‘Welfare to Work’ - the new poverty trap? A Liberal response

It has been said that passive welfare, whereby an individual received a handout from the State but was not asked to deliver anything in return, was creating ghettos of inter-generational poverty. As Noel Pearson has noted, this seems to remain the case in many indigenous communities. And it has also been said that the problem with the model of welfare devised in the aftermath of the Great Depression and expanded upon in the 1960s and 1970s, was that it assumed that "one size fits all".

The Howard Government has been an advocate of so-called "welfare to work" policies. In short, it believes that welfare recipients should participate in some form of activity if they are to continue to receive benefits. Single mothers, the young unemployed and even the disabled seem to be encompassed by this policy. The Treasurer, Mr Costello, believes that we need to "reform our welfare system so that the interaction between welfare and work becomes unashamedly more pro work …" And the Howard Government believes in tailoring welfare programs to each individual’s needs.

But despite what is often said about the "one size fits all" and passivity of post-Depression welfare programs, there is nothing new in the approach to welfare policy that demands reciprocity and that it should be tailored to communities and situations that individuals find themselves in - the great and much underrated US President Lyndon Johnson’s War on Poverty and Great Society programs of the mid-1960’s were built on such premises.

Be this as it may, the real issue here for a liberal is this - is an individual’s autonomy best realised through the application of a universal underpinning of reciprocity in the welfare system and through the individualisation of welfare?

Or, as the leading liberal philosopher John Gray would put it, it "is that a liberal commitment to personal autonomy itself compels an evaluation of the worth of different ways of living".

The evidence regarding the welfare to work approach and how it maximises an individual’s personal autonomy is mixed. And it is from the US that such a story emerges.

Remember that former US President Bill Clinton has cited as one of his great achievements of office his suitably "Third Way" welfare to work laws, passed by the Congress in 1996. These laws, which are now up for review, essentially handed welfare back to the States in the form of block grants and made those grants dependent on the States adopting welfare to work policies.

The Chicago based not-for profit Joyce Foundation, a welfare research outfit, has just released some fascinating findings on just how the Clinton reforms have been working in practice.

The Joyce Foundation report has found that welfare recipients are now more aware of the tougher requirements for receiving benefits and are positive about the changes. For example, 83 per cent of interviewed welfare recipients in Chicago agreed that it’s a "good idea" for people on welfare to be required to find work.

But the report also highlights the danger of simply relying on welfare-to-work policies alone to improve an individual’s autonomy. It has found that most people who come off welfare move into part time or short-term jobs. For example in Ohio, only 40 per cent of those who left welfare to work were still working 12 months later.

And more alarmingly, in "Illinois, Iowa, Michigan, Ohio, and Wisconsin, the average hourly wages earned by people who left welfare put a mother with one child slightly above the poverty line, a mother with two children well below the poverty line".

The Joyce Foundation confirms that many of those who are forced from welfare to work find it difficult to hold down jobs because of mental illness, childcare needs, transportation difficulties, and low educational qualifications.

In short, welfare to work policies do not of themselves, resolve the "poverty trap" issue and thus increase an individual’s personal autonomy. And they do not necessarily meet the unique needs of each individual through case management.

The Work for the Dole programs of which the Howard government is so enamoured are another illustration of this point. Designed to give people a thirst for work, they can have the opposite effect. The work component in them is often boring and does not give people long-term skills to help them in a sophisticated 21st century economy.

The Keating government’s "Working Nation" programs were a much better model of training and work orientation tailored to the individual.

Of course the proponents of these policies will argue that they are built on the entirely reasonable concept of mutual obligation. That is, that there is a contract between the society and the individual that means that the latter must agree to perform certain tasks because there is the consideration of taxpayer’s dollars.

Such an idea is wholly illiberal. For the classical liberal this contract is based on exploitation - i.e. withdrawal of benefits if the recipient fails to perform a task such as an appointment for an interview - and thus is not a genuine social contract as envisaged by John Locke, David Hume and others.

For a liberal a genuine welfare reform package would include substantial job skilling, educational opportunities, childcare, and early psychological intervention to deal with potential mental illness issues. If all these were available then the expectation that an individual should seek employment when in receipt of welfare would be more just.

As former US Presidential Candidate Bob Dole’s Press Secretary, Douglas MacKinnon, put it in the New York Times recently, we "will all be better off if the poorest families in our communities believe that they, too, have a better chance. They deserve nothing less."

But to achieve Mr MacKinnon’s noble aim we need to devise a welfare system that enhances genuine individual autonomy. This should be the basis of a program of welfare reform, not the politically advantageous rhetoric of "mutual obligation".

The "individual autonomy" policy approach to welfare is exemplified in an excellent recently released paper by Karen Christopher of New York’s Syracuse University. Ms Christopher argues that the way to increase the economic capacity of single mothers is not by encouraging marriage for marriage sake as some conservatives would have us believe is the panacea, but through policy packages that include subsidised child-care, paid-leave policies (why not, for example, allow single mother two weeks extra leave a year during school holidays?), and training programs that continually upgrade the skills of single-mothers.

Welfare to work policies on their own are little more than a political stunt to appease those in the community who envy welfare recipients. Without addressing underlying issues such as mental health, education and parenting capacity, we will still be stuck with the same old poverty trap that has always existed. A liberal approach to the issue, one that emphasises the individual’s autonomy, is the only way forward.