Milwaukee, Wisconsin and W-2

TANF lifted most federal mandates on all 50 states, thereby allowing them to develop their own workfare programs, as they came to be popularly known. Under AFDC states were required to abide by strict federal mandates. With TANF (up for Congress reauthorization this year), states were allowed to create their own limits and programs with a bare minimum of federal oversight and regulation. Currently, the maximum limit for TANF benefits is five years. If recipients use up this time they are on their own to survive. States are allowed to choose their own limits below the five year TANF one. Wisconsin's is two years.

Policies directed at “reforming welfare” first gained a foothold in the early 1990s in Milwaukee, home of the $700 million arch- conservative Lynde and Harry Bradley Foundation. The richest and most influential of the conservative philanthropic foundations, Bradley funded the notoriously racist book The Bell Curve, helped implement school vouchers, fund- ed the movements that overturned affirmative action in California and Texas, and underwrote the development of W-2 through the Hudson Institute.

The foundation's overall objective is the complete reversal of all government programs benefiting the poor, working, and middle classes, including public education

Wisconsin became known as a national leader in welfare reform by implementing a pilot program Pay for Performance in 1996 as a precursor to the 1997 national legislation. This program created incentives for county welfare agencies to reduce caseloads. Much like the later W-2 program, Pay for Performance's success was predicated on how many people could be dropped from welfare and not on their quality of life after leaving the program.

With the beginning of W-2, Wisconsin created the most demanding workfare program whereby private agencies with multi-year state contracts replaced counties and the state in dispensing services to W-2 recipients.

The private agencies, according to numerous investigations by the Milwaukee Journal Sentinel, and other media and community organizations, benefited from this because profit motives were built “into the contracts that rewarded agencies for providing minimum levels of service,” according to “Passing the Buck.”

W-2: A Failing Program

The facts presented in “Passing the Buck” bolster claims that privatizing social services would deliver untold devastation to Wisconsin, especially to women and children of color, residing in poor Milwaukee communities.

Some critics of W-2 have argued that the program was created to secure a reserve pool of cheap labor for major corporations and non-profit service agencies. They further argue that those in power used W-2 to batter down other long-held government-controlled institutions like public education.

“Passing the Buck” verifies the grievances of W-2 recipients and their supporters by illuminating the onerous guidelines and other negative provisions of W-2 that, despite small concessions, have been largely ignored by the state and Milwaukee County.

Features of W-2 include the aforementioned time-limits, a “job ready” category that enables W-2 providers to deny services to anyone deemed employable, state policies that direct W-2 agencies to divert people from applying, forcing applicants to seek help from family, friends, and neighbors before processing their applications, or requiring a 60-day job search, and limited options for pursuing education or skills development.

With state contracts stipulating that private agencies administering W-2 are to receive bonuses for reducing welfare “rolls,” the number of Milwaukee County W-2 recipients has declined 63 percent from 36,155 in 1997 to 13,351 in 2000. Various private agency executives in Milwaukee have received six-figure bonuses and other perks such as vacation packages for moving people off W-2, despite clear evidence that these individuals needed more help.

Reducing Numbers Doesn't Mean Success

As “Passing the Buck” documents, many former W-2 recipients were pushed into low- wage, non-union seasonal, or service-orientated jobs. In their rush for profits, agencies instructed its social workers that met and interviewed recipients to deny aid such as food stamps, childcare, and bus passes. Many W-2 recipients have issued grievances about the demeaning and erratic behavior of social workers who are being forced to shuttle recipients out of the program despite real and justified needs. Independent investigations by a variety of sources, including the Milwaukee Journal Sentinel, have confirmed this.

The implementation of W-2 also made it more difficult to enroll in federal entitlement programs, like Food Stamps and Medicaid. The conservative Hudson Institute concluded that 71 percent of former W-2 recipients are still living in poverty.

Most glaringly, the agencies didn't track the former recipients. Thus, various research has found that, at most, two-thirds of those who've left AFDC or W-2 since 1995 became employed, the rest are unaccounted for. The state freely admits that it can't determine their whereabouts or well- being.

W-2 proponents claim that reducing persons from W-2 is a success, regardless of their quality of life after leaving the program. Critics claim that this is a shallow outlook and one that ignores enormous institutional social barriers, such as discrimination based on class, sex, sexual identity, and race, and the political/economic context in which W-2 was created and continues.

Noting that the majority of those in need are single women with children who couldn't survive without help to meet basic needs, one congregation respondent said this situation was caused by “the disaster of the W-2 program and its lack of real success. There are many many people who have received no real assistance…. Expectations are ridiculous in some cases. Families are doubling up and doing without especially healthcare… The number of poor and working poor has jumped substantially. People are moving out more often leaving in their wake chaos and unpaid bills simply because they can't pay for utilities, etc.,” concluded the respondent.

Because evicting tenants is costly and time-consuming, most landlords find other means to evict, thereby overriding the legal process. Tenants also leave apartments when they can't make the rent. Therefore housing stability is difficult to quantify. Even the rather conservative Apartment Association of Southeastern Wisconsin, a local association of landlords, admits in a 1999 handout that the number of tenants that vacate immediately prior to a formal eviction process is four to eight times the number of actual evictions recorded.

Another area that keeps the poor in debt is the emergency room. Lacking insurance or denied Medicaid or other healthcare relief by a W-2 service provider, a recipient has no choice but to use the emergency room, not only for crises but for basic medical care, especially if one has children. This leads a poor recipient with a low-wage job, or no job at all, mired in an often unrecoverable cycle of debt causing untold social and psychological consequences for the individual and society which can't be quantified in any study.

Perhaps the most shocking statistics in the report fall in the area of housing. “Since January 1997, the American Red Cross and Interfaith Conference of Greater Milwaukee have operated an Emergency Overflow Shelter for women and children. In 2000, the shelter opened four times as many nights in 1997, and the number of women per night nearly tripled…. The difference between demand for and availability of emergency shelter increased 406 percent between 1997 and 2000.” states the report.

Furthermore, on a freezing mid-December night last month, the Milwaukee Rescue Mission, an overflow shelter often used only as a last recourse, was completely full for the first time in its decades long history.

“This research shows how changes in the welfare system have affected Milwaukee's communities,” said Dr. Kathleen Mulligan-Hansel, of the Institute for Wisconsin's future, and report co-author.

“Since welfare reform was implemented, communities have stepped in, investing more in programs to support low-income families. We should be asking if this system is sustainable or if there is a natural limit to how much community organizations can do.”

Recommendations

Passing the Buck” concludes with a call for immediate and long-term solutions on the state and federal level beginning with a restoration of a government safety net and, eventually, an end to privatization of government services.

“Observers and policy- makers should question the sustainability of a system in which private organizations take responsibility for providing basic support to low-income families and families in crisis. As the experiment with welfare reform evolved, the government “passed the buck” to community services. Evidence in this study demonstrates that it is critical for the government to reclaim responsibility for maintaining a safety for families in crisis,” the report concludes.

The report's recommendations include:

• Improving access and removing barriers to existing support programs, such as Food Stamps and Medical Assistance;
• Fully funding existing work supports, and removing onerous user fees and co-payments for working poor programs like BadgerCare;
• Modifying or eliminating time limits, especially for those in compliance and those with multiple barriers;
• Strengthening education and training provisions. Because education and training are critical to a satisfactory standard of living and “prevent a lifetime of low-wage work…federal TANF policy should provide support for them [W-2 and other state workfare recipients] to increase their skill levels so they can move out of poverty”;
• Ensuring access to work supports. The authors state that since fully funded work supports like healthcare, childcare, and Food Stamps are vital to the working poor they need to be adequately funded;
• Restoring benefits for legal immigrants. Under TANF, legal immigrants are denied access to Medicaid and Food Stamps.

In a press release announcing the findings of “Passing the Buck,” Pamela Fendt, of the Center for Economic Development at UW-Milwaukee and report co-author, stressed the need for urgency in implementing these recommendations.

“At the state level it is critical to make it easier for families to access basic supports. When W-2 was implemented many families lost their Food Stamps and Medicaid—the very programs that were meant to ease their transition to work or augment low-paying jobs,” said Fendt.

“In addition, the safety net features within the W-2 program need to be improved.”             Z

Bryan G. Pfeifer is an organizer with the Milwaukee-based labor and community organization, A Job is A Right Campaign.