Article

The United States: Welfare, work and development

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Abstract

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). ...
Thesis
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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. ...
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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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Chapter
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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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