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From the Hammock onto the Trampoline
Workfare Policies in the U.S. and their Reception in Germany
Published online by Cambridge University Press: 06 March 2019
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For a long time now the German labor market has been deep in the throes of a crisis. The search for ways out has become the leading topic of political debate, at the latest since the election year 2002, with the main emphasis centering round concepts for activation programs. These concepts have been under international academic discussion for several years. In some countries they have meanwhile been put into practice, for instance within the scope of the sweeping welfare reform carried out in the United States (U.S.) in the mid-nineties under the slogan “from welfare to work”.
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References
1 This metaphor was used for the idea of an activating welfare state by Bodo Hombach, in: Aufbruch - Die Politik der Neuen Mitte, 2nd edition, Munich 1998, p. 199.Google Scholar
2 An overview is provided by Ivar L⊘demel/Heather Trickey, “An Offer You Can't Refuse” – Workfare in international perspective, Bristol/GB 2000.Google Scholar
3 Cf. Bundesrats-Drucksache 52/02, dated 23 Jan. 2002.Google Scholar
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5 A brief overview of the economic structure of that region is provided by Wisconsin's department of commerce under http://commerce.state.wi.us/MT/MT-FAX-0703.html#24; it not only emphasizes the great abundance of natural resources, as well as the successful agricultural and tourism sectors, but also refers, for instance, to the acclaimed university system and the fast growing services sector – fields that fit less what might be the cliché prevailing in Germany.Google Scholar
6 Literature on the Wisconsin model is meanwhile available in vast quantities. For a brief overview from the U.S. perspective, cf. Jason Turner, Wisconsin Works, Working Paper No. 75 of the Konrad-Adenauer-Stiftung, June 2002. Details on the reform, in particular its core program “Wisconsin Works” (“W-2”), are best accessed through the Internet on the web site of the Wisconsin Department of Workforce Development (http://www.dws.state.wi.us). For a comprehensive evaluation, cf. the report, likewise available on this web site, by the “2001-2002 Joint Legislative Audit Committee” entitled “An Evaluation: Wisconsin Works (W-2) Program”, April 2001.Google Scholar
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16 Comprehensive empirical material on this subject is found in the so-called Green Books issued by the Committee on Ways and Means of the U.S. House of Representatives. They comprise up-to-date overviews on matters of social policy, which are compiled every two years for the members of Congress. Cf. in particular Green Book 1994, p. 1108 ff.; Green Book 1996, p. 1177 ff.; Green Book 1998, p. 537 ff. An authentic portrayal of the problem from U.S. perspective is delivered by the following citation from Gillespie, Ed/Schellhas, Bob (eds.), Contract with America: The Bold Plan by Rep. Newt Gingrich, Rep. Dick Armey and the House Republicans to Change the Nation, New York, 1994, p. 75. The authors begin by citing an often stated objection to the reform and then seek to refute it: “Myth: Cutting off a meager check for a welfare mom will not deter teenage pregnancy. – Fact: Republicans understand one important thing ignored by most Democrats – incentives affect behavior. Currently, the federal government provides young girls the following deal: Have an illegitimate baby and taxpayers will guarantee you cash, food stamps, and medical care, plus a host of other benefits. As long as you don't work, we'll continue giving you benefits worth a minimum of $12,000 per year … It's time to change the incentives and make responsible parenthood the norm and not the exception.” This view of the problem was by no means confined to political programmatic literature. For an example from academic debate, cf. Brinig, Margaret/Buckley, F.H.: Welfare Magnets: The Race for the Top, 5 Supreme Court Economic Review 141-177 (1997).Google Scholar
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19 For quantitative substantiation regarding U.S. developments, see Günther Schmid/Bernd Reissert/Gert Bruche, Unemployment Insurance and Active Labor Market Policy - An international comparison of financing systems, Detroit 1992, pp. 185, 196, 211. For more recent data, cf. as an example, Christian Schubert, “Mehr Geld für die Armen – und mehr Ungleichheit”, in: FAZ of 8 Jan. 2003.Google Scholar
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21 A comprehensive overview is provided in Green Book 2000, note 16, p. 378 ff. According to calculations set forth there, Wisconsin ranks third behind Idaho and Wyoming with a reduction of nearly 74%.Google Scholar
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28 Since its low of 3.9% in October 2000, the unemployment rate has been rising at a near continuous pace and was last reported at 6% for December 2002; cf. the web site of the U.S. Department of Labor: http://www.dol.gov.Google Scholar
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30 Also cf. the press release by the U.S. Department of Labor, note 22.Google Scholar
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36 Only recently has this central element of U.S. labor market policy, introduced several years ago, found appropriate notice in Germany; for a very recent depiction, cf. above all Bruno Kaltenborn/Lars Pilz, Kombilöhne im internationalen Vergleich, IAB Werkstattbericht 10/2002, notably p. 9 ff.; also see Hans-Werner Sinn/Christian Holzner/Wolfgang Meister/Wolfgang Ochel/Martin Werding, Aktivierende Sozialhilfe – Ein Weg zu mehr Beschäftigung und Wachstum, ifo Schnelldienst 9/2002, notably pp. 16 ff., 24 f.Google Scholar
37 Regarding the total volume of EITC, cf. Sinn et al., ibid., p. 17 (with figures for 1999). Federal expenditure on the AFDC Program had last risen to about 24 billion dollars in 1996; cf. Graser, note 12, p. 157. Subsequent rises were ruled out with the reform.Google Scholar
38 Cf. Green Book 2000 (note 16), p. 809 (figures for 1999).Google Scholar
39 For an initial brief overview on the childcare situation in the U.S., cf. Uwe Wilke, note 7, p. 57 ff.; a survey on the current state of investigation into the effects of the reform on the living circumstances of the children impacted by it is presented by Martha Zaslow/Kristin Anderson Moore/Kathryn Tout/Juliet P. Scarpa/Sharon Vandivere: How Are Children Faring under Welfare Reform?, p. 79 ff., in: Weil/Finegold, note 29; explicit reference is made there to the fact that the status of investigation, notably as regards smaller children, is highly deficient (p. 98). The little information available sounds alarming. Thus the results of a survey published in 1999 show that 40% of the activated former welfare recipients were not successful in making sufficient arrangements for the care of their children; cf. Loprest, note 31. Beyond this, one must rely on individual case descriptions. An especially oppressive portrayal is given in the above-cited documentary film by Michael Moore (note 32). It includes the story of a six-year-old boy who shot a fellow school-mate. Shortly before, he and his mother, an activated “welfare mom” with two low-paid jobs, had been forced to move out of their old apartment because she could no longer afford the rent.Google Scholar
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57 This by no means applies only to the draft of the “Offensiv-Gesetz” but equally to the so-called “Job-AQTIV Gesetz” of 10 Dec. 2001, BGBl. I p. 3443, which had been enacted shortly before and had a similar ring to it. For a comprehensive discussion of the new regulations and how they originated, cf. Jürgen Kruse/Irene Zamponi, Das neue Recht der Arbeitsförderung, Baden-Baden 2002.Google Scholar
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77 A possible example here could be the aforementioned problem of wage differentials – that is, if the creation of a low-wage sector were actually decided, but in the end proved those right who considered its potential employment effects in Germany to be minor because a corresponding demand for labor was lacking in the first place.Google Scholar
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