Tuesday, June 7, 2011

Alberta welfare reform analysis

An interesting graduate student essay crossed my email this morning examining the short-term effect of Alberta’s 1993 welfare reform on welfare recipients and single mothers. Basically the study applied StatsCan data to the assertion of the time that “any job is a good job”.

During this time, Alberta reduced cash and other benefits to welfare recipients and limited benefits to those ready to work. It also increased how much a recipient could earn before benefits were reduced and implemented a variety of administrative measures designed to push recipients back into the workforce. This resulted in a drop in caseloads but not necessarily optimal outcomes for those who left the welfare system.

I’ve broken the important conclusion up into three pieces below and added some emphasis:
Both groups spent more time in the labour force and being employed. However, welfare recipients worked more hours with no significant changes in composite wage rate; whereas single mothers experienced 13.8 percent decline in wage rates but no change in paid hours. Both groups were more likely to be covered by collective agreement and participated in employer-sponsored pension plans. However, welfare recipients were also more likely to work regular evening schedule rather than daytime schedule.

Taking into consideration the responsibility of nurturing children among single mothers, the fact that single mothers experienced declined in wages but not significant changes in their work schedules; whereas welfare recipients in general saw no changes in wage rates but were more likely to work regular evening schedule might suggest the presence of compensation principle. Inflexibilities of single mothers in terms of working hours might prevent them to accept higher-paid jobs that require evening schedule.

Since the welfare reform prevented them from obtaining social assistance; however, these single mothers were prompted to accept low-pay jobs that they would not have otherwise accepted. This could be an undesirable policy outcome because the welfare reform might have introduced additional stress to single mothers by obligating them to provide for their children through working at low-pay jobs. (pp. 19-20).
In effect, this study suggests that the changes in welfare policy had the effect of re-commodifying labour. That is to say, workers were compelled to accept work they otherwise wouldn’t because reduced welfare availability applied the whip of hunger to them. This, not surprisingly, appears to have differentially impacted workers, with single mothers being more negatively affected.

-- Bob Barnetson

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