The Failure of Workfare: Another Reason for a Basic Income Guarantee

There has been a major shift in welfare policies in the developed world towards activation, decentralization, and privatization. The 1996 US welfare reform welfare for single mother families was no longer an entitlement and there were stiff work requirements enforced by sanctions and time limits. In Western Europe, although there is variation, welfare has become conditional for social assistance recipients - the "socially excluded." Social assistance is administered at the municipal level, which contracts with private companies. Caseworkers are supposed to make individualized contracts emphasizing work activities. This paper examines the field-level data in several US programs and finds that there is a symbiotic relationship between governments and contractors; caseworkers, whether public or private, focus on process rather than substantive plans; government does not question the data; contracts are imposed; the most employable are placed; and the most vulnerable are sanctioned or otherwise not allowed on welfare. Research in some European countries is showing similar results - activation programs are difficult to administer and increase the risks for the most vulnerable. Individualized contracts are a myth, given administrative constraints and client dependency. The paper argues that the difficulties of activation are an additional reason for a basic income guarantee. The socially excluded will have an exit option and well-being will be improved.