Alexandra K-S: Welfare Reform and Its Consequences


Introduction

In August 1996, President Bill Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) into law. The PRWORA eliminated Aid to Families with Dependent Children (AFDC), the previous welfare program which provided qualified families with cash assistance. It was replaced with Temporary Assistance to Needy Families (TANF). TANF is a work-based program that forces welfare recipients to partake in work or work-related activities in order to receive public aid, such as cash assistance. The AFDC was established in the 1930s and was originally created for assisting widows and their children. However, as years went by, the AFDC turned into a program mainly assisting single mothers. Many politicians and taxpayers criticized the AFDC because it was thought that it supported joblessness and out-of-wedlock childbearing. The PRWORA was created to eliminate this encouragement, and instead encourage women to go to work. In his 1992 campaign, Bill Clinton promised to “end welfare as we know it.” His PRWORA legislation was the answer for him and for many. The primary assumptions of PRWORA are that most recipients can get jobs and maintain them and that consistent work will provide self-sufficiency. However, many feminists, sociologists and liberals have questioned these assumptions of welfare reform. Is it so easy for welfare recipients, the majority of whom are single mothers, to find work and keep jobs? What are other social barriers that these recipients face that may make it harder for them? Does welfare reform’s new mandates and stricter sanctions encourage women to work, or just make it harder for them to work? Some of the articles address many of these questions and more. Other articles maintain that the PRWORA, after 10 years in law, as been a complete success.

How Welfare Reform is Affecting Women’s Work
By Mary Corcoran; Sandra K. Danziger; Ariel Kalil; Kristen S. Seefeldt

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The authors of this article examine how the new welfare system is affecting work options for welfare recipients, specifically single mothers. First, the article reviews the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 and TANF, and how individual states implement TANF policies differently. For example,
following the federal mandates of TANF, recipients are required to obtain employment within two years of receiving public aid. However, states may set a shorter time period. Over half of the states have done this, many demanding immediate engagement into the work force. According to PRWORA, states must sanction recipients who do not observe program requirements. The majority of states have increased the severity of sanctions—thirty-six states stop benefits completely, either immediately after non-cooperation , or after a period of non-cooperation. The article argues that these stricter sanctions could be an alternative explanation for the reduction of 38 percent of caseloads since the law was passed.
Moreover, the researchers studied welfare mothers’ work behaviors and their economic well-being after the 1996 legislation. Various methods of data were analyzed to examine the consequences of welfare reform. Caseload data and Current Population Surveys (CPS) found that based on two factors, PRWORA is a success: caseloads have reduced, and employment of welfare mothers has increased. However, most research points to the booming economy during the late 1990s and other policy reforms as the main sources of these changes—not the new welfare system. Also, the authors discovered that changes in income and well-being vary. Although more women obtained jobs, research indicates that they have a lot less disposable income: the average disposable income of the poorest 20 percent of single mothers fell by 7.6 percent (252). The authors also looked at state-based leavers studies. Leavers are families who have left welfare or have been sanctioned post-PRWORA (252). The studies found that more than half of employed leavers work 30 hours or more a week, it is not enough to raise families out of poverty. After surveying individual welfare mothers, the authors found that the majority of recipients face multiple potential barriers to work, such as physical and mental problems, domestic abuse, and lack of transportation.
The authors also talked with employers and asked them what qualities they require of new hires, and whether welfare mothers’ possessed the skills and credentials to meet employers’ requirements. Research indicates that there is a large gap between skills employers demand and the skills that welfare recipients can offer. Many welfare mothers have low-literacy skills, and on average, those between the ages of 17-21 read on the sixth-grade level. Furthermore, more than half the potential jobs available to recipients are in the suburbs, but most of the recipients live in cities. The authors emphasize that many of the jobs welfare mothers do acquire are low-paying and are often part-time and unstable.


Making Men into Dads: Fatherhood, the State, and Welfare Reform
By Laura Curran; Laura S. Abrams

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The authors of this article examine revisions in child support and paternity establishment legislation as parts of the PRWORA. They argue that the PRWORA socially constructs fatherhood “through state policies that maintain male ‘breadwinning’ and also through state-supported social service programs that try to shape men’s identities as fathers” (663). Moreover, after studying the policies of the PRWORA, the authors contend child support and paternity establishment conditions control the behavior of both men and women. Whereas AFDC required mothers to cooperate with paternity establishment after deciding the mothers were qualified for public assistance, PRWORA enforces women to observe paternity establishment conditions if they want to even be considered for aid. This reinforces a “gendered distribution of power” because it in forces women to become more dependent on men. Men are defined as the “breadwinners” who women should always rely on. There is also more power over paternal support collections—some fathers can be sent to jail if they do not pay child support. This punitive reason overestimates how much fathers earn; the majority have low-incomes and high-employment rates.
State-supported social programs for welfare fathers try to reshape men’s individual identities. They see men as significant financial supporters and as important “companions and caregivers,” who only supports traditional gender hierarchy. Program assessors say, “the main goal of the curriculum is to help participants redefine manhood” (670). Furthermore, many fathering program providers believe that women are not capable of raising children with inadequate masculinities: “women don’t raise men, they raise boys.” The authors argue that these stereotypes only further socially construct “fatherhood.” Moreover, the authors explain that although the fathering programs may individually help low-income men and men of color, they do not challenge institutional privileges of race and class. Program providers focus changing the individual problems of the fathers, and do not recognize the structural difficulties they face in society that may be the real reasons the men and their families are struggling financially.

Dangerous Dependencies: The Intersection of Welfare Reform and Domestic Violence
By Ellen K. Scott; Andrew S. London; Nancy A. Myers

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The authors of this article study how the goal of self-sufficiency as a part of welfare reform may inadvertently push some women to form “dangerous dependencies” on abusive men. Scott et. al argue that the aim of welfare reform—helping women transition from welfare to work—is full of assumptions about welfare recipients and why they depend on public aid. Welfare reformers assume that women can find and maintain jobs; that the jobs will pay well enough to pick them up out of poverty; and that welfare mothers can easily manage being an active member of the labor market and being an active, nurturing mother. The article explains that these assumptions are “highly problematic” because many welfare recipients are uneducated mothers who lack fundamental job skills and face other obstacles to employment, including domestic violence. Research indicates that over sixty percent of welfare recipients report abuse in the past, and it is more difficult for victims of domestic violence to find and maintain jobs.
With the new policies of welfare reform and stricter sanctions, many women turn to social networks for support during their transition from welfare to work. Relying on social networks is part of welfare reform ideology: the policies are meant to encourage women to find work or depend on social networks (husbands and families) for social and economic help. Many of women’s networks are small, and only include past abusers (husbands, ex-husbands, boyfriends). If welfare mothers do find work, they often rely on these abusive men to help with childcare, transportation, or additional financial assistance. When women are unsuccessful at finding jobs, or lose welfare benefits because of sanctions, or hit the time limit, they too often turn to abusive men.
The authors interviewed 12-15 women on welfare in the Cleveland, Ohio area for 3 years. They found that the majority of women increased reliance on abusive partners to receive help with their children and various practical aids. Wendy is an example of welfare recipients’ growing dependence on abusers. She is a mother of two, including a son who has critical psychological disorders. Wendy also suffers from various health problems, including asthma, anxiety disorders, and foot and back injuries. Her ex-husband is physically and sexually abusive to both Wendy and their younger daughter. Nonetheless, Wendy relies on her ex-husband to watch their children while she is at work, trying to financially support them. The authors also discovered that some very disadvantaged women turned to sex work and drug addiction after facing multiple obstacles to employment.

Leaders: Tough Love Works; Welfare to Work

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The author of this article explains why and how the PRWORA is a reform lesson for other countries. He explains although welfare reform was highly debated in America, it was also highly criticized in other countries in Europe. Many Europeans claimed welfare recipients would have difficulty finding work, and welfare families would be “condemned to destitution.” However, according to the author, these criticisms were proved “spectacularly wrong”—welfare reform was a complete success. The central reason for the sharp drop in caseloads, he argues, is not the booming economy, but the reform itself. Moreover, he says that although the majority of recipients’ jobs are low-paying, recipients for the most part are faring better than they were when they were on welfare.
The success of the welfare reform in America has been “infectious” in some European countries. Britain and implemented a “tough love” program to keep young people from unemployment; the Netherlands and Denmark have also executed strict mandates to get people off of welfare. The author claims even reluctant countries of Germany and France have slowly begun to implement more conditions and less “entitlements.” He argues even more can be done in European countries to emulate the success of America’s welfare state.

How We Ended Welfare, Together; [Op-Ed]
By Bill Clinton

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August of this year, 2006, marked the 10-year anniversary of the Personal Responsibility and Work Opportunity Reconciliation Act. President Bill Clinton wrote an Op-Ed piece in the New York Times addressing the success of the welfare reform he spearheaded in 1996. In the article, Clinton acknowledges his pledge during his 1992 Presidential election to “end welfare as we know it.” He discusses the rift between conservatives and liberals during the construction of welfare reform: conservatives wanted less spending on federal subsidies supporting recipients, whereas liberals wanted more, and believed the work requirements were too severe. Despite disagreements and heavy criticism about the new welfare legislation from many liberals, Clinton claims “the last 10 years have shown that we did in fact end welfare as we knew, creating a new beginning for millions of Americans.” The former President lists statistics of declining caseloads, reductions in the welfare rolls, and the large numbers of women who have found work. He also put into law the “toughest child-support enforcement in history;” increasing child-care funds; and increasing the minimum wage. As a result, child poverty significantly fell, and “100 times as many people moved out of poverty and into the middle class” versus the previous 12 years of his Presidency. He attributes these positive changes not only to the booming economy, but to the welfare reform itself.


Conclusion
After reading these articles, I was angry. As a member of this society, how did I not know about the extreme difficulties many welfare recipients are facing post-PRWORA? I realized quickly that it is because most of mainstream media, which reflects the interests of the elite, is not going to question the existing system, specifically welfare reform. Also, as a supporter of Bill Clinton since before I can remember, I never thought to question any of his policies, including the PRWORA. How many other Clinton supporters or just general society members question laws like welfare reform?
It is clear to me that the PRWORA has some problems. If it were an ideal world, than yes, the PRWORA might really be helping these women. But, it is not. Welfare recipients face so many obstacles in their lives to overcome poverty. How many lawmakers have had a first-hand look at poverty in the twenty-first century? In his Op-Ed piece, Clinton takes pride in created the toughest child-support enforcement in history, but as the “Making Men into Dads” article argues, what does that imply about society’s social construction of fatherhood? In designing PRWORA, there were far too many assumptions about women’s ability to achieve self-sufficiency.

Tricia Bealer- The Characterization of Poverty in the Media

Introduction

For many years, the issue of welfare has been characterized by the mass media. Newsapers, Textbooks, and other media sources many times misrepresent the poor in a number of ways. African Americans often are the object for many inaccurate portrayals of the poor. These following articles display the various ways in which certain portions of the public are attached to this issue of poverty and the stereotypes the media attaches to these groups.


Race and Poverty in America

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This article discusses how the worldview of Americans most often comes from information presented to us through the mass media. This occurs among Americans despite the false representations of different issues by the media in society. This article argues that this concept comes to life whereas African Americans are overrepresented in the media as the majority of the poor in the U.S. Regardless of conflicting statistics and the reality of the fact that more whites are struck by poverty in our nation, the public continues to acknowledge African Americans as the majority of poor people in the U.S. In addition to this problem, this article discusses how African Americans are rarely portrayed in media coverage stories as part of the sympathetic portion of the poor. The source of a misrepresentation of poverty in America and these racial stereotypes are further explained in this article.

Poverty As We Know It

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Research in this article picks up where the author of the last article (Race and Poverty in America) left off. This article analyzes character traits or behaviors associated with poor people in America. The author of this article then studies whether or not photographs displayed in the media reflects current stereotypes of the poor. This article proved the idea that the poor is represented in the media inaccurately and stereotypically. According to this article, the media portrays negative views of the poor, displays hostility towards African Americans, and does not support welfare programs.


Poor People, Black Faces

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This article examines the misrepresentation of the poor in American society carried out by college economic textbooks. It is noted early on in the article that often times the issue of poverty in America is closely associated with issues of race. More specifically, the author investigates her theory that African Americans are falsely represented as a bigger proportion of the poor than in reality. The research done in this article displays the unfortunate circumstances that so often today play a huge role in reinforcing stereotypes and contribute to institutionalized discrimination. Through the disproportionate portrayals of African Americans in poverty, college textbooks are responsible for maintaining a race coding of poverty.

Media Portrays Most Poor People as Black

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This article acknowledges blacks once again as being the poster race for poverty in America. This Yale University study found that blacks more often than whites portray stories about poverty. Among major national news magazines, blacks were disproportionately represented in stories that involved issues of poverty. The article also discusses how television programs are also responsible for maintaining a racial misrepresentation among African Americans.

Media Magic: Making Class Invisible

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This article discusses the various influences the media has on the public. The author, Gregory Mantsios, informs the reader of specific ways in which the mass media characterizes society in various ways. Mantsios then goes on to talk about the unfortunate stereotypes society accepts to be true under the guidance and manipulation of the media. Specific principles are addressed and further explained to sort out the different misconceptions the media portrays concerning the poor.

Conclusion

Poverty has been misrepresented and inaccurately portrayed by the media many times in society. Unfortunately, much of society’s worldview depends of the information presented through the mass media. These articles depict how unfair press can be in disproportionately representing African Americans as a majority of the poor when in reality this is not the case. Other stereotypes in these articles were discussed to show how the media perpetuates these false portrayals of the poor. Unfortunately, the victims of these stereotypes have to work very hard at disproving the media as inaccurate. By creating articles such as these, the media is working its way towards becoming better aware of the implicit stereotypes that society bases their perceptions on.

Kevin Prieto

Introduction

The focus of my research was to find articles that portrayed inequality in the US. Inequality is all around us so as a whole I tried to link this issue with my groups overall topic of welfare. Far too many people in this country do not have any form of health care and Inequality is a huge factor in that. When you’re in poverty, living day to day you don’t have extra money to spend if you happen to get sick. You either pull through and make it or die. Not only is this reality completely unfair it’s just not the way this country was intended to be like. Are goal is to bring awareness of this important issue. My first article talks about African American inequality in the US. It also points out the ways in which inequality has worked throughout the US. Article 2 is a comprehensive Analysis of sex and race inequalities in unemployment Insurance benefits. Article 3 looks at methods of monitoring socioeconomic health disparities in the US. Article 4 is looking at the gender/poverty gap and what we can learn from other countries. Lastly 5 is about the black/white mortality gap in the 1960 and 2000.




“The New African American Inequality”

By: Michael Katz, Mark Stern, and Jamie Fader

Source: Journal of American History: June 2005 Vol. 92 Issue 1 pg. 75-108

Link: http://library.cocc.edu:2051/login.aspx?direct=true%26db=aph%26AN=19324140%26site=ehost-live


The authors of this article discuss a different type of inequality that faces the African American of today. At the beginning 20th century African Americans across the board, faced discrimination in jobs, education and every day living. With Affirmative action and the social movements against discrimination African Americans gained betters jobs, guarantees of food, shelter, medical care and education. Black poverty was on the decline. The authors point out however that in spite of these changes that there is a general sense that racism is alive and well in the United States. There continues to be evidence of this in police racial profiling, more blacks living in poverty than whites, more blacks filling our prisons as just a few examples. This article had 5 goals ranging from looking at inequality throughout history and how it has worked in the United States to looking at the interesting shift in gender inequality between black men and women. Black women have made huge gains above black men in the areas of employment and education in the last half of the 20th century. The article discusses how education has aided the upward mobility of many blacks but also how the way our educational system is structured has also left many blacks behind in their ability to have access to it. The authors have broken down their research into looking at five different areas. They included:
“1. Participation: the share of African Americans who worked for pay
2. Distribution: the kinds of jobs they held
3. Rewards: the relative income they received
4. Differentiation: the variation among them on scales of occupation and earnings
5. Geography: where they lived”
The article was very interesting as it examines black men and how they have not been as fortunate as black women in terms of jobs and earning potential. Black men were hit much harder by the declining wages and weak labor market that has hit many American workers. The authors point out that the new African American inequality has left them divided among themselves. Too many are living in poverty and those who do have good jobs are often working for government agencies that are subject to political decisions and economic trends that may leave them unemployed. There is still 3 times the number of blacks living in poverty as whites and more whites finish college and hold property than blacks. Inequality may look a bit different than it did in the early 1900’s but is still lives on.


“A Comprehensive Analysis of Sex and Race Inequities in Unemployment Insurance Benefits”

By: Melissa Latimer, West Virginia University

Journal of Sociology and Social Welfare, December 2003, Vol XXX, Number 4

Link: http://library.cocc.edu:2051/login.aspx?direct=true%26db=aph%26AN=12596424%26site=ehost-live


This study was conducted in West Virginia with the purpose of looking at the welfare system, and more specifically at Unemployment Compensation in a rural area of the country. Most of the research in this area has been conducted in urban areas and rural America has a different picture for us. The poverty rates in rural areas are substantially higher than urban areas. The study examines the factors of sex and race that result in inequities in unemployment insurance benefits. The type of job one holds determines ones chances of advancement, benefits, and income earning potential. The jobs available to workers today are shifting and the U.S. is losing the high-wage manufacturing jobs that have supported its workers in the past. There is a shift to increasing numbers of minimum wage, no benefits, service jobs. As a result more and more workers are losing their earning potential and the option to collect unemployment benefits should they lose their job. Women and people of color are the hardest hit by this shift. Latimer suggests that if one wants to look at how well the welfare system and specifically the unemployment insurance program is working it would make sense to look at it in a rural area where the most vulnerable workers can be found needing assistance. This article looks at the history of the unemployment benefits insurance and factors like minimum earnings and work time requirements that often determine one not eligible for benefits. Latimer states that 12% of the work force is employed in jobs not covered by unemployment compensation. The majority of those jobs are held my women, people of color and rural workers.
She also stated that she found that in the state of West Virginia only about 35% of the unemployed workers received unemployment insurance benefits. These individuals when faced with a loss of a job are left to depend on limited social assistance programs like food stamps, Medicaid and public housing. Women and people of color are at a distinct disadvantage when it comes to their chances of getting unemployment insurance benefits.

“Painting a Truer Picture of US Socioeconomic and Racial/Ethnic Health Inequalities: The Public Health Disparities Geocoding Project:”

By: Nancy Kreiger, Ph.D, JarvisChen, ScD, Pamela Waterman, MPH, David Rehkopf, MPH, and S.V.Subramanian, Ph.D

American Journal of Public Health, February, 2005 Vol 95, No. 2

Link: http://library.cocc.edu:2150/ehost/detail?hid=113&sid=90cdb53b-2e7e-41ee-ba8c-411ad024f706%40sessionmgr105


This research study was done by a group that felt that the public health disparities and inequalities associated with race and socioeconomic were not well documented. This group of authors has designed a method that could be used yearly to monitor the socioeconomic health disparities in the U.S. using geocoded public health data and the current census tract of poverty data for each state. In 2008 there is going to be a new method by the American Community Survey that will release annual census track data based on 5 year averages. This will allow national, state and local communities to track the inequality and health implications more easily and could improve accountability in the area of improving the social disparities in health we now see. This group felt that there is not adequate data on the socioeconomic inequalities in health and how that contributes to racial and ethnic disparities in health as well. This study looked at 2 states, Massachusetts and Rhode Island and the census track data for them from 1990. It looked at the health issues of childhood lead poisoning, sexually transmitted diseases, TB, nonfatal weapons-related injuries and cancer incidence. Some of the results included that 90% of the white population lived in areas with fewer than 5% of persons living below poverty level, while more than half the black and Hispanic population lived in census track areas with over 20% or more of the persons living below poverty level. It was also found that in all health categories except breast and colon cancer, there was an increased risk of illness with living in the poor census track areas. The study found that more than 50% of the health cases would not have occurred if the cases had lived in above poverty census track areas instead. The article points out that the research findings point to the large extent that socioeconomic deprivation can adversely impact a population’s health from birth to death.

“The Gender-Poverty Gap: What We Can Learn From Other Countries”

By: Lynne M. Casper, Sara S. McLanahan, and Irwin Garfinkel
American Sociological Review, Vol. 59, No. 4 (Aug. 1994), pp 594-605

JStor
Link: http://links.jstor.org/sici?sici=0003-1224%2528199408%252959%253A4%253C594%253ATGGWWC%253E2.0.CO%253B2-I



The authors in this article have looked at 8 industrialized countries to examine gender differences in poverty. The purpose of this article was to provide information about gender inequality and how this information might be used to improve welfare state policy. It has been long agreed that American women are more likely to be poor than American men. In the article it states that in the United States women are 30% more likely to be poor than men or have a 1.30 gender-poverty gap ratio. One might assume that this is the case in other industrialized countries as well. This article points out that this is not the case. We learn that poverty is a family characteristic that will depend on the total income of the family and the ratio of dependents to earners. In looking at these factors the authors examined 6 demographic characteristics in all 8 countries. They included age, education, employment status, marital status, parental status and single parenthood. Gender differences in employment and parental status explain most of the gender-poverty ratio in the U.S. and you would think in other countries as well. It turns out that one has to also look at the political and religious differences of a country too. For example in Italy, family is everything and most people are married and have 2 parents providing care and support for children. Religion has an impact in keeping this countries ratio at close to 1. It was interesting to learn that the United States has the highest poverty rates of any of the countries in the study. In Italy and the Netherlands the poverty rate is equal for men and women and in Sweden the rate of poverty is higher for men than women. The authors suggest if women in the U.S. could gain the same employment status as men that the gender-poverty gap would be reduced by 70%. Other suggestions for improving the poverty ratio were to encourage men and women to marry and stay married and lastly to provide a generous welfare system like that found in the Netherlands to provide an income floor where no citizen would have to live below.

Article: What If We Were Equal? A Comparison Of The Black-White Mortality Gap In
1960 And 2000.
Authors: Satcher, David1Fryer Jr., George E.2McCann, Jessica3Troutman, Adewale4Woolf, Steven H.5Rust, George6 GRust@msm.edu
Source: Health Affairs; Mar/Apr2005, Vol. 24 Issue 2, p459-464, 6p

Link:
http://library.cocc.edu:2150/ehost/detail?hid=107&sid=e1a4ed9d-b0a0-4a49-a060-786433420f5d%40sessionmgr104

This article talks about the black/white mortality rates from 1960 to 2000. The article says that around 83,000 African American deaths each year could be prevented by closing the mortality gap. There have been a lot of improvements in decreasing the black/white gap in civil rights, housing and education but it still needs to come a lot further. The majority of these excess deaths come from health disparities. There are still a huge amount of people in this country without health coverage and many of these people happen to be black. What can be done to make people more aware of these excessive deaths among African Americans? If everyone was offered the same opportunities for health coverage some 80,000 people could be saved. Poverty and inequality is killing innocent people by the thousands. The article makes the point that people in poverty just don’t have the means necessary to survive.

Conclusion

Health coverage is just one of those things that everyone should have access too. We all deserve the right for treatment when we get sick. Everything in this society is based on money and power. People need to be judged by the quality of their heart and the good they attempt to leave in this world not by how much money is in their pockets. People are worth saving. Are you worth saving?

Wealthfare: Free Hand-Outs for the Rich

By: Valerie Orosco

When the word “welfare” comes up, most think of things like food stamps, free-rides, poverty and ghettos. But the money that is given to causes that involve the poor pale in comparison to the aid that is doled out in the form of “wealthfare”. “Weathfare” (coined in 1956 by Ralph Nadar) is a term used to describe corporate welfare which is defined as direct payments, low-cost loans, insurance, or subsidized services to private businesses and cost taxpayers an estimate of over $100 billion dollars per year. The following articles address the inception of social welfare, current structure of corporate welfare, as well as recommendations by modern critics about its place in our debt-ridden economy.

Business Man and the Bureaucrat: The Evolution of the American Social Welfare System, 1900-1940

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This article covers the early days of social welfare programs and shows how their roots were established by businessmen and corporations themselves, as well as showing how the tables began to turn.

In the early 20th century social welfare programs supported by the federal government did not exist. People of the time did not even believe that the government should be responsible for these types of programs. The rising intensity of debate over the development of corporations and industrialization forced the hand of businessmen who could not ignore the negative impacts strikes were having on their businesses. In an effort to reduce dissatisfaction among workers, thus quelling socialist activity, mass industrial welfare programs were developed.

Overtime, corporations came to view these benefits as something that they had to “purchase” instead of as something that they had actually “produced” to maintain higher levels of production. In an effort to standardize benefits (and hold/protect their own corporate interests) the Welfare Department of the National Civic Federation was created starting with 100 firms in 1904 and swelling to 2500+ firms in 1914 reducing the welfare offered to workers.

In 1916, the first unemployment insurance program was establish by corporations, who still showed preferences of welfare issues to be in their own hands and not interfered in by the government; largely in part to the popularly held belief at the time that the business industry should take care of its own problems. To do this, many corporations reflected the cost of the welfare programs they provided to employees in the price of their products. The logic was that those who enjoyed the products being sold would supplement the welfare of the individual working for that company as opposed to allowing taxation of the general public through the government do this task.

Company welfare programs were depended upon emergency money that the corporation had set aside and accumulated over time. During the years of the depression, much changed as the contributions made to this “rainy-day” fund decreased and expenditures increases until they were non-existent. As a result, FDR asks for federal money to be authorized by the Congress for grants to individual states for the unemployed (known as The Federal Emergency Relief Agency.) In addition the National Recovery Administration (NRA) is set up in an effort to change and improve business. NRA establishes maximum work hour requirements, the minimum wage, suspends anti-trust laws, and turns out to be unsuccessful in its improvement efforts. In 1934, the government realized that the issue of social welfare was not one that could fix itself and decided to establish their own programs; thus the inception of social security which, to this day, continues to link the public and private sector over social welfare.
Though this article does not directly deal with modern corporate welfare, I felt it was important to include illustrating how time can drastically change the norms that are often taken as inherent truths. The term “welfare capitalist” appears to be an oxymoron, as clearly they are contradictory terms. I think it is so interesting that at its beginnings, corporations felt responsible and carried the burden of the struggling society. But like any good capitalist, it seems as thought the bottom-line snuck in rather quickly suppressing any altruistic efforts, while modern corporations take an opposite stance with an outstretched hand to receive instead of give.

BIG-PICTURE ORGANIZING--PART 4: CORPORATE WELFARE

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This article highlights the author’s (Montague) views about the two foremost reasons for the abolishment of corporate welfare. The first factor is that the middle class has become what Montague characterizes as an “anxious class” fearful of many issues such as maintaining their jobs or the future of their children; while the over-class continually reap large portions of available benefits. The rise of technology and global trade are sited as main factors that are destroying the middle class. As a consequence, it is suggested that Americans must embrace technology, learn, and be willing to change. Also since it is not feasible to close all borders America must find a way to compete effectively in a global market.

The effect of these two factors leads the author to the conclusion that corporate welfare must end so that: 1. the gross amounts of money can be instead reinvested into the workforce and 2. to stop shielding corporations with free hand-outs that ultimately weaken them by shielding them from the global market. It is said that the competitiveness of both those who do not receive government handouts are also undermined by the issued subsidies. The unsubsidized companies find themselves at a huge disadvantage both competitively and economically which often puts them in a position to have to move their businesses to a location in the global economy that offers cheaper labor and materials just to remain in business. This illustrates how corporate welfare really ends up weakening the US economy.

The author goes on to make a definitive distinction between public assistance and corporate welfare. Unlike so many that receive public assistance, it is stated that many of the subsidies stem from political influence and NOT need. Subsequently, a culture of dependency is created amongst many of the companies who learn to enjoy living off of and taking advantage of the free money being handed right out of the pockets of taxpayers. Unfortunately the government trend continues to favor corporations, who as a result of all the extras they receive are able to make large campaign contributions, over the people.

I thought this article did a good job bringing together two ideas into a concise synthesis about why the corporate welfare needs to stop. But I did find it rather interesting that all that was really address was the plight of the middle-class. What about the lower class? Do they not exist? Although, I’m sure that their anxieties differ from those of the middle-class; perhaps it is a topic for another paper. However, I did like at the end of the article when the author points out that not all subsidies are bad, singling out those, “…government programs [that are] intended to promote social goals that benefit everyone, not a wealthy few.” That is a message I can agree with. This article demonstrates many aspects of conflict theory seeing as how there are great issues of inequality represented in this structure. Also because conflict theorists are critical of capitalism stating that those with power and money influence the legislature and policy in their favor; corporate capitalism demonstrates that to a tee.

The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation

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This is an interview with Greg Leroy who is the author of the book, “The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation.” Basically the book highlights many cases where large corporations are receiving huge tax breaks and subsidies from the government both locally and statewide while never delivering on the promises they make to create “good” jobs or pay higher tax revenues.

Written in 2005, Leroy’s book puts a concrete number ($50 billion dollars) spent every year just within states and cities that are pitted against one another by corporations trying to acquire “hefty taxpayer subsidies” while promising to create jobs, help promote higher wages and standards of living that never come to fruition. Many times the company does nothing different in its practices due to the subsidies and the government does a poor job enforcing or even looking into whether the promises made by the corporations are kept. This creates an unfortunate situation where the taxpayer ends up paying twice: once for the higher tax revenues that are never received from the companies and next for the paying out of monies that could have been used to generate jobs in other ways.

Leroy goes on to illustrate how taxpayers often end up subsidizing the same corporation twice, but in very different ways. The example of Wal-Mart is prominent and shows how it first receives “brick-and-mortar” subsidies in the form of loans, grants, cheap land, etc. But the taxpayers also end up floating the bill to pay for “safety net programs” such as Section-Eight housing, free lunch programs, etc., known as “back door” subsidies due to the fact that Wal-Mart does not provide its employees with a livable wage.

If this problem is to be combated, Leroy proposes that the demand of accountability may be the first and most effective step to accomplish this. In fact, a standard that has just started to appear attached to many subsidies enacted by many states is the provision of “claw-backs” which utilize a money-back guarantee clause of accountability that now demand the return of some monies if the promises are not met on the part of the company.

Though not an easy process to change, Leroy points to disclosure as being the “bedrock” to building new framework and agreements for change. By allowing people to see who actually receives the money and what the actual benefits are, then change will follow. The idea of smart growth is also addressed; for example, building new business that will ultimately be providing the jobs in close proximity to public transportation, allowing for people with low-incomes to have accessibility and thus opportunities to access these new prospects. This works additionally by cutting back on traffic congestion and, consequently, cutting down on pollution caused by vehicles.

This interview peaks my curiosity and make me angry. It seems as though the government (with its deep roots in capitalism), if putting this much money forward would want to ensure, like any good business-man, that the investments that it is making are indeed producing and yielding profits. But instead it does not function in a manner anything close to the sort. I would like to read this entire book (which is available on Amazon in hard-cover (used) for as low as $8.44.) It seems to me like the idea of disclosure would be an excellent one. A democracy is only successful if the citizens are informed. Without the information, it is difficult for the masses to get angry, but perhaps this was and remains the goal. I think that from a critical constructionism perspective, the issue Leroy addresses really emphasizes the importance and influence of the elite interests and shows how its role changes the process of problem construction as well as the outcomes. Everyday people become more and more entwined in debt, many sinking deeper with high interest rates and payments. Yet corporations are allowed not only to receive the handouts and loans but not be punished or penalized when conditions are not met. This is clearly a case of inequality.

Common Cause Urges Senate To Act To End Corporate Welfare Programs (Remarks by Common Cause before a recent hearing by the Senate Governmental Affairs Committee, on S. 1376, the Corporate Subsidy Review, Reform, and Termination Commission Act of 1995)

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In this hearing what is documented is an outline and proposed actions of S. 1376 lead by Senator John McCain (R-AZ) and supported by others in a bipartisan effort to alter, terminate and bring public awareness to the issue of corporate welfare.

The article goes on to address the fact that many times when the issue of balancing the budget comes up in politics, as it often does, many of the programs to get cut first are things like education programs, Medicaid and other federal programs while corporate welfare remains untouched. In fact, the Congressional Budget Office (CBO) concluded that of the $722 billion in corporate subsidies slated to be doled out over the next seven years, legislation passed in October of 2005 would achieve just $8 billion in that same time period.

Examples of corporate welfare are abundant. The Agriculture Department’s Market Promotion Program is an example that comes up many times in several readings. It’s goal as a subsidy is to pad foreign advertising budgets of huge corporations so that they can advertise abroad; companies such as Gallo Winery, Pillsbury, Sunkist or McDonald’s. But Agribusiness and food corporations over the past decade have made nearly $50 million in contributions to congressional candidates, resulting at least in part, to a $6.2 billion a year bill to taxpayers. It is said that since average American’s do not have powerful special interests supporting them, federal programs are at a huge disadvantage to the corporations that are rife with special interest money and influence, which is essential to the survival of these subsidies. In fact, Robert Reich, Clinton’s Secretary of Labor said, “Ninety percent [of corporate welfare], if not 100 percent of it, is a result of lobbying and campaign donations by particular companies and industries.”

To effectively end corporate welfare, S. 1376 demands an independent commission that would put this issue under the same scrutiny as other budget items, despite their powerfully backed programs, and giving specific recommendations for cuts. To conclude, it is suggested that Congress needs to more fairly address the issue at hand.

While this article does indeed make a reference to the fact that federal programs are cut way before corporate welfare is even considered an issue, it does fall short in the arena of suggestions as to what will be done with the money should corporate welfare indeed become terminated. This over-site leads me to believe that the optimism of the authors of this proposal do not truly believe that anything will change, but that is just an assumption. I tried in vein to find out what the outcome of this proposal was. I did however find a proposal made by Representative Adam Smith [WA-9] introduced in February of 2005 called H.R.974 that in effect calls to establish a Corporate Subsidy Reform Commission to review Federal subsidies with the recommendation of termination, modification or retention of these subsidies. Essentially it outlines all of the same things that Cheney’s proposal did in 1995, only with larger numbers plugged into the equation, which leads me to believe that the first proposal went nowhere. I also tried to follow up on Smith’s proposal but all that is stated is that as of February 17, 2005 all the proposals are under the jurisdiction of the respective committees concerned, which sounds rather inconclusive to me. I do applaud Cheney for exhibiting some of the ways of a critical constructionist. From my point of view he does make an effort to give a voice to the less powerful groups of society that, in this case, is clearly overwhelmed in public debate by the resources of the more powerful interests.


Phantom Welfare: Public Relief for Corporate America

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This article chooses to call what the United States experiences as the “phantom welfare state" because the federal expenditures that total an excess of $150 billion dollars a year do not actually go to the traditional welfare programs that the public has been lead to believe that the money goes to. In fact, corporate subsidies take away from these traditional programs that are already floundering, competing for scarce federal dollars in the first place. It goes on in detail addressing the major types of federal subsidies to American businesses such as corporate welfare, direct expenditures, credit subsidies, tax expenditures, subsidized services, trade restrictions, secondary mechanisms, regulations, and purchase arrangements.

The article also makes mention for the first time, in my readings, the importance of social workers and keeping them informed about different kinds of welfare beyond just traditional programs that they may have to directly work with. It is stated that the, “…continued avoidance of non-poverty welfare programs puts social work in a poor position from which to advocate for fundamental reform of current budget priorities.” It is conveyed that in the eyes of the author that the traditional mission of social workers is as an advocate for the social welfare of the people has been lost and that social workers need to get back to and embrace that tradition. It is thought that is social workers can reestablish themselves as leaders in the realm of social welfare then they will also be able to more effectively help and return America to a state of more equitable redistribution in the realm of wealth .The article goes on to site that corporate welfare is a major contributor to the growing gap between the rich and the poor as it represents the gross injustices in the distribution of wealth that is currently occurring; a problem that is too big and influential to ignore.

I enjoyed the fact that this article had a call to action. It has been a resounding theme among my articles to have many governmental changes that need to take place to help abolish corporate welfare, but this is the first that call upon a specific group outside of the government structure in the handling of the dismantling of this enormous problem. I think this article is demonstrates a different perspective that seems positive about how to make a change in regards to government with continuing to rely on it. Perhaps this is article and this type of thinking that will prove to be the roots of a positive new social movement.

Conclusion

It appears to me that corporate welfare amounts to nothing more than stealing from the poor to give to the rich. In the not so distant past the nation’s tax bill was roughly split between corporations and individuals and that corporations found a value in workers and their well-being. But many changes have occurred as the nation rewards more and more favorable preferences directed at big business over the plight of the individual. Corporate tax shares continue to decline. Much needed tax relief to the lowest income earners, most likely already be treading water and struggling to survive is ignored. All the while the nation continues to pay taxes each year that end up going to special interests that neither need, nor deserve, the help.