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The dialectics of privatization and advocacy in New York City's workfare state.


WITH THE RECENT PASSAGE OF WELFARE REFORMS IN 2006 AS A LITTLE-DISCUSSED element of a federal budget bill, welfare policy in the United States has moved ever closer to universal workfare. (1) Even before the more sweeping reforms of 1996, Bob Jessop described an emerging "workfare regime" that was replacing the welfare state in the industrialized democracies. The latter's logic of protecting citizens from the fortunes of the market was being supplanted by its opposite. This new regime emphasizes: (1) flexibility for enterprise; (2) geographic re-scaling of economic and social intervention; (3) replacement of entitlements with obligations on the part of citizens; and (4) coalitional power-holding spanning governmental, civil-society, and profit-motivated actors (Jessop, 1994; see also Jessop, 2003; Peck, 2002).

In this article, I explore the expansion of workfare programs in New York City and concentrate on the relationship of coalitional power to the form and content of opposition to workfare. From 1995 to 1998, New York City's program requiring welfare recipients to work as a condition of receiving benefits began a fourfold expansion (New York City Office of the Mayor, 1997, 1998, 1999), while welfare rolls contracted by nearly half. Workfare assignments in the city's Work Experience Program (WEP) created enormous disincentives to remain on welfare, and created more opportunities for the state to sanction-- or cut off--welfare recipients' grants. Stricter eligibility procedures and "hassle" (Mead, 2004) designed to get applicants to give up their efforts to sign up for relief also contributed to a sharp decline in the rolls. I attend most carefully to the dynamics by which the changes in welfare were put into play; the creation of an organized opposition to workfare; and the creation of a discourse among the opposition that highlighted WEP's shortcomings.

In the wake of its fiscal crisis in the 1970s, New York City developed what Jessop calls a "neocorporatist" rather than a fully "neoliberal" politics, i.e., one based, at least for social provision, on partnerships between the state and nonprofit social service providers. Many of these service providers had roots in urban movements in the 1960s and 1970s. Yet, as DeFilippis (2003) suggests, many of these groups, which devoted their energies to housing rehabilitation and tenant organizing, became co-opted as specialized conduits for housing redevelopment and low-income housing management. As a result, many abandoned their roles as agitators for broader change. By the early 1990s, however, at the peak of a second fiscal crisis under the mayoral administration of David N. Dinkins (1990-1993), several of these organizations were actively exploring ways of re-infusing organizing into their development work (Krinsky and Hovde, 1996). When Mayor Rudolph W. Giuliani (1994-2001) aggressively reneged on the neocorporatist recognition of community-based organizations in providing social services, some of the more progressive housing groups worked to oppose workfare with organizations that had recently faced similar dilemmas in service politics with respect to the city's homelessness crisis.

In spite of its apparent global hegemony, neoliberalism is not the same everywhere; wherever neoliberal governance is tried, its "roll-back" moment--i.e., the point at which it uproots the existing social policy infrastructure--generates specific sorts of opposition depending upon the existing configuration of, and division of labor in, the state and civil society groups. Specifically, this helps to highlight the dialectics of privatization and advocacy in New York. In New York City, the initial imposition of neoliberalism ended in at least a partial neocorporatist bargain. Yet the coalitional pressures created by New York's neocorporatism failed to contain politically the push for greater flexibility by the city's financial elite, and this, in turn, created a progressive-corporatist reaction in the 1990s. This reaction itself became cast--for reasons elaborated below--largely in terms of human capital theory. As criticism of workfare's failure to provide adequate education and training became a dominant discursive strategy among regime opponents, their political claims grew ever closer to the foundational, individualist ideas of neoliberal theory, even as they became a critique of the theory-in-practice. Put differently, workfare's opponents embraced demands for education and training even though they focus on "deficiencies" in the labor supply (and their constituents), rather than on the conditions and compensation of work.

How can we unpack these dialectics? First, it is important to focus on organizational and discursive dynamics separately. Second, it is important to take a longer-term, historical approach to the economic and social regulatory projects of elite and non-elite coalitions. Third, it is important to understand that the threats that dominant governance structures pose to various groups can sometimes mobilize them into opposition. This opposition can reform dominant structures, but it can also be disorganized and co-opted (Lieberman, 2002; see also Reese, Giedraitis, and Vega, 2005). Moreover, though this opposition can sometimes make its political claims in an idiom consistent with the claims of dominant groups, doing so may lay bare the basic contradictions at the heart of governing self-justifications. Below I will expand on these themes through a historical narrative of neoliberalism in New York City, which focuses on the imposition of workfare in the 1990s and the opposition it inspired. I then proceed to a finer-grained analysis of the channeling of this opposition's claims into human-capital arguments. I will conclude by suggesting broader lessons that opponents of neoliberalism can draw from the dialectics of governance and challenge.

The Formation of New York City's Workfare Regime

New York City's fiscal crisis (1975-1977) was a watershed moment in the history of neoliberalism. It transformed abstract ideas about laissez-faire capitalist management into an array of governance practices. For proponents of neoliberalism in the presidential administration of Gerald Ford and among New York City's financial elite, the municipal balance-of-payments crisis was a window of opportunity to impose privatization and austerity. Adapted from the restructuring imposed on Chile following the 1973 coup, these became models for urban policy under Ronald Reagan and for "structural adjustment" policies of the International Monetary Fund and World Bank (Freeman, 2000; Harvey, 2005; Sites, 2003; Tabb, 1982).

William Sites (2003) argues persuasively that these policies were not simply forced on the city by the larger processes of economic rescaling known by the shorthand of "globalization." Certainly, the relocation of much of New York City's manufacturing tax base to lower-labor-cost sites had unfolded rapidly over the previous decade. Nevertheless, the city's real estate developers and bankers encouraged industrial flight in anticipation of non-industrial rents, rather than create incentives for industrial retention (Sites, 2003; Fitch, 1993). This, and the economic crises facing developing countries mired in debt and crippled by the 1973 Oil Crisis, combined to press Wall Street investment houses to call in municipal public debt before cracking down on real estate moguls and strategically important Third World governments. Gambling that New York would not default on loans it had taken to cover operating rather than capital expenditures (which investment banks had willingly sold as good debt), the bankers forced the local social-democratic regime into submission. Municipal unions that just a decade earlier had won the right to collectively bargain with the city were forced to accept layoffs, lest their contracts be cancelled by the undemocratic public-private financial control board that the bankers insisted have veto power over the city's fiscal decisions as a condition of reopening debt markets. The Ford administration was goaded by its Treasury Secretary, William Simon, Jr., a key neoliberal, first to deny federal loan guarantees to the city, and then to provide them on terms "so punitive, the overall experience made so painful, that no city, no political subdivision would ever be tempted to go down the same road" of funding services in as generous a way as New York City had for the previous quarter century (quoted in Freeman, 2000: 259).

There are differing views on why neoliberal austerity was imposed: it was a reassertion of class power, as David Harvey (2005) has suggested; an attempt to manage risk in the midst of a crisis of accumulation, as regulation theorists would understand it (e.g., Aglietta, 1979); or a second-order reaction to crises that emerged from earlier attempts at crisis management by the state, such as the Great Society or even the New Deal, as an extension of Jones and Ward's work on British municipal restructuring (2002) might suggest. Nonetheless, the effects were significant for what the policies achieved and for what they did not.

For one thing, the continued loss of middle-income jobs was compounded by the layoff of more than 20,000 city workers. Growing poverty and the resultant cuts in city services, including fire protection, found their sequelae in accelerated housing abandonment, increased job loss, and, by the end of the decade, in the appearance of significant amounts of homelessness. This, in turn, created new grievances, and many neighborhood and political activists active at the beginning of the decade for larger projects of social transformation--sometimes abetted by residual Great Society program funds, but more frequently not--turned their energies inward, to limit the damage of the widespread landlord disinvestment, abandonment, and arson in their neighborhoods. By the time the city's finances had stabilized in the early 1980s, scores of neighborhood-based tenant-organizing groups, low-income housing cooperatives, and nonprofit developers had formed to combat blight, and, increasingly, to direct reinvestment in ways that were not geared simply to gentrification.

These groups challenged the city's governing priorities and adapted to them. Many tenant organizing groups, having fought to get the city to force their delinquent landlords to make repairs, found themselves managing their buildings when the city took them into tax foreclosure. Other groups, including squatters, sought to gain title to their otherwise abandoned housing. As early as 1977--even before the end of the fiscal crisis--these activists succeeded in wresting funds from the city to renovate dilapidated housing and stem some of the decline that municipal cutbacks had otherwise hastened (Turetsky, 1993).

As Sites (2003) and DeFilippis (2003) point out, the groups that pushed back against public and private disinvestment and abandonment, and many that advocated for, and provided stopgap relief to, homeless people, often became co-opted into a broader governance coalition as junior partners, and as private contractors. One longtime activist lamented that the increasingly business-savvy, development-minded, and managerial community organizations had lost their political spark, and were "managing the crisis" rather than challenging it (DeRienzo, 1994; see also Turetsky, 1993). (2) The same, it can be argued, was true for the principal municipal workers' unions. While they were kept in check under the 12-year administration of Mayor Edward I. Koch (which also implemented a workfare program in the 1980s) by expanded hiring when the fiscal crisis subsided, they were never in a position to challenge the city's larger spending priorities. This is at least in part because the widely accepted story of the fiscal crisis in financial and government circles was that the city had resorted to borrowing in the 1970s to meet the demands of expanded welfare roils, and especially rising labor costs due to recent unionization.

Peck and Tickell (2002; see also Brenner and Theodore, 2002) have argued that neoliberal policy is marked by "roll-back" and "roll-out" phases. The former involves what Sites (2003) has called "primitive globalization," or the disembedding of existing economic relations from social relations to re-regulate both on a new basis. In this sense, the period between the fiscal crises of the 1970s and 1990s was a 15-year roll-back period. The city's creditors and the raters of municipal debt forced David Dinkins, who had campaigned against the inequities of Koch's neoliberalizing agenda, into the largest public-sector layoffs since the 1970s. He lost the support of the municipal unions, and thus, narrowly, his reelection bid against Rudolph W. Giuliani. Giuliani's election as mayor marked the beginning of a roll-out phase of neoliberalism in New York City.

Challenging Workfare: To Worksites and Beyond

Mayor Giuliani appointed the same adviser to supervise the city's welfare reform and privatization efforts. By 1995, the city reached a deal with District Council 37 (DC 37), the main municipal workers' union, to expand workfare in municipal workplaces. (3) With a weak economy and a glut of low-wage workers in the secondary labor market, the city did not feel private-sector pressure to depress wages (Peck, 1999). (4) If anything, the city parlayed its ability to save money on public-sector wages by placing workfare workers in jobs previously done by unionized municipal workers, using a welfare funding formula whereby the city paid only one-quarter of the benefits, and saving an average of two billion dollars per year over the first seven years through the deterrent effects of workfare on the welfare rolls (MacDonald, 2003). (5) Perhaps as important as this "windfall" (Uchitelle, 1997, cited in Chang, 2000: 163) was the city's ability to convince bond raters that it had mastered the twin fiscal-crisis-era bugaboos of entitlements and labor costs (e.g., New York City Mayor's Press Office, 1997; Kruger, 1997; Standard and Poor's, 1998; see also Hackworth, 2002; Sinclair, 2005).

For workfare workers, the situation was onerous. Hours worked for welfare benefits, which generally yielded less than $20 a day, often detracted from the time needed for family care and earnings to "make ends meet" in the informal economy (Edin and Lein, 1997). Welfare recipients' economic uncertainty led to rent payment problems. This, and the fact that several workfare workers approached staff in their nonprofit housing groups, led several groups to consider new organizing to roll back workfare.

Undertaking the initial oppositional organizing against WEP were housing and homelessness groups that had struggled over the past decade against the strains of the increasingly technocratic and decreasingly participatory politics of "community organizations." Two principal groups engaged in oppositional work, the Fifth Avenue Committee (FAC) and ACORN. They had experimented with models of community-controlled, nonprofit housing that specifically incorporated a tenant-organizing component. To them, the expansion of WEP was clearly threatening, but it also ended all pretenses of a collaborative effort between the city and community groups. Neocorporatism was dead.

In early 1996, FAC joined two other groups whose organizing projects centered on homelessness and hunger advocacy outfits, the Urban Justice Center Organizing Project (UJC) and Community Voices Heard (CVH), to form WEP Workers Together (WWT). (6) Both WWT and ACORN began to organize WEP workers to oppose the program. They did so at worksites, in part because they thought that despite the structural powerlessness of WEP workers, municipal workers' unions might be important allies. Their members' jobs--and organizational dues--were threatened by the introduction of nearly 40,000 welfare recipients who worked at minimum-wage rates, had few rights legally, and no right to collectively bargain (WEPWorkers Together, 1996; author interview with FAC staff, May 1997). Though some unions supported both efforts, neither could generate consistent opposition to the program from the cautious and corrupt DC 37 leadership.

Organizing at worksites entailed claims of similarity between workfare workers and regular workers. In fact, many WEP workers did the same or similar work to that done by regular, unionized workers. ACORN's organizing strategy during 1996 and 1997 mimicked that of a standard union campaign in the United States, beginning with card signing, the formation of an "organizing committee," and then submission of the cards to the government in hopes of gaining recognition and an election. Since a 1981 decision by the City's Office of Collective Bargaining (OCB) had already denied collective bargaining rights to workfare workers, ACORN's campaign was largely symbolic. The point was to mobilize union support around a public definition of WEP workers as workers whose rights as workers were being denied. (7)

Beyond the critical role played by DC 37's inconsistent criticism of WEP and its ongoing support for Mayor Giuliani in torpedoing a united union front against WEP, the pragmatics of worksite organizing were fraught with obstacles. The regular high turnover in welfare rolls--and thus at workfare worksites--was compounded by the flexibility with which WEP workers were deployed. Once organized, workers in a worksite organizing committee might be transferred to different worksites (author interview with CVH organizers, June 2001, July 2001). Thus, from the beginning, it was difficult for organizers to facilitate WEP workers' adoption of a "workerist" vocabulary for their wide range of complaints against the program. More fundamental perhaps was the fact that many WEP workers regarded their work as involuntary ("WEP Is Slavery," "Don't Treat Me Like a Slave," and other such slogans were common at demonstrations). WEP workers often thought of themselves as taking the place of regular workers, but they were less interested in improving their working conditions than they were in joining the ranks of "formally free" labor.

Chad Goldberg (2001) correctly identified the central representational problem of anti-WEP organizing in 1996 and 1997: Were WEP workers "workers" or "welfare recipients"? Yet, by mid-1997, this had begun to shift to the question of how to create jobs for WEP workers. As one critic of the worksite-organizing strategy put it in a 1997 interview: "I don't think that [representing WEP workers in a union-like manner] is going to do anything to end WEP. I think it's going to entrench WEP.... Does that do anything to create more jobs? I don't think it does. I mean, you're giving WEP roots" (author interview with Urban Justice Center staff, 1997). Another activist observed that his group had gained concessions, such as gloves for workfare workers in outdoor worksites, but WEP workers "didn't want gloves. They don't want better working conditions. They wanted a job and they wanted ... to get paid for the work that they wanted to do" (author interview with CVH staff, July 2001). Yet another noted that WEP workers "weren't working at jobs, and that's an absolutely key distinction. The lowest-paid service worker at some shit service-sector job is there voluntarily and might want to organize to improve the conditions, to get better pay, to be treated better, or leave voluntarily. So they're working, but if they're not there voluntarily, it's not a job" (author interview with FAC staff, May 1999).

Campaigns to create public jobs where WEP placements existed faced obstacles. The city reaped fiscal benefits from WEP and the creation of public jobs entailed greater costs. Moreover, the advocates' legislative ally, the City Council (which was considerably more liberal than the mayor), had little power to create jobs. Under the "strong mayor" system in New York City, the City Council can vote on the budget, but cannot tell agencies how they should be run or what they should do. Accordingly, the advocates arrived at the idea of creating a "program" rather than jobs. The program would create "transitional" jobs that lasted 18 months and included an education and training component. Introduced in 1997, the city legislation was passed in 1999. When testifying in support of the proposal, the National Employment Law Project (NELP) suggested that transitional jobs were meant to provide work and to bring WEP workers into the labor market in a stronger position than otherwise would be the case (Emsellem, 1999). Transitional job programs with education and training components recognized, they said, that post-workfare earning potential is no better, and is sometimes worse, than that of welfare recipients who have not been through workfare programs. Thus, the program would be good especially for the apparently growing percentage of welfare recipients who, in spite of a recovering economy, found themselves facing "multiple barriers to employment," including, among many other things, a lack of skills.

During these hearings, which a FAC-led coalition got introduced into the City Council, FAC's main organizer was careful to say that the bill was "not an alternative to WEP," but a stand-alone program that should be judged on its merits regardless of one's opinion of WEP (Dulchin, 1998). The program would provide jobs with all the rights of regular workers, but also have mandatory time for education and training activities.

Unsurprisingly, the Giuliani administration opposed the Transitional Jobs Program. It claimed success in placing welfare recipients into jobs by presumptively counting most exits from the welfare rolls as job-placements. However, it did not track job-retention or earnings; it only did so late, and with a small sample size, finding that over one-third of exits from the rolls had no work to speak of in the year following their exit from welfare. It also stuck by its long-held position that "a job is the best preparation" for work. With this and the image of entry-level positions leading, through firms' internal labor markets, to higher-paying jobs, the administration portrayed the Transitional Jobs Bill as public- and nonprofit-sector featherbedding by another name.

The administration's position against job-training relies on an idealization of labor markets that bears no resemblance to the kinds of labor markets into which WEP workers were likely to move (Maxwell, 1998; National Employment Law Project, 1999; Youdelman and Getsos, 2005). (8) Accordingly, its workfare program was geared precisely to the labor-disciplinary project of channeling welfare recipients into contingent labor markets that Peck and Theodore (2000) suggest. Yet FAC and the other pro-Transitional Jobs, anti-WEP activists engage a similarly ideologized version of labor markets in their embrace of the education and training component of their proposed program; it is also compatible with the individualizing tendencies of neoliberal policy. Although potentially important in individual cases, training for skills does not, by itself, lead to better placement into labor markets. Labor markets must be structured to have higher- and lower-skilled positions that reward skill. Moreover, skill is defined by the relative scarcity of specialized savoir-faire, kept scarce by closed networks of workers who control some part of the production process. Nothing within the transitional jobs framework suggested a significantly larger state role in labor market reform. (9)

Resort to the job-training default is precisely what Lafer (2004) might predict. In his detailed indictment of the politics of job training in the U.S., Lafer argues that job training has become a consensual program between Republicans and Democrats as the former have gained power. The national job training strategy, governed between 1982 and 1998 by the Job Training Partnership Act and since 1998 by the Workforce Investment Act, removed the federal government from the role of counter-cyclical public job creation. This role, dating back to the New Deal and, more recently, to the Comprehensive Employment and Training Act (CETA), helped to secure the Democrats' urban base, which had lost manufacturing employment during the 1960s and 1970s. (10) Reagan discontinued CETA and several grants-in-aid programs from the federal government to cities, which Nixon had already cut a decade earlier. Welfare reform was thus the apotheosis of a longer-term pattern of federal disinvestments from counter-cyclical relief and labor-market intervention. Out of power at the national level, the Democrats pushed for job training; though in a position to cut popular programs, the Republicans acceded to job training because it enabled them to develop new channels of patronage with large job-training providers, and because it made it appear that they were doing something about unemployment, while actually pulling out the supports for the unemployed that existed before. (11)

By 1995, the Giuliani administration would even forswear training. This led to a curious policy development in 2000: in response to the City Council's overriding of Mayor Giuliani's veto of the Transitional Jobs bill, the administration created the Parks Opportunity Program (POP), even as it challenged the Council's power to create the Transitional Jobs Program in court. (12) Like the transitional jobs program, POP hired welfare recipients into temporary jobs (running 11 and one-half months), with union designation, wages, benefits, and full employee status. In fact, wages under POP were higher than those proposed by the advocates. Unlike the Transitional Jobs Program, however, POP had no education and training component. What had happened?

First, the 1996 federal welfare law stipulated the five-year lifetime receipt of federal benefits. Accordingly, for a portion of welfare recipients in New York City, the federal government's share of welfare benefits was set to expire. Second, New York State has a constitutional provision--inserted during the Great Depression--that requires the state and its subdivisions to care for the poor. Thus, dropping welfare recipients from the rolls altogether, as was the case in other states, was unlikely. Third, the federal law enabled the diversion of welfare money to wage-subsidy programs. The city could, through POP, continue to draw down federal welfare funds, even while (1) showing that it could continue to reduce welfare rolls; (2) beat the advocates at their own job-creation game; (3) reap the benefits of welfare recipients' work without having to pay for it directly out of city coffers; and (4) do nothing to improve the eventual labor-market position of welfare recipients once their temporary jobs expired.

In the closing days of the Giuliani administration, proof of the last benefit came in its announcement that the contracts of POP workers whose terms of employment were over would be sold to a temporary job agency. If they wished to maintain a link to city assistance, they would have to take a pay cut of two dollars an hour, with the remainder going to the temp agency as payment. (13) Nevertheless, it is difficult to contemplate the creation of POP without either the years of advocacy for transitional jobs or the City Council's first veto against Mayor Giuliani on this issue.

Recovery and Re-situation: The Discourse of Training As Critique

The Giuliani administration's commitment to neoliberal restructuring suggests that neoliberal governance in practice--"really existing neoliberalism," as Brenner and Theodore (2002) call it--is not so much a principled "re-regulation" of the economy as something closer to a power grab, even if not all the participants recognize it as such (Harvey, 2005: 46). By 2000, the Giuliani administration used federal welfare-to-work money to restructure existing training and job-placement contracts to favor large firms, often with national scope. It also introduced for-profit firms previously excluded from New York City's social service regime, even though it was substantially privatized, and moved to performance-based contracting--an imposition of "market mechanisms" of accountability--that favored larger firms over smaller, community-based ones. This undercut direct recognition of smaller nonprofit service providers by the local state; if such providers retained their contracts at all, this put them in a subcontracting, subordinate relationship to larger intermediaries (e.g., Sanger, 2003; Barnow and Trutko, 2004; Reese, Giedraitis, and Vega, 2005). (14) Moreover, as Youdelman and Getsos (2005) found, the criteria for paying the new "Employment Service Providers" (ESPs) focused largely on job placement and retention. This led ESPs to promote quick labor-force attachment by welfare recipients and to ignore their aspirations for greater training or education.

Further, the Giuliani administration placed responsibility for job training programs in the Human Resources Administration, the agency in charge of welfare. There, amid ideologically driven administrators who expressly did not believe in job training, but rather in the rapid labor-force attachment of "work-first" programs, millions of federal dollars languished unspent for years. That the Giuliani administration broke the consensus on job training, even when this consensus ill-served those interested in seriously addressing unemployment, made it possible to use the discourse of training and human-capital development against a neoliberal policy regime with which it was otherwise largely consistent.

The best example of this is the formation of the Coalition for Access to Training and Education (CATE) in 2001. CATE sought City Council legislation that would allow education and training activities to count toward the federally mandated (but quite flexible, according to state and local law) work requirements under the 1996 welfare reform act. CATE brought together a broad range of groups that had been actively involved in fighting WEP since 1996. One of the lead groups was Families United for Racial and Economic Equality (FUREE), which was born from a reorganization in 2000 of the remainder of WEP Workers Together, by then under the sole auspices of the Fifth Avenue Committee. ACORN and CVH also took leading roles, as did the Welfare Rights Initiative (WRI), a group of college students on welfare who, since WEP's expansion in 1995, had argued partially on feminist grounds that workfare rules should be made compatible with recipients' efforts to gain higher education.

FUREE members reacted against the growing tendency to place welfare recipients in "three-plus-two" classes (three days of WEP and two days of Adult Basic Education and English for Speakers of Other Languages). They found that they were "learning nothing" in their classes, in part because ESOL pedagogy cannot be squared with a two-days-per-week engagement (Compass for Change, 2005; author interview with FUREE staff, July 2003). WRI frequently cited a study that found that 88% of women on welfare who received a bachelor's degree permanently move out of poverty (Lane, 2005; see also Gittell, 1990) to argue for greater access to education, especially in light of the hemorrhage of welfare-reliant college students from the City University in the wake of WEP's expansion. Though most welfare recipients were never enrolled in college--and had often left high school without a diploma--WRI's broader appeal is to the idea that welfare recipients should be treated by the state according to their individual needs and circumstances, as suggested by the juridical and administrative conceits of casework and eligibility determination. Indeed, ACORN and CVH had joined and helped to recruit plaintiffs for a 1996 lawsuit to require the city to do individual assessments of welfare recipients--as already required by law--rather than dump all recipients willy-nilly into WEE Though the Bloomberg administration finally settled the suit, Davila v. Giuliani, in 2003, (15) the CATE legislation suffered the same fate as the Transitional Jobs Program: passed by the City Council, the mayor vetoed it, but was subsequently overridden by the Council. The state court, using the previous litigation on Transitional Jobs as a basis, ruled in favor of the Bloomberg administration on the grounds of "curtailment and preemption" of mayoral power (New York City Law Department, 2004).

Unlike his predecessor, Mayor Bloomberg did not claim that education and training were unimportant. CATE was not victimized by the neoliberal animus toward education and training for welfare recipients as a "dead end" that takes potential workers out of the labor market. Instead, it was a victim of a city charter designed to centralize managerial authority and blunt the power of popular movements with respect to policy making. Thus, it was a spillover from longer-term processes of governance change that exerted centrifugal force on what might have otherwise forced the realignment of policy around the importance of training.

Since the city's substantial disengagement from the poor had already been meticulously prepared, the Bloomberg administration was not compelled to strongly oppose a thoroughgoing overhaul of workfare. Bloomberg did eventually rescue the unspent Workforce Investment Act funds that Giuliani's inaction put at risk of federal repossession, but the basic outlines of WEP remain and the welfare-to-work system rewards rapid labor-force attachment over any sort of developmental vision. Moreover, due to the utter failure of the current system to respond to the publicly claimed aspirations of organized groups of poor people for an employment-based system that would reduce poverty, demands for education and training function as a critique of really existing neoliberal policy. This is true despite and because of the rhetoric of human capital, which locates surpluses and deficits in human capital as a property of the individual--and, by extension, the needs of welfare recipients as matters of individual morality, compliance, etc.--but in practice treats labor and poor people as abstractions.

Conclusion: The Dialectics of Advocacy

To understand the sometimes-counterintuitive ways in which anti-neoliberal political claims are crafted and positioned, it is important to locate activism in longer-term historical processes. In this article, the expansion of workfare as a key part of Mayor Giuliani's neoliberal offensive is embedded in a historical account of the oft-noted imposition of neoliberalism on New York City during its 1975 to 1977 fiscal crisis. I argue that this imposition was incomplete, and resulted in the formation of a nonprofit, privatized, neocorporatist coalition. This coalition channeled and contained popular tenant, homeless, and housing protests, leading their organizations to become front-line social service and infrastructure providers and developers, and the first line of defense against the complete immiseration of the poor. For some of these groups, the contradiction between their founding ethos and their developing role became acute enough that when Mayor Dinkins, who was supposed to be the hope of the city's downtrodden in the wake of the neoliberalizing Koch administration, was instead forced to make deep cuts in social services and city staff, they were primed to begin reorganizing their base of support. When Rudolph Giuliani aggressively broke apart the neocorporatist coalition, with the expansion of workfare as his signal social policy innovation, these groups formed the backbone of a sustained, 10-year opposition to the program.

If the neocorporatist coalition merely contained the fundamental opposition between a neoliberalizing elite and local poor and working-class people and those who represented or served them (itself a tension-fraught set of relationships), its sundering produced a clearer set of oppositions. Yet this clarity was undermined by the difficulty anti-workfare activists encountered in fashioning a workable organizing identity for welfare recipients subject to the new workfare rules. Over the course of 18 months, they pitched a strategy of securing workers' rights, but the pragmatics of organizing union-like structures among WEP workers were exceedingly difficult. In CATE, the opposition converged on the language of claims for education and training, that is, of enhancing the human capital of welfare recipients so as to secure their long-term prospects of escaping poverty.

This led to a series of contradictions. On one hand, the rhetoric of human capital is consistent with neoliberal theory of labor pricing, whereby workers are paid what they deserve based on the value they add to the labor process. On the other hand, really existing neoliberalism is unmanageable at the local level unless welfare recipients and workfare workers are treated as abstractions--as mere labor power, or as a class. In this context, claims for education and training function as a critique of neoliberal policy. This critique has some potency because it trades on the dominant human capital myth and shows neoliberal policy to be inconsistent with its own individualism. Yet it is also limited since it largely fails to acknowledge the centrality of organized class power at the heart of contemporary urban and social welfare politics.

In this brief study, I have sought to indicate the importance of dialectical analysis in probing the possibilities and limitations of contemporary urban movements. I also hope to have shown that the appearance of dialectical oppositions is not a necessary product of all policy or state- or elite-movement interactions. Rather, they appear through the course of these interactions, wherein challengers and authorities appropriate and elaborate each other's claims in order to dispute them. Neoliberals disavowed training to undercut the neocorporatist infrastructure. This infrastructure supported a welfare program that, however ineffectively it provided jobs, at least gave some institutional recognition to the opponents of neoliberalism and some possibility of shelter for the poor from the storms of contingent labor markets. Similarly, the embrace by workfare's opponents of human capital theory is at least partly due to their inability to gain institutional and symbolic footing in a language and practice of labor rights. Each side defined itself, during the mid-to-late 1990s, through a shared language of labor and human capital. Throughout this contentious conversation, each takes a rhetorical position that, in the abstract, ought to undermine its political position, but which in concrete political conflict does not.

Students and opponents of neoliberalism understand that it cannot be imposed without resistance. Such resistance can change the character of neoliberal politics and bend it, at least for a while, toward another (by some lights, still suboptimal) formation, such as a neocorporatist one. As this study of workfare and privatization has shown, oppositional demands may reinforce and challenge the terms upon which neoliberalizing elites implement policy. These challenges and demands flow from longer histories of neoliberal policymaking, and the relations between the state and civil society organizations it shapes. This unfolding dialectic can turn even relatively anodyne claims against neoliberalism into strong challenges to its practice.


(1.) See s. 1932, The Deficit Reduction Act of 2005.

(2.) Banana Kelly, an organization DeRienzo helped to build in the late 1970s in the South Bronx, was a model of participatory neighborhood politics. By the 1990s, however, it had grown to the point that many in the neighborhood called it "the agency," suggesting how far it had grown away from its grass roots. Residents of housing managed by the Brooklyn chapter of ACORN--the Association of Community Organizations for Reform Now--even demonstrated at the house of its executive director in 1995, laying bare how deep the tensions created by the dual role of organizer and manager could become. See also Krinsky and Hovde (1996).

(3.) The union negotiated side agreements to its five-year contract, which provided raises for union workers charged with supervising WEP workers. The contract was opposed by a majority in the union, due to objections by hospital workers exempted from a no-layoff clause in anticipation of privatization plans. The contract nevertheless passed by a fraudulent vote in 1996. The emerging evidence of this fraud and of millions of dollars in graft--often conducted by Mayor Giuliani's closest allies in the union--led to a wide-ranging corruption scandal that swept out the old union leadership in a tumultuous six months in 1998 and 1999.

(4.) Peck argues that, all else being equal, labor markets with high unemployment will generate public-sector workfare programs and vice versa.

(5.) Calculating precise savings from WEP and welfare reform is a difficult task, but it is clear that WEP saved hundreds of millions of dollars in labor costs alone. See, e.g., New York City Independent Budget Office (2000; 2002: 1) and Besharov and Germanis (2004).

(6.) In 1995, CVH spun off a statewide anti-hunger advocacy group as a poor-people's membership organization, in part to counter the absence of organized poor people's voices in the welfare reform debates. UJC began an organizing project for much the same reason. The women in the organizing project elected to prioritize workfare as an organizing issue.

(7.) Tait (2005, esp. Chapters 3 and 6) provides historical insight into earlier anti-workfare campaigns in New York City, tensions between DC 37 and welfare rights organizers, and the 1981 OCB ruling.

(8.) One of the first studies (Maxwell, 1998) showed that two-thirds of welfare recipients had had some employment over the year after they left welfare. A far smaller minority worked the entire year, and the report did not count those who left welfare but returned after a short period (National Employment Law Project, 1999). More recently, Youdelman and Getsos (2005) found that since 1999, when the city began a "work-first" model of welfare reform, stressing private labor-market work over public work, its employment service providers--private groups contracted by the city--have had little success in placing welfare recipients in jobs, tracking them, and having them retain the jobs. Based on a three-month average sampled from 2004 data, only 35% of the eight percent of welfare recipients in the system who are placed in jobs within six months retain those jobs six months later. Thirty-six percent are unaccounted for, and 29% return to welfare. The consistency of these numbers strongly suggests the presence of labor markets that accommodate this sort of work pattern.

(9.) Of course, FAC realized this, as did many others. As an adjunct to its Transitional Jobs Program advocacy, it also began a coalition called the Alliance for a Working Economy, which advocated "high road" and "sectoral" approaches to job development in New York City, i.e., job development that incorporated internal labor market models, rather than segmented labor market models.

(10.) Rose (1995) notes that beyond these political effects, these programs accorded dignity and relatively higher pay to their beneficiaries. They were voluntary programs, and tended to be geared toward male employment. Nevertheless, writing in advance of the 1996 federal welfare reforms, Rose makes a strong case for similar programs instead of mandatory workfare.

(11.) On a larger canvas, Daniel Cohn (1997) argues that neoliberal policy choices that adapt business practices to governance, and in so doing seek to depoliticize governing, result from a compromise between neoliberals and political liberals. He argues that Thatcher and Reagan's hard neoliberalism could not be put into practice because of the popularity of many state programs, and that "New Public Management" is the result of political liberals who have agreed to "do more with less" in exchange for keeping residual functions of the state intact.

(12.) The Giuliani administration eventually won the case, with the state court ruling that the Council could not curtail the mayor's power to administer mayoral agencies as he saw fit.

(13.) The POP saga continued as advocates, including CVH, successfully joined with the union representing POP workers to defeat this plan when Mayor Bloomberg replaced Mayor Giuliani. Two years later, the Bloomberg administration substantially scaled back the program and took it out of the collective bargaining unit, as the union local representing POP workers and DC 37 (of which it was part) disagreed about whether to retain collective bargaining rights in exchange for a pay cut of 50 cents per hour. DC 37 refused to negotiate the cut, so the Bloomberg administration eliminated the program.

(14.) Reese et al. (2004) recount this in the context of Maximus, a for-profit contractor with one of the largest national profiles in the business. Maximus developed close relationships with government officials in several cities, and was at the center of controversies in New York and Milwaukee over corruption and favoritism in the contracting process. The ways in which smaller employment agencies were organized into trade associations with larger ones, they find, made it difficult for them to fight this change. For them, the issue was not privatization per se, but the turn toward larger and for-profit outfits.

(15.) The settlement required the city to inform welfare recipients of their education and training options; to make lists of approved education and training programs available; and to work with recipients on a case-by-case basis to decide on the eligibility of programs not previously approved by the city.


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John KRINSKY teaches political science at the City College of New York (e-mail: jkrinsky@ccny.cuny. edu). A political and cultural sociologist, he is the author of Free Labor: Workfare and the Contested Language of Neoliberalism (forthcoming) and of several articles on the struggles against workfare in the 1990s and 2000s. He has worked as a housing advocate and homeless organizer, and is interested primarily in how poor people's political claims shape, and are shaped by, the contexts of struggle.
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Date:Sep 22, 2006
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