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    Letter No.58
    18 April, 1997

    The Word is Workfare
    by the Jobs Letter Editors

    As policy development continues on NZ's own work-for-the-dole schemes, community groups and opposition parties are starting to raise queries over the details of how these 'workfare' measures will be implemented. At present the time for implementation is not expected before mid-1998.

    Questions on the agenda include: Will the work-for-the-dole participants be treated as employees? Will they be covered by legislation such as ACC and Occupational Health and Safety? What the compliance costs will be for the employers? Will unions and community groups be consulted over the development of work-for-the-dole policies? Will the final package be compulsory or contain elements of choice? What will be the effect on abatement rates if the part-time work-for-the-dole participants are offered other part-time paying work?

    In this special feature we look at how British and American government authorities are facing these and other issues in the development of their own work-for-the-dole schemes.


  • In a remarkable break with Britain's post-1945 welfare policy, both Labour and the Conservatives plan to introduce workfare schemes after the coming UK elections. The government has been running several workfare pilot schemes which it will now extend throughout the country. These give the long-term jobless 13 weeks help in finding a job. If their search does not succeed, then they are placed for 13 weeks in compulsory work.

    If the unemployed refuses to search for a job or take a compulsory one, then their benefit payments are stopped. In the pilot areas, many people stopped claiming benefits when presented with these alternatives -- leading to a local drop in the official unemployment figures.

  • The UK Labour Party's plan for workfare schemes focus on the young (under 25 yrs) and the long-term unemployed (over 6 months). 250,000 of these people will be offered a choice of four options: a six-month subsidised private-sector job, six months with a non-profit organisation, paid full-time study, or a place on a new 'environmental taskforce'. Also under Labour, there will be a tax rebate offered to firms hiring any adult who has been jobless for over two years.

    Source -- The Economist 22 March 1997 "Working for your welfare" by the Economist editors.
  • see Economist Article

  • United States
  • America is coming to terms with the impact of last year's welfare law, which sets time limits so that most welfare recipients must find work within two years. The US has around 4m adults on welfare, and about half of these are long-term recipients. By 2002, half the welfare caseload must be in work or in 'work-related activities".

    The prospects of these measures being successful appear dim. The Economist quotes LaDonna Pavetti, a welfare expert at the US Urban Institute, saying that only 20% of current welfare recipients will be able to find jobs without government help. Another third will need minimal assistance -- job-search schemes and training. A hard core of welfare recipients, however, suffer from learning disabilities, medical problems and other severe handicaps. The Economist: "Preparing these people for any sort of steady employment will be a long, hard and expensive process ..."

    Source -- The Economist 8 March 1997 "The muddled maths of welfare-to-work" by the Economist editors.
  • see Economist Article

  • Peter Edelman, a former US assistant secretary at the Department of Health and Human Services, resigned in protest over the signing of last year's welfare bill. He was a senior bureaucrat who has worked for over 30 years on welfare issues, and he felt that the new bill will only make poverty worse. He has written a criticism of the issue in an article "The Worst Thing Bill Clinton has done" published in the March issue of Atlantic Monthly. (Available on the internet : Edelman is particularly critical of the two-year time limit on welfare that pays no mind to the job market, and a lifetime limit of 5 years no matter the economy, and warns that the end result will be increased homelessness, malnutrition, drug abuse and violence.

    Edelman: "For sixty years Aid to Families with Dependent Children (AFDC) had been premised on the idea of entitlement. But now 'entitlement' has become a dirty word. From now on there will be block grants. This will mean that there will be no federal definition of who is eligible and therefore no guarantee of assistance to anyone. Each state can decide whom to exclude in any way it wants ..."

  • According to Edelman, before the Clinton signed it, the President had been presented with a government-commissioned analysis of the new welfare bill which showed that the bill would push more than a million children into poverty. In the Senate floor debate Senator Edward Kennedy, who voted against the bill, described it as "legislative child abuse".

    Source -- The Atlantic Monthly March 1997 "The Worst Thing Bill Clinton has Done" by Peter Edelman"
  • see Atlantic Monthly Feature

  • Bill Clinton announced last week that the US federal government will hire at least 10,000 people off welfare over the next four years in an effort to cope with the effects of the new welfare laws. He was highlighting his own plans in an effort to urge private sector contractors that work with government to also hire people off welfare.

    The White House says that the 10,000 jobs , some of which would be part-time or temporary, would typically be entry-level, low-skilled positions, including clerical, janitorial and outdoor forestry tasks. They also include census-takers for the Commerce Department.

    Clinton's 10,000 jobs are largely a symbolic act, and will only be a drop in the bucket of what will be necessary under the new welfare laws -- they represent only 0.5% of the two million jobs that Clinton himself estimates will need to be created.

    Source -- Reuters News Service 11 April 1997 "Clinton: Govt will hire 10,000 off welfare"
  • see Reuters Story

  • Wisconsin Wobbles
  • The Wisconsin Welfare model has been promoted in NZ as one of the options that Social Welfare is looking at in its measure to move beneficiaries "beyond dependency". But the Wisconsin model is starting to show some controversial tangles -- particularly in the way it blurs the line between a 'paid employee' and a 'workfare worker'. And these are issues which will no doubt effect the NZ design for similar schemes.

    Under the Wisconsin programme to move people off welfare, people holding public jobs are not considered employees. So, they don't get overtime or benefits, and in most cases they do not get even the minimum wage. The battle lines are emerging around this issue, as unions want welfare recipients doing public work protected by federal labour laws ... while business groups say that recipients on public or private jobs are trainees, not employees, and should not be protected.

    Union leader Don Johnson, president of the Illinios AFL-CIO, says that the labour movement is not opposed to helping people become active wage earners: "But we are opposed to people being forced into positions with no rights at all, virtually like slaves ..."

  • Wisconsin officials say that welfare recipients are directed into four work categories, ranging from a mixture of public jobs and training to going directly into work. Says David Blaska of the Dept of Workforce Development: "The lower two options are not jobs. We don't want to make them into career options. And if you raise this thing up to where transitional jobs are paying minimum wages, they would soon become a terminal position ..."

    The same concern is shared by the Wisconsin business community. If companies must treat welfare recipients working on short-term projects as full-fledged workers covered by federal labour laws, they would be "much more reluctant" to create the new positions in the first place.

  • Milwaukee Mayor John Norquist is campaigning to have workfare recipients receive the minimum wage, and is urging Wisconsin officials to abandon the monthly grant for workfare employees. He says that if this is a financial burden for the state, then the state should trim the required hours so that it can treat workfare employees as "real employees". This would mean people getting a real paycheck, and not a monthly welfare grant.

  • Meanwhile, in an effort to organise workfare workers into a union-style collective, the US nation-wide community group ACORN has signed up several thousand workfare employees in New York and Los Angeles. The group has staged several demonstrations protesting job conditions in New York City, which has more than 30,000 workfare recipients cleaning streets and doing clerical work alongside city employees.

    Source -- Chicago Times 13 April 1997 "Workfare Idea Needs Some Work" by Stephen Franklin

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