Tattered Safety Net
January 12, 2017
ANN ARBOR – If there’s ever been a scandal that has gotten too little publicity, this one is it: For at least two years, the State of Michigan wrongly charged thousands, many of them desperately poor, with unemployment fraud.
The government seized assets, garnished wages, made lives hell. Finally, last week, the state admitted that thanks to an automated computer program, the Michigan Unemployment Agency had falsely accused as many as 20,000 people.
The state faces lawsuits, and is in the process of issuing millions in refunds, though in many cases, those owed money may not be easy to find; poor people tend to be a transient population. All this came as no surprise to Luke Shaefer, however. A 38-year-old associate professor in both the University of Michigan’s School of Social Work and the Gerald R. Ford School of Public Policy, he’s spent years studying poverty.
“The victims of this whole thing are working people who fell on hard times,” he told me. “Some are dealing with poverty. Some are trying to get back on their feet after finding another job. And the state comes in and erroneously claims they are frauds, and owe back thousands of dollars.”
What may be both astonishing and telling is how long it took the state to act – and the mildness of the response.
Sharon Moffett-Massey, who had led the Unemployment Insurance Agency, wasn’t fired, but was only “reassigned,” after an internal review revealed that a staggering 93 percent of those charged with fraud actually were innocent.
The governor himself blandly told a newspaper “It’s not a good thing. The system didn’t work well.”
Later, an aide characterized what had happened as a “customer service” problem.
That may not be the term someone would use who had gone hungry because the state improperly seized their assets.
“Here is how that worked,” Shaefer told me. “Say you owed $3,000. You have to pay that back, but a penalty that is four times that amount. Plus interest, compounded.”
The devastation that has done to the working poor may never be fully known. But there are also millions of poor in America who are far worse off – and nearly invisible.
Luke Shaefer wants us to realize they are there. He is the co-author of a compelling short book. “$2.00 a Day: Living on Almost Nothing in America.” (Mariner Books, 2016.)
The book, which he wrote with Kathryn Edin, a distinguished professor of sociology and public health at Johns Hopkins University, looks at those who have fallen through the cracks in America’s increasingly tattered safety net.
There are, he estimates, three to four million people living on less than that amount a day, including a million children. The book is built around several families in that category who the authors each took the time to get to know.
These aren’t people who abused drugs or engaged in self-destructive behavior. Some of them had too many babies too soon. But virtually all want to work.
However, our society often makes self-sustaining work close to impossible. One of the women in the book was a model worker at Walmart, but was fired when one day transportation problems meant she was unable to get to work.
Others had similar hard-luck stories. The landmark welfare reform bill passed by Congress in 1996 had some benefits for the working poor, but was disastrous for others.
For those who are temporarily or permanently legitimately unable to work, it has been disastrous.
“What we found is that nearly all the poor want to work – but they also need some cash in their pockets – the conservative economist Milton Friedman talked about the liberating power of cash,” Shaefer said. But these days, many states have phased out cash assistance. So people do what they can.
They sell some of their food stamps for half their values; sell their plasma, occasionally, their bodies.
And their families sometimes go hungry. That bothers Shaefer, whose family owned a hardware store in Ypsilanti for decades. He isn’t wealthy; his wife is an Episcopal priest in a small parish, and they have two young children. But he sees an increasing number of children who will never have the chances his kids do.
His research indicates the best way of fighting poverty might be a combination of subsidized jobs, plus programs that make it easier for the poor to keep working if they have a transportation or child care crisis.
That, plus what most other industrial countries have — some form of child care allowance for new mothers, for whom a conventional job may not make economic or social sense.
And if the private sector can’t provide enough jobs, his book concludes “one could make a strong argument that government itself ought to create jobs like those provided by the Works Progress Administration during the New Deal.” Many of those jobs were, indeed much more meaningful and valuable than mythology has labeled them.
Luke Shaefer is a realist; he realizes there’s not a lot of sentiment for helping the poor today, and perhaps even less on the part of the incoming Trump administration.
But he intends to keep trying. Last fall, the University of Michigan put him in charge of Poverty Solutions, a new initiative to study the causes and consequences of poverty.
“Our research will be connected to the real world,” he said. More than half a century ago, President Lyndon Johnson came to the U of M to launch his War on Poverty.
That was, at best, a limited success.
But sometimes, rising tides do lift all boats. And there are clear indications that if today’s efforts can do something to make lives better for the poor, everyone will be much better off.
is the head of journalism at Wayne State University, serves as Michigan Radio’s senior political analyst and writes regularly for several publications. He also serves as The Toledo Blade’s writing coach and ombudsman and is host of the weekly television show Deadline Now on WGTE-TV in Toledo.