|
NATIONAL
JOBS FOR ALL COALITION,
% CIPA, 777 UN Plaza, Suite 3C, NY, NY 10017
UNCOMMON SENSE16
© January 2001 [Rev.] #3 of FAIR WORK AND
WELFARE: A WELFARE REFORM PACKET
WORKFARE
VS. FAIR WORK:
PUBLIC JOB CREATION
by Nancy Rose, Professor of Economics, California
State University, San Bernardino, and Advisory Board, National
Jobs for All Coalition
California GAIN Program Helps 1000s of Welfare Mothers
find Jobs
Governor Declares W2 a Success as Wisconsin Puts Welfare
Recipients to Work Welfare Rolls Fall by Half Since 1996 as Former
Recipients find Jobs
Headlines such as these have become common during the past few
years as welfare recipients across the country have been pushed
off the rolls and into jobs. Many of those not able to find jobs
have been forced into workfare programs--providing work that would
normally be paid a wage--in order to remain eligible for welfare.
Even though workfare has been increasing, we have another type
of government work program as part of our history. These public
employment job creation programs offer an alternative to forced
workfare.
According to conventional wisdom, government job creation is
a discredited idea, dismissed as unnecessary make-work. However,
an unjaundiced look at past public employment initiatives, like
the New Deal work programs of the 1930’s or public service
employment of the 1970’s, demonstrates the merit of such
an approach. Developed to provide work for people normally expected
to be employed, these programs have treated participants with
some respect, paid wages based on market rates, and provided work
in a variety of innovative and socially useful projects.
While these programs were not without problems, a careful look
at the record shows that the pluses far outweighed the minuses,
and that many negative assessments were based on grossly exaggerated
claims which are not supported by the evidence. Other problems
were virtually assured by constraints and contradictory goals
imposed on the programs. In order to argue effectively for new
work programs, we should understand both the contributions and
the limitations of the previous ones.
Public employment programs: not the same as workfare
First, it is important to stress that public employment programs--fair
work programs--are different from workfare. Fair work is meant
for unemployed people normally seen as working for wages, so programs
generally pay market wages and provide socially useful work. Workfare
is for welfare recipients and assumes that only lack of motivation,
not lack of jobs or lack of child care, keeps welfare recipients
out of paid employment. Workfare, which has proliferated since
the early 1980s, forces relief recipients to do additional work
outside the home in order to remain eligible for welfare. Typically,
workfare programs pay little attention to participants’ skills.
But regardless of the kind of work performed, workfare is not
a job. Unlike other workers, people on workfare assignments do
not receive a wage in the traditional sense and, under the current
welfare law, they lack rights of other American workers, such
as the Earned Income Tax Credit, and credit/eligibility for Social
Security and unemployment compensation.
People sometimes "work off" their welfare payments
in a Community Work Experience Program. For example, workfare
participants in New York City have done park maintenance and street
cleaning. There is nothing demeaning about those jobs. In fact,
pruning trees, keeping parks in ship-shape, and streets clean
are important jobs that contribute to the quality of life. New
York’s Sanitation and Parks Department jobs are highly prized,
but that is because workers are "employees," with decent
wages, benefits and working conditions. People on workfare, however,
work off their benefits at what amounts to a fraction of a regular
worker’s pay. More often, welfare recipients are pushed into
the low-wage labor market where they usually find jobs paying
close to the minimum wage. That is, if they can find jobs at all.
The welfare law signed by President Clinton in August 1996,
justified as "ending welfare dependency" by forcing
recipients off the rolls and into paid work, worsened this situation.
The law disregards the economic hazards of the low-wage labor
market: low wages, which usually come without health benefits,
are simply not enough to live on, let alone cover the costs of
child care or health care.1 And the law ignores the value of work
in the home raising children. Since it is not paid work, it is
not considered real work. It is "real" work only when
women are paid to care for someone else’s children.
Not only that. Because workfare increases the number of job
seekers without increasing the number of jobs, it tends to further
depress wages, standards, and security for millions of workers
and weaken unions. Many regular workers would be shocked to learn
that workfare threatens not only welfare recipients. It also threatens
them, since they are forced to compete for the same number of
jobs with those lacking any protection. In contrast, fair work
creates additional jobs and thus reduces the pool of job seekers.
This strengthens the ability of workers to maintain and even raise
their wages and work standards.
In sum, workfare, which stigmatizes and humiliates the poor,
undermines wages and standards for all workers while fair work
strengthens their position. (As will be seen later, fair work
also demonstrates the range of needs that private enterprise does
not satisfy.) These relationships are not widely understood by
workers, although they are by business. As a result, workfare
has been politically popular, while public employment programs
have been the target of effective, unremitting criticisms by conservatives
and business.
Public employment programs: part of our heritage
Although government job creation programs have at times been
considered "un-American," nothing could be further from
the truth. They have a long history in the US and have been enacted
periodically, especially when rising unemployment has caused protest.
For example, during the Embargo of 1807, a mass meeting of unemployed
seamen led New York City to put them to work on projects such
as building the new city hall and cleaning and repairing streets.
Public works projects were set up by cities during recessions
and depressions from the early 1800s through the first few years
of the Great Depression of the 1930s. They were primarily developed
for white, male heads-of-households, although some sewing projects
were set up for women and for men unable to work outdoors.
Job programs and their accomplishments
The largest and most innovative public employment programs were
established in the 1930s as part of the New Deal. During this
most severe depression in the 20th century, unemployment rose
to 25 percent in 1933 and was still nearly 15 percent in 1940.
Millions of people were put to work in the Federal Emergency Relief
Administration (FERA), Civil Works Administration (CWA), and Works
Progress Administration (WPA). The programs generally paid workers
local wage rates, but allowed them fewer than customary hours
of work to encourage them to look for private sector jobs. In
addition, the Civil Conservation Corps (CCC) and the National
Youth Administration (NYA) served young people. (Another type
of New Deal program, the Public Works Administration stimulated
private employment through publicly-financed construction projects.)
While opponents frequently accused New Deal programs of being
useless "make-work," the opposite is true. They literally
changed the face of America. Participants not only performed useful
work. Most of it would not otherwise have been done, and the country
would have been poorer as a result. Workers built and repaired
1 million miles of roads and 200,000 public facilities, including
schools, playgrounds, courthouses, parks and athletic fields,
swimming pools, bridges, and airports, drained malarial swamps,
and exterminated rats in slums. They created works of art, gave
concerts, set up theaters throughout the country, even in small
towns, set up nursery schools, served over 1.2 billion school
lunches to needy children, gave immunizations, taught illiterate
adults to read and write, and wrote state guidebooks--classics
that are still in use. They sewed 383 million coats, overalls,
dresses and other garments, and, using surplus cotton collected
by the Agricultural Adjustment Administration, made more than
a million mattresses that were given to destitute families, as
were the garments.
There were programs for youths, who were especially hard-hit
by the Depression. Over the years, millions of them were served
by two programs. The innovative CCC targeted unemployed young
men, whom the program housed in camps located in every state.
(At Eleanor Roosevelt’s insistence, some camps were established
for young women, but their presence remained
minuscule.) Most CCC workers were poorly educated, and had never
held a steady job. They were given food, clothing, shelter, medical
care, and, eventually, educational services. Most of their wages,
which were similar to those of Army privates, were sent to their
needy families. This was America’s first massive conservation
program. For example, CCC workers planted 2 billion trees, including
many on burned or eroded hillsides, stocked nearly a billion fish,
and built a network of fire-lookout towers, roads, and trails.
In addition to conserving many lives of that generation, the CCC
left future generations a legacy of land, water, and forestry
preservation.
The NYA gave part-time jobs to out-of-school young men and women
as well as high-school and college students. Students generally
did clerical jobs, but many worked in their fields of interest.
Some college students helped faculty with research, including
the late Lynn Turgeon, who was a member of the National Jobs for
All Coalition. (Turgeon, for many years Professor of Economics
at Hofstra University, was a prolific author. His last book was
Bastard Keynesianism.)
Public employment programs were terminated in the early 1940s
when World War II ended the Great Depression and brought unemployment
below 2 percent of the labor force. Except for small programs
during the 1960s, jobs programs were not created again until the
1970s. The Comprehensive Employment and Training Act (CETA) was
the major program of the decade. A Public Service Employment (PSE)
component provided a range of socially useful work. For example,
CETA workers developed community recreation and arts programs,
set up screening clinics in hospitals, and weatherized low-income
homes. They worked in law enforcement agencies, day care and senior
centers, battered women's shelters, and even in some activist
organizations. In fact, many non-profits remained in existence
or became more effective in part because of CETA workers.
Public employment programs: problems and progress
Although past fair work programs have much to commend them,
they had two serious limitations. First, they never provided enough
jobs: they have never served all those eligible for them. Even
at the peak of the massive programs of the 1930s, WPA jobs were
provided for only 4.4 million--only one-third--of the unemployed.
Yet this experience shows that, given the will, the government
was able to provide decent work for many millions while meeting
urgent social needs. This was at a time when both the labor force
and the government were far smaller and the country much poorer
than it is today. Second, the programs continued the existing
discrimination based on race and gender. This was most blatant
in the 1930s' programs: participants were disproportionately white
males, who were typically paid more than women and minorities.
But discrimination is not inherent to such programs. The New Deal
preceded the Civil Rights Act and women’s movement by decades,
and discrimination was still rampant and legal throughout society.
Most blacks still lived in the South, disenfranchised and in near
peonage, and southern Democrats wielded enormous power.
Some progress was made in the 1970s, as CETA improved pay and
occupational equity for women and people of color. By 1978 there
were special training programs for teenage mothers; for women
who had raised their families but had few marketable skills; and
for women to learn higher wage, non-traditional trades usually
closed to them. Low-income trainees could take these courses because
they received stipends and were reimbursed for expenses. Then,
in 1981, even though unemployment was rising rapidly, the Reagan
Administration terminated PSE, already cut back sharply by the
Carter Administration, and Congress allowed the entire CETA program
to end the following year.
Public employment programs: constraints led to criticisms
Federal job creation programs have always been subjected to
unremitting criticisms. Projects were seen as inefficient and
unnecessary "make-work;" participants replaced regular
government employees and program funds were substituted for state
and local moneys; wages were too high; and programs were rife
with graft, corruption, and mismanagement. There is little validity
to many of these criticisms, but some reflect contradictions imposed
on programs rather than inherent flaws.
Most problematic for the FERA, CWA, and WPA was the mandate
to create as many jobs as possible with their funds, but not replace
regular government workers or compete with the private sector.
This made economic and political sense to Congress, but left the
programs vulnerable to attack. To illustrate, construction projects,
especially road-building, employed large numbers of manual laborers.
Workers often used picks and shovels, not the grading and paving
machinery used by private firms. Thus, public work was less efficient
than private, that is, more labor was used. But that was following
the mandate to create the maximum amount of work possible—to
make work.
The restriction against replacing public workers also generally
made sense since ordinary government services should be provided
by people hired through normal labor market channels. Yet during
the 1930s many municipalities had such low tax revenues that necessary
services were cut. (Higher unemployment meant that there was less
income to tax). Rural schools were especially hard hit as lack
of funds led many towns to close them for all or part of the year.
Responding to this need, one FERA project reopened rural schools,
providing work for unemployed teachers and education for children.
Not surprisingly, when clearly useful goods were produced in
an efficient manner, the projects came under scathing criticism
and were shut down. This was the fate of some innovative projects,
like the mattress-making project and the project to reopen factories.
None of the goods produced were sold through normal market channels.
They were given to relief recipients or used in public facilities
such as hospitals. Nevertheless, the projects were lambasted for
competing unfairly with the private sector. In fact, they provided
goods that otherwise would largely have been unavailable or unaffordable
for the users.
Critics regularly castigated the WPA as "leaf-raking."
(Such maintenance services were prohibited in 1934. However, leaf-raking,
like housework, is necessary but unappreciated: no one notices
whether leaves are raked, garbage is collected, or snow is shoveled--or
whether the dishes are washed, the floors are swept, and dinner
is prepared--unless these tasks are not done.) Mainly, critics
used "boondoggling," "make-work," and "leaf-raking"
to berate these programs. While some "make-work" did
exist, mainly due to restrictions on what programs could do, these
were the exception. Just a partial list of the WPA accomplishments
(above) shows the absurdity of these charges.
The far smaller programs of the 1970s were even more constrained
than their 1930s' predecessors--but were also subjected to intense
criticism. While the 1930s' programs routinely provided work for
1.4 to 3.3 million people each month, the maximum reached on CETA
was only 742,000 people of a much larger labor force. (However,
the unemployment rate was much smaller--6 percent in 1978 compared
to nearly 22 percent in 1934.)
More importantly, the scope of the programs was much narrower.
Construction and projects to produce goods for needy families
were gone. All that remained were services. Yet services, especially
those provided by government, are easy to target as "make-work."
The basic assumption is that if the services were useful, the
private sector would already be providing them. Further, many
now believe that the private sector is far more efficient than
the government since the latter is not subject to profitability
criteria. The magic of the bottom line is assumed to result in
the best possible organization of production. There is, however,
surprisingly little factual evidence to support this view. Indeed,
Professor Elliott Sclar of Columbia University has found in his
research that the public sector is often more efficient in producing
the public services currently being shifted to the private sector.2
CETA was also plagued by charges of "fiscal substitution,"
i.e. the substitution of federal funds for state and local funds
and of CETA workers for regular government employees. These charges
increased in intensity through the 1970s. However, the severe
recession of the mid-1970s, along with state initiatives to limit
taxes, caused a shortfall in state tax revenues, so that many
government services would not have been provided without CETA.
Since some of these services had previously been provided by government
agencies, it looked like substitution even though it was not.
Critics in both the 1930s and the 1970s also complained that
wages in work programs were set too high, thus attracting workers
from private sector employment. In fact, this could happen only
in exceptional circumstances since there were never enough jobs
for those who needed them. WPA workers who refused reasonable
private jobs could be discharged. At the present time, given the
14 percent decline in the purchasing power of average weekly wages
since the early 1970s, we should be putting in place a range of
strategies that set an adequate wage floor and encourage increases
in some private sector wages.
Finally, allegations of graft and corruption were often heard
in the 1930s and the 1970s. Although these criticisms are commonly
made of a range of government programs, the consequences are very
different depending on the program criticized. The $600 coffee
pots purchased by the army or Central Intelligence Agency (CIA)
involvement in illegal activities have led to little fundamental
change in either of these institutions. In contrast, attacks on
social programs for in effect providing economic options for the
poor frequently lead to their limitation or abandonment. More
to the point, there is scant evidence of widespread abuse or waste.
Some programs most derided by foes, like the WPA cultural projects,
are now highly regarded. They helped sustain the talents of many
artists, such as Ben Shahn, Willem de Kooning, and Jackson Pollock,
and writers like Richard Wright, Arthur Miller and Studs Turkel.
More recently, while the media concentrated on a few unrepresentative
cases, careful studies have found little evidence of fraud and
abuse in CETA programs.
Public job creation: needed along with training and support
services
To evaluate public employment programs, it is important to see
the constraints imposed on them and to respond to time-worn criticisms,
especially charges of inefficiency and "make--work."
Historically, government employment programs have been put in
a no-win position: programs that turn out goods and services not
produced by the private sector are criticized as inefficient or
make-work, while those that replicate goods produced by the private
sector are condemned as "socialist."
We need fair work programs instead of workfare.3 We need to
build on what we have learned from past programs--both their strengths
and their shortcomings--and adapt them to current conditions.
We can learn from the range and scope of the New Deal programs,
and from the education and training programs of the 1960s and
1970s. Work in the home raising children or caring for the sick
or infirm should be recognized as "real" and socially
necessary, worthy of social subsidy--but not only for welfare
recipients. We need child care, paid parental leave, children’s
allowances, and more elder care.4 Rather than the devolution of
federal programs to the states, we need federal job creation and
provision of welfare, education and training. Only the national
government can command the necessary resources, impose uniform,
minimum standards and design programs which avoid a competitive
race at the state and local level to shed financial responsibility.
Public job creation: matching job needs with human needs
There is much that needs to be done that a public employment
program can do, such as repairing our crumbling roads and bridges,
building a high-speed railroad system, developing recreation programs
for teens, and adding teachers’ aides to classrooms. Funds
for job programs can easily be found.5
The private sector won't create enough decent-paying JOBS FOR
ALL. Nor will it meet the nation’s human and infrastructure
needs. It’s up to us to pressure the government to do what
the private sector can’t or won’t do.
Notes:
1. The end of welfare also means the end of Medicaid eligibility,
sometimes after a short transition period.
2. Presentation to Columbia University Seminar on Full Employment,
April 1997, and You Don't Always Get What You Pay For: The
Economics of Privatization, NY: Cornell U.P. , 2000.
3. Elsewhere, the Coalition has recommended other measures, including
fiscal and monetary policy, to expand employment. See, for example,
A Growth Agenda.
4. See Uncommon Sense # 17: "Needed: A National Commitment
to Families".
5. Philip Harvey has calculated that job creation programs can
largely pay for themselves. See Uncommon Sense #14, "Paying
for Full Employment." Additional funds could be made available
by reinstituting more progressive income taxes, cutting corporate
welfare benefits, cutting excessive military expenditures and
reinvesting them in more labor-intensive domestic programs, requiring
those responsible for the bank failures to pay (instead of other
taxpayers), and imposing taxes on speculative flows of foreign
currency or very short-term holdings of stocks and bonds (which
would also help stabilize the economy).
Nancy E. Rose is author of Put to Work: Relief Programs in
the Great Depression (New York: Monthly Review Press, 1994)
and Workfare or Fair Work: Women, Welfare, and Government Work
Programs (New Brunswick, NJ: Rutgers University Press, 1995).
Program data and statistics are from these books, and sources
below.
Other sources: Irving Bernstein, A Caring Society: the New
Deal, the Worker, and the Great Depression. Boston: Houghton
Mifflin, 1985; Helen Ginsburg, Full Employment and Public Policy
in the United States and Sweden. Lexington, MA: Lexington
Books, 1983; Sar Levitan and Frank Gallo, Spending to Save:
Expanding Job Opportunities. Washington, DC: George Washington
Univ. Center For Social Policy, 1992.
_____ Editors: Helen Ginsburg, Economics (Emer),
Brooklyn College, CUNY, and June Zaccone, Economics (Emer.), Hofstra
University
The National Jobs for All Coalition is a project
of the Council on International and Public Affairs.
|
