Did Welfare Reform Worsen The Depression In Working Class Incomes?

I am inclined to think that Bill Clinton based his “end of welfare as we know it” on optimism. He knew that, contrary to the negative press workers got from the business press, workers preferred to work. It gave them dignity and an income and a value to their families. Because he lived among people whose lives had an upward trajectory Clinton believed that was the nature of things.

The welfare rolls had become a pool of joblessness. Described that way it’s hard not to think of the situation being caused by the welfare safety net. Was it as self-perpetuating as it was described, or was it, perhaps, simply that a certain number of working age people were always going to be unemployable or underemployed for lengthy periods regardless of willingness to work. Were they, as a class, to blame for their situation. There are people who will always be hard to employ or find it difficult to stay employed. There is a spectrum of capability; it is not simply a matter of will and character or the lack of it. These people deserve to eat and have a place to live because they are Americans, and the government is the last resort for that. Often their unemployability is due to the trauma of military service or simply caused by traumatic events or disease which we know tend to be underdiagnosed and under-treated among the poor.

Clinton signed welfare reform but the Gingrich Revolution is the author of this term-limiting of welfare. They spoke in the same hearty American language of optimism but also in a different American language of punitiveness and judgment. Conservatives tend to be more binary in how they assess problems, and more willing to blame the ones needing help. Clinton wanted to achieve innovations and reform perceived problems. He believed welfare reform might solve the problem of persistent unemployment. It actually may have hidden the problem, and created another.

There is another tendency among conservatives to believe ending the spending solves the problem it was being spent on, but even if people with problems and limitations that make them harder to employ die off sooner (and less expensively, and thus more efficiently in conservative terms) new people with these difficulties are born and enter the work force each year. There are some problems that can’t be solved but require palliative care. Think of some categories of unemployment like chronic leukemia, which has to be treated but cannot be cured and doesn’t go away.

Did the end of welfare as we know it exacerbate the degradation of working class prosperity Americans had enjoyed for two generations?

This long depression in working class incomes dates roughly to the Reagan administration and the careful neutralization (and Reagan’s cheerful co-opting) of organized labor, but may it also have been deepened and lengthened by the removal of this durable safety net? The welfare safety net didn’t assume that one’s joblessness was only temporary––an optimistic view that everybody can find a job if they look for one. That everyone is capable of work their whole life. That anyone not working is malingering or of poor character. It might have carried a stigma but it didn’t withhold help.

The removal of the reliable safety net (which had no mechanism for shutting out the least employable) left various deterrents to people who needed assistance. (The taxpayer could wash his hands of those deterred from seeking help; problem solved.) Workers could wear out the government’s tolerance for their inadequacies even if the inadequacies didn’t go away. Eventually the govt would label them as incorrigible and undeserving. Thus simple need became a stain on your character, making it even more difficult to find employment and keep it.

When the safety net was taken away it also increased the desperation of the pool of less employable people at the bottom. Did this increased desperation and larger pool of people who could no longer find help depress wages? How could it not? I’ve read about the wage-depressing effect of undocumented workers willing work longer for less money because of their insecure status here, but the removal of the safety net was probably a much greater depressant on wages. Both increased the labor pool and increased its desperation. In a sense workers who weren’t working but not starving were like union workers who could strike because there was a union fund for that. Greater desperation helps employers.

I believe the lagging minimum wage is a result of a labor market that is tilted to favor employers in more ways than most Americans realize: by declining union organizing, by the presence of less demanding undocumented workers, and by the desperation caused by the loss of a safety net, each leveraging the others.