Sharon Smith Archive   |   ETOL Main Page

Sharon Smith

Letter from the US

The two-year plan

(February 1994)

From Socialist Review, No. 172, February 1994.
Copyright © Socialist Review.
Copied with thanks from the Socialist Review Archive.
Marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

‘Lines at soup kitchens grew by 13 percent ... space at homeless shelters rose by 10 percent last year’

As 1993 drew to a close, the first real signs of economic recovery began to emerge in the US. As soon as the December unemployment figures were released, showing a drop to 6.4 percent from 6.8 percent the month before, Clinton seized the opportunity to pat himself on the back. Crediting his administration with turning the economy around, he boasted of his first year in office. ‘Look at the direction we’re going in. We have unemployment down, investment up, no inflation and low interest rates. We are moving in the right direction.’

But Clinton conveniently neglected to mention wage or poverty statistics – those show that for the vast majority of people in the US things got worse, not better, during 1993. Even among union workers, wage increases negotiated last year failed to keep pace with inflation.

Lines at soup kitchens grew by 13 percent, while demand for space at homeless shelters rose by 10 percent during the last year. Meanwhile 2 million people, most of them employed, lost their medical insurance last year – the largest annual increase in a decade. This brings the total number of Americans without any health coverage to a staggering 39 percent, or one person in six. It is now estimated that 30 million people, more than 10 percent of the population, do not get enough to eat.

And an increasing number of the poor are working. For example, during the first 30 months of the recovery, more jobs were created by the discount chain store, Wal-Mart, than any other single employer. The owners of Wal-Mart, the Walton family, have a net worth of over $25 billion, the single largest fortune in the world. But wages at Wal-Mart usually start at $10,400 a year, a poverty level wage for a working family. Of the new jobs created last year, 60 percent were in the low wage categories of part time or temporary work. Such workers, known as ‘contingent’ workers, typically receive no pensions, no sick pay or vacations, and no medical insurance. Contingent workers made up a third of the US workforce last year.

Overall, real wages fell by 1 percent last year, as they have each year since 1973. Meanwhile, executive pay increased last year by 22 percent. So while 1993 signalled the end of Reaganism, it hasn’t by any stretch of the imagination marked the year when the gap between rich and poor finally began to close in the US.

Clinton hopes to widen the gap still further in 1994 by taking aim at welfare. Like the British Tories, Clinton aims to score ideological points by scapegoating poor single mothers for violating ‘family values.’ In a recent interview with Newsweek magazine, Clinton said, ‘I believe this country would be a lot better off if children were born to married couples ... So I think that as a society, we ought to say, “We’d like for our babies to be born into intact families”.’ He added, lest he seem to be leaning too much in the direction of choice, ‘As long as we make it clear that we are not advocating abortion over childbirth.’

Clinton’s Secretary of Health and Human Services, one time liberal Donna Shalala, posed the question even more sharply: ‘I don’t like to put this in moral terms, but I do believe that having children out of wedlock is just wrong.’

‘Two years and out’ is at the centre of Clinton’s welfare reform plan. Clinton’s plan cuts off payments to women receiving welfare, known as Aid to Families with Dependent Children (AFDC), after two years. Another key feature of the plan is an emphasis on establishing paternity of welfare children and forcing fathers to pay child support.

Other options being considered include cutting off all welfare benefits to legal immigrants, including refugees. Clinton will undoubtedly seek support from the Republicans, who have proposed even stricter measures. The Republican plan would impose even shorter time limits on welfare payments; would cut benefits to welfare mothers who continue to have children out of wedlock; and would force teenage mothers to live with their parents.

Although it will be some time before this plan is put into practice, Clinton has granted waivers allowing states to create their own draconian policies to penalise welfare families. Some states now punish poor parents if their children miss too many days of school, if their rent isn’t paid on time, or if they refuse to be fingerprinted by government authorities. For the last year, the state of New Jersey – which pays only $64 per month per child – has enforced a law denying welfare payments for children conceived while a woman is on welfare. The state of Iowa now requires welfare recipients to sign ‘self sufficiency agreements’, which document how they are planning to get off welfare. The state of Wisconsin has enacted a law called ‘Work not Welfare’ to be implemented in two counties, which forces all welfare recipients to work 40 hours per week in a community service programme. After two years, the welfare payments are cut off.

The Mayor of Milwaukee has openly espoused doing away with welfare altogether. He recently argued, ‘I’m not thrilled with two years and out. I think the “out” ought to happen right away.’ Once the terrain of right wing crackpots, such schemes are now touted by mainstream politicians and the media. One right wing crackpot, Charles Murray, author of Losing Ground, a 1984 treatise on the culture of poverty, is now quoted approvingly in the mainstream press.

A recent Newsweek article favourably quoted Murray’s statement that welfare is ‘evil’: ‘I want to cut everything. I want to get rid of food stamps, subsidised housing – all of it.’ Newsweek went on to argue that, ‘There’s now a mountain of data [citing none] showing illegitimacy to be the smoking gun in a sickening array of pathologies – crime, drug abuse, physical and mental illness, welfare dependency.’ Such hysteria feeds every racist, reactionary myth about welfare recipients. In reality, welfare payments leave families living at 50 percent or more below the poverty line. The average AFDC family has two children. And the majority of welfare recipients are off welfare within a year. Until the last recession, blacks made up just one third of families on welfare. Since more blacks fell into poverty during the recession, that figure has climbed to 39 percent – still representing only a minority of people on welfare. Moreover most of the increase in family poverty since 1979 has occurred in two-parent families.

Sharon Smith Archive   |   ETOL Main Page

Last updated: 26 February 2017