Welfare as a tool to regulate labor markets?

But, what about, helping the poor??

First some history highlights:

  • First poor laws (17th century England); the ‘undeserving’
  • Speenhamland laws (localities subsidize wages–similar to today’s EITC)
  • US welfare–local phenomenon, political machines in late 19th century, parallel development of the social work profession
  • What about pre-industrial societies?

Capitalism

  • Economic system (versus command economy)
  • Supply/demand; private property; entrepreneurs; markets, unemployment . . . profit
  • Inherently dynamic system — some level of unemployment is the norm, mass layoffs the painful exception (the federal govt. no longer tracks these …).
  • Welfare–though the previous point implies its necessity, the ‘deserving/undeserving’ dichotomy often prevails (especially for certain kinds of welfare programs/assistance)

The authors’ (Cloward and Fox Piven) argument:

  1. Capitalist economies are dynamic. Some level of unemployment is a permanent and necessary feature of the system.
  2. Relief has historically been a local phenomenon, available to the ‘worthy’;
  3. Economic disruptions occur frequently; Major disruptions (e.g., the Great Depression, Industrialization) are rare, but will occur; the complexity of economies makes them hard to predict, though;
  4. Mass unemployment and lack of social safety nets associated with major disruptions are likely to lead to civil unrest;
  5. Unchecked, unrest may lead to social movements, the mobilization of those most affected by the disruption;
  6. The problem can be so massive that no amount of tinkering can resolve it (e.g., unemployment hit 25% during the Great Depression);
  7. The government, in order to preserve the capitalist system, and with much counterpressure from powerful industries, may have to intervene directly (offer direct relief, which could be in the form of cash or in-kind benefits). Occasionally (somewhat less likely or frequent in democracies) the government responds aggressively, even violently, perhaps when its leaders feel they can get away with it and not suffer serious political repercussions.
  8. If the direct relief addresses the problems and eases the unrest, the relief system tends to contract, leaving a shell (mainly of services available to the ‘deserving’–those unable to work and support themselves), and enforcing once again low-wage work among the able-bodied by making welfare benefits unattractive or difficult to receive.

So, welfare as a means of controlling wages and quelling civil unrest. The evidence:

The Great Depression

  • Massive unemployment–the unemployeds’ numbers increased five fold from 1929 to 1933.
  • Social movements: Elderly; Veterans (and the Bonus Army), Huey Long’s ‘rednecks‘; ‘share our wealth’ (a populist movement seeking redistributive tax reform); the unemployed (the ‘able-bodied’), the elderly
  • groups occasionally became violent, attacking welfare offices, for instance

Federal responses

  • Hoover: Denial, supply-side policies, companies should maintain payrolls
  • FDR, John Maynard Keynes (‘demand-side’ policies), and the New Deal
  • Social security

    • The Social Security Act of 1935 included old age pensions, unemployment insurance, and assistance for the disabled, elderly dependents, widows and orphans
  • Tax reform (progressive [vs regressive], graduated)
  • Section 7a of the NLRA-right for labor groups to organize and right to bargain collectively
  • FERA–Federal Emergency Relief Act–direct relief, monthly subsidies, 20 million people were on the welfare roles by 1934. As one administrator remembered it, goal was ‘to distribute as much as possible, as fast as possible, to as many as possible.’
  • Public investment was huge
    • Employment: Works Progress Administration (WPA); Civilian Conservation Corps (CCC)
  • Opposition, pushback from the business community . . . why? What effects?

‘Period of relative stability’

  • Economic changes in the 1950s–Industrialization of agriculture
  • Migration of blacks–20 million–why? Where?
  • Between 1950-69, 1 million farms disappeared (meaning, were consolidated)
  • farm output increased by 45%
  • farm labor decreased by 45%
  • ‘Relative stability’ turned out to be racist

    • forced off welfare rolls during growing season
    • ‘residence laws’ used to prevent migration
    • ‘midnight raids’, ‘man in the house’ rules
    • women and children over 50% of workforce
    • Those removed from welfare rolls in South overwhelmingly African American

    So, why was there little or no protest?

    1. The migration was gradual–it didn’t occur all at once, as migration during the Dust Bowl did;
    2. Unemployed in agriculture are generally a dispersed population, not concentrated in the cities, making mobilization and organization more difficult;
    3. Racism–can be found in most any locality, but is more overt and pervasive in the South;
    4. Migration–people merely left (rather than stay and protest …).

Turmoil in the 1960s

  • Unrest in the cities (e.g., Watts, Detroit)–job opportunities not evenly distributed, non-whites’ access to welfare services was unequal (has much changed in the way of politicizing protest coverage?)
  • The ‘Great Society’–series of initiatives designed to address economic development and justice, which greatly expanded welfare system

    • advocacy (e.g., getting slums inspected; accompanying people to welfare office; bottom-up community development effots)
    • Medicare and Medicaid, food stamps, Head Start, etc.
    • greatly expanded welfare services, but–this is key–the expansion was to make welfare available to a population that had been denied access for decades–this was not an explosion of people seeking ‘handouts’

    Business backlash–after a decade of expansion of the welfare system, guess who was ‘scapegoated’ (blamed)? Strategies used to gain more control over labor markets included:

  • Reducing welfare benefits
  • Damaging/discrediting the organized labor movement
  • Tightening welfare eligibility criteria
  • Makinge welfare assistance conditional
  • Deepening the stigma experienced by welfare recipients

Other historical and political factors also shifted the balance of power, such as

  • increasing globalization and declining wages (and loss of well-paying jobs through ‘outsourcing’),
  • shift from full- to part-time employment,
  • shift from public- to private-sector jobs (lower wages, less benefits)
  • rising inequality that has seen the wealthiest Americans reap most all of the gains in income and wealth in the last two decades.
  • higher divorce rates and more single mothers seeking welfare assistance (that ‘feminization of poverty’ process we’ve discussed), and
  • an increasing number of groups seen as ‘unworthy,’ including some among the disabled who were nudged back into the workforce (over 200,000 denied benefits).

And now …

Examples of changes in the welfare state over the last two decades.

  • Welfare ‘reform‘: an effort to dismantle ‘entitlements’ like AFDC (renamed TANF and converted from entitlement to lump sum block grant), via the bipartisan ‘Personal Responsibility and Work Opportunity Reconciliation Act’ of 1996.
  • Medicare Part D: which added prescription drug coverage to Medicare’s complement of care for the elderly (over 65 years). A partisan (supported exclusively by republicans) bill
    • driven as much by the pharmaceutical industry as the Medicare lobby.
    • Suffice it to say it wasn’t a bill prompted by economic disruption.
  • Affordable Care Act (often known as ‘Obamacare’)
    • mostly a bill supported and passed by democrats
    • expanded care to cover an additional 20 million or so Americans (but did not offer universal coverage for all citizens, making the US the only industrialized welfare state not to provide universal health care).
    • Not really the result of public pressure (more of a campaign promise).
    • Resistance: Perpetual efforts to repeal the law, and short of that to remove its funding, strip away the requirement to purchase insurance (meant to expand the risk pool to include younger, healthier people), offer no assurances that a person could be denied coverage because of pre-existing conditions, and charge a deductible that makes insurance little more than some minimal protection from catastrophic illness.
    • Trump White House has sought to repeal the law, but has only managed to diminish it–‘short-term’ insurance policies that don’t cover pre-existing conditions, no penalties for the ‘individual mandate’ to purchase insurance (on the exchange or having it through Medicaid), reducing advertising and the period to sign up, requiring Medicaid recipients to work;
  • Using welfare as a tool to achieve other policy objectives (reducing immigration, in this case)
    • Attempts to punish immigrants for being ‘public charges’ (by denying green cards [work permits]), requirements that immigrants have health insurance (the new ‘pre-existing condition,’ apparently);
  • Voter suppression
    • Mostly at state level (though the Supreme Court stripped portions of the Voting Rights Act)
    • Various tactics: ‘purges’ of felons, restrictions on voting times, places, restrictions on early voting, voter photo ID requirements, disinformation campaigns (e.g., targeting college students), closing precincts or using old machines that produce ‘spoilage’ (uninterpretable ballots)
    • Gerrymandering–not necessarily suppression, but a manipulation of voting districts, done to increase one party’s chances (the party in power) of electoral victory. This is state-level.
    • the upshot? Less people of lesser means registering or voting, people of color having their franchise disproportionately questioned.
  • Shootings of unarmed civilians by police (disproportionately black): which has led to rising popularity of the Black Lives Matter movement (Ferguson, Missouri protest and response; President Trump’s response in 2016 and 2020). There is also a geographic dimension.