Wisconsin didn’t work.

Fraser Nelson has a interesting, if rather breathlessly cheerleading article on the Tory strategy on Welfare reform.  This approach comprises “Wisconsin-style welfare reform”, which apparently means telling people they don’t get any benefits if they turn down a job, any job. I’m not joking, that’s about as detailed as the analysis gets. Even Fraser admits the plans are vague).

Mr Nelson is quite effusive about Wisconsin. Here’s a quote

“When welfare stopped offering something for nothing, it lost its appeal. People chose work instead. Poverty rates among black children fell to the lowest since records began.”

Later Mr Nelson goes further in his exultation about the impact Wisconsin welfare changes have on poverty.

“Poverty lost in Wisconsin. And in promising to re-enact the battle here, using the same plan of attack, Mr Cameron is undertaking his boldest mission yet.”

Hmmm. “Poverty lost in Wisconsin”? How then do we explain this graph showing that Wisconsin poverty rates have actually increased compared to the rest of the USA?

wisconsin.jpg

This graph shows that during the economic downturn of the early 2000s Wisconsin’s poverty rates grew sharply. In fact poverty in Wisconsin grew faster than that of any other US state.  The reason is clear.  Forcing people to take any job or lose benefits works well when there are lots of jobs around- but when the economy enters a downturn- well, you end up with a lot more people who slip through the safety net.  People like these:

“From 2000 to 2004, the number of Wisconsin families that live on less than 50 percent of the federal poverty rate – or $7,835 for a family of three – nearly doubled. That’s not good news,” said Charity Eleson, executive director of the Wisconsin Council on Children and Families, a nonprofit, nonpartisan group that tracks child welfare issues in the Badger state.

In 2000, 44,000 children in Wisconsin lived in deep poverty. By 2004, that number had increased to 84,000.

Oh, and forcible evictions doubled.

The Wisconsin programme isn’t cheap, either.

 In fact it was more expensive than the scheme it replaced because they subsidised healthcare and childcare costs. (So much for Fraser’s apparent belief that “The idea that the solution to poverty is to give more resources to the needy has been tested to destruction”.)

Now none of this is to argue against welfare reform. On the contrary, I’m all in favour of it. Even when the upfront costs are high.

There’s a huge benefit to cutting welfare rolls (where Wisconsin is a success, but only one amongst many). Work is a great socialiser, and schemes for subsidised childcare, Tax credits to aid the low paid and support for training and investment in education can lift people out of poverty by getting them into work. As soon as people are working there’s the chance of betterment. 

That’s why the Government’s Welfare Reform bill makes a huge number of sensible changes, especially on Incapacity Benefit- requiring people to work where they can and providing real incentives and support to find work for people on IB and for single parents, alongside more rigorous checks on ability to work. (Full disclosure: I worked on this issue with ministers and advisers from from DWP in my previous existence).

What grates is not “the idea of “Welfare reform” but the blase proclamation of “Wisconsin style” reform as if this was a simple and obvious solution to poverty. Wisconsin isn’t a success story on poverty,  and those who champion it need to acknowledge that if they want to be taken seriously on the issue. 

Welfare reform can work well- but only if surrounded with the support networks that people need, and targetted assistance to keep families out of deep poverty when they fall short.  Even then, you have to be very careful that your policies don’t hurt the most vulnerable- as Wisconsin shows us.

It’s these latter, softer points that right wing advocates of welfare reform forget about. It’s easy to proclaim the virutes of telling people that if they don’t accept a job they won’t get benefits, but you have to face the reality that some of these people won’t be successful employees on day one. They’re often just not equipped for it. So you need to wrap that firm message on work with support and safety nets and training and basic literacy and childcare. If you don’t do that, many will fail and fall into worse poverty.

When people who consistently opposed the New Deal and to Tax Credits and  are contemptous of measures like Sure Start in the UK and Head Start in the US start talking about the need to cut welfare recipients, as if this by and of itself was a solution to poverty, I get nervous. 

Instead we should be talking about what gets people into work- and that requires carrot and stick, and often a crutch, a nursery place and a college course too. The Tory position appears to be to take away the carrots and to apply the stick with gumption.

That won’t work, will increase poverty rates and will lead to a worse situation for the very poorest. Mind you, “wisconsin style welfare reform” doens’t half run off the tongue well. 

6 Responses to “Wisconsin didn’t work.”

  1. donpaskini

    An excellent post.

    I am very worried about this. The press will cheer Cameron on for his ‘bravery’ (in agreeing with them and kicking the poorest), and while the Tory message is a lie, lots of people will want to believe that it is possible to cut benefits and also help people. It’s like how journalists write about how good Iain Duncan Smith’s report is, when in fact it was complete prejudiced drivel from start to finish.

    Labour’s response when they publish their proposals in January needs to be quick and effective, and we seem to have got out of practice at demolishing Tory proposals recently. This really is the return of the Nasty Party.

    (It’s another example of Cameron copying the playbook from the Republican Party as well, for those keeping score about that).

    Reply
  2. stephen

    Hi Hopi – hope you are well!

    Great Blog and very interesting posts – yet again your analysis demonstrates that when you dig into Tory claims they usually turn to dust.

    Your last comment is very interesting – I have noticed before how similar Cameron’s strategy seems to be to Dubya’s back in 2000 – i.e rubbish your opponents, commit to very little, make dog whistle noises to your right wing supporters, make largely meaningless liberal overtures to everyone else – does anyone remember “social conservatism” a real oxymoron if I ever heard one. And no one believed what subsequently transpired. Definitely an area worth further examination.

    Reply

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