White House Drops Cut-Rate Jobs From Welfare Plan

The Bush administration backed away Wednesday from plans to pay welfare recipients less than the minimum wage for required work.

The announcement by Health and Human Services Secretary Tommy G. Thompson followed the disclosure that the administration was envisioning a broad category of public service jobs for welfare recipients that would not be subject to minimum-wage laws. The proposal--a reversal of current federal policy--had begun to stir controversy among congressional Democrats, unions and advocates for the poor as Congress considers changes in the nation’s $16.5-billion welfare program.

“President Bush and I will insist that welfare recipients receive at least the minimum wage for the hours they work, including community service jobs,” Thompson said in a statement Wednesday. “This is an important principle that I fought for as governor of Wisconsin and one that the president and I remain committed to today as we take the next step in welfare reform.”

The White House approach to welfare reform, first detailed last week, features an array of tough new requirements designed to steer welfare recipients into work, including supervised community service jobs.

A 36-page document on the policy, released by the administration last week, said that certain types of work, such as supervised community service, did not entitle welfare recipients to “a salary or to benefits provided under any other provision of law”--a reference to the Fair Labor Standards Act, which governs the minimum wage. Earlier this week, a high-level welfare official at the Health and Human Services Department explained the thinking behind that provision: that certain types of work experience for welfare recipients are not equivalent to real-world jobs and therefore do not have the same legal status.

But Wednesday, following a report about that finding in The Times, the administration reacted swiftly. “The bottom line is: We are proposing no change to the 1996 law governing minimum wage under the [welfare] law, and this administration has absolutely no intention of abandoning those very important protections,” Thompson said.

The administration’s decision countered an emerging backlash on Capitol Hill and was greeted joyfully by those who feared the creation of a subgroup of workers laboring at the bottom of the job ladder.

Rep. George Miller (D-Martinez) decried the notion of welfare recipients working at “near-slave wages” and warned that it “severely undermines efforts to pass this legislation.”

“We’re supposed to be helping people enter the labor force so that they are proud of working instead of receiving assistance,” he said. “That’s a little hard to achieve when you treat them like an army of exploitable employees.”

Welfare activists openly mocked the administration’s statement as a sign of internal confusion over its welfare plan.

“This is just the tip of the iceberg in revealing the extreme nature of the administration’s proposal,” said Deepak Bhargava, director of the National Campaign for Jobs and Income Support, a grass-roots network of anti-poverty activists. “What other measures are in the president’s plan that the administration will later recant?”

Critics of a sub-minimum wage--even when limited to certain disadvantaged workers--contend that it could drag down wages more broadly and could ultimately take jobs away from slightly higher-paid workers, who risk being replaced by lower-paid ones.

At the same time, Thompson’s statement raised new questions about how states would satisfy the stricter work rules the White House is supporting.

The administration seeks to place 70% of welfare recipients in jobs by 2007, a sharp increase from today’s 30% level. In addition, it would impose a more rigid definition of “work” than is the case today. Under the plan, welfare recipients would have to work 24 hours a week before being able to pursue such alternative activities as education and training for an additional 16 hours a week.

Experts said that states may face pressure to design their own job programs in order to meet the work goals, particularly in a weak economic climate. But many of the less affluent states may have trouble affording such efforts if they must pay the minimum wage.

The administration’s “change in direction . . . is very important and useful,” said Wendell Primus, director of income security at the Center on Budget and Policy Priorities, a Washington research group critical of the White House welfare plan. But, he added, Wednesday’s announcement raised new questions about the viability of the tougher work rules. “This backing away [from the minimum-wage provision]--what are the implications of the decision?” Primus asked.

Whether welfare recipients should be forced to work for less than the minimum wage has been fiercely disputed for years.

The issue flared up in the mid-1990s, when Congress overhauled the welfare system and set new work goals for recipients of public aid. Many Republican advocates of welfare reform endorsed proposals to exempt certain welfare-to-work activities from the federal minimum wage, which is currently $5.15 an hour. Some states, including California, have higher minimums.

The 1996 welfare reform legislation ultimately did not address the dispute. Then, in 1997 and again in 1999, the Clinton administration made clear that most such jobs, frequently referred to as “workfare,” were generally covered by federal laws on the minimum wage, safety and health, unemployment insurance and discrimination. States can consider welfare recipients’ monthly checks, along with food stamp benefits, as compensation in calculating their pay.

In response to Wednesday’s HHS statement, advocates for the poor expressed hope that the administration plans further changes to its welfare proposal, which critics say leaves states insufficient latitude to place welfare recipients in education and training programs.

“This addresses one significant problem in the plan, and I hope they can now address the others,” said Mark Greenberg, senior staff attorney at the Center for Law and Social Policy, a research organization with expertise in issues affecting the poor.

But Thompson, who as governor of Wisconsin pioneered welfare reform efforts, insisted that the White House approach is on target. “This will enable families to climb the career ladder and achieve self-sufficiency while gaining valuable work experience--the ultimate goal of welfare reform.”