacking’ the seven census data sets (Deaton 1997, Kapteyn et al 2005). This facilitates the tracing of birth cohorts over time, in turn making it possible to control for cohort unobserved heterogeneity that may bias cross-sectional estimates of effects of other characteristics, in particular age and year/time period. We produce evidence that a number of factors have contributed to the decline in male employment, including growth in educational enrolment and attainment, the decline in couple households with dependent children, growth in income taxes and welfare replacement rates, growth in labour productivity and changes in the structure of labour demand away from traditionally male-dominated industries. Significantly, we find that, all else (observable) constant, more recent birth cohorts have higher employment rates than earlier birth cohorts.
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Lessons for welfare reform
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