Eva Bertram's book The Workfare State is the most interesting book on welfare and “workfare,” as she titles it, in recent years. Bertram masterfully explains how America's modern social safety net is not one that was negotiated between the Democratic party and the Republican party, but one evolved from the very beginnings of America's welfare state among factions of the democratic party. Its most interesting historical contribution is to explain how Southern vs. Northern Democratic party politics sowed the seeds of the current system, contrary to the conventional wisdom that 1980s and 1990s political differences between Republicans and Democrats led to our current system. The book ends with an excellent analysis of how effectively the new system dealt with the 2008 recession. Of course how one makes that assessment depends, as Bertram notes, on how one grades the effectiveness of a social safety net. Is it meant to eliminate poverty or remove people from the safety net? Readers interested in the New Deal, the New Frontier, the Great Society, or the 1990s Gingrich revolution should read this book.
Bertram begins by re-examining how the Depression created the desire for a social safety net. In its origins this safety net was based on need. The Depression created the exact climate for this change but also led to a debate on how one qualifies for aid. During the Depression there were millions unemployed by forces beyond their control. Many New Deal programs were meant to reduce the individual's risk from fluctuations of the market. However, as the author explains, even early New Deal programs recognized the importance of work. Hence direct relief programs such as FERA were quickly replaced by programs like the WPA. President Roosevelt understood the need to create “security against the major hazards and vicissitudes of life” (p. 17). This basic idea and its comparison with today's workfare vs. welfare state is the fundamental thesis of the book. The author's main question concerns role of a social safety net. Is it to rescue those who have fallen on hard times regardless of the cause, or is it to motivate and support the unfortunate to work and pull themselves up by their proverbial bootstraps?
It is difficult in the space allotted to summarize how many interesting points and facts the book introduces. One issue that is introduced in the book is the question of the mother's role in a household. Early on it was thought that the mother “should be enabled to stay home and take care of the children…” (p. 20). This stands in stark contrast to more recent ideas of the role of mothers in work and welfare. Today's system places a greater emphasis on the merits of work, which Bertram illustrates with the Earned Income Tax Credit and work requirements for general cash assistance.
Bertram's description of the role of Southern Democrats' role in the transformation from original New Deal ideas to what we have today is perhaps her most historically significant contribution. Specifically, she demonstrates the economic logic behind actions of Southern Democrats. Any student of economics will appreciate that incentives matter and southern economies were based on cheap labor. Social safety nets would inevitably raise reservation raises of low skilled workers and impact the economies of the South in a way they would not in the North. No doubt racism played a role, but economic rationality mattered also. The data that describe voting on relief in southern and northern states and northern states might be productively compared to states' current adoption of the Medicare provisions of the Affordable Health Care Act.
Finally, a great contribution of the book is the exposition of differences between the welfare state set up during the New Deal and its evolution to the workfare state that we currently employ. Bertram's book asks the fundamental question of what should be the goal of a social safety net. Is it meant to shield people from the fluctuations of the macroeconomy or is the misfortune of the individual due to personal choices that the government can hope to adjust? As the book lays out well, our current system places the responsibility of advancement on the individual's ability to work. Job training and cash payments such as the EITC are based on working and less on the income gap between what one needs to survive and what one currently is earning. While the author does imply this may not be the correct method, the exposition is not heavy handed. The reader is left to ponder the question and no doubt there are arguments for both methods. Most economists would acknowledge the disincentives created by early welfare programs. This book, importantly, asks the question of how we balance the disincentives of traditional welfare programs with the uncertainty of the current workfare system. The author notes the particularly poor timing of the shift to the workfare model as the stability of the labor market became more tenuous. This book is an excellent contribution to the literature and understanding of the American welfare/workfare state.
