Message from Wisconsin: nirvana is a job in a fast food joint

Welfare to work

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"Think how a former welfare mother feels the first time she buys a pair of shoes for her child out of her very own pay cheque. How her chest swells with pride! Well, I want to bottle that feeling and make it Wisconsin's greatest export!"

In his lakeside mansion, Governor Tommy Thompson is addressing a delegation of Europeans invited to hear the Wisconsin Gospel, and to take it home bottled like the waters of the Jordan. Indeed, in the 12 years since he was elected on a ferocious anti-welfare campaign against benefit scroungers and layabouts, Wisconsin has exported to most of the western world some form of its workfare experiments. Our own welfare-to-work programme, starting next April, was born right here. Five delegations of British Labour politicians have already been through here, for this is a well-trodden welfare nature trail.

The American way of welfare reform comes wrapped in rapturous language, ecstatic, hyperbolic and often lachrymose. Governor Thompson's anecdotes of welfare souls saved are bringing tears to his eyes. For this is about the remoralisation of society and the reawakening of the American dream for those deprived of it by debilitating welfare handouts. Reform exponents talk with revivalist fervour of the life-changing, spiritual dynamic of tough love. We Europeans look a bit queasy at all this born-again irony- free stuff: they are talking, after all, about a job at Wendy's, not earthly paradise.

Does it work? That is the only question. The Governor gives figures showing that Wisconsin's workfare has cut numbers on benefit by 70 per cent in 10 years. It is these figures that made the US government rush to legislate what is billed as the End of Welfare. Their draconian new law came into effect last month, unthinkably ferocious to European ears. It removes all legal entitlement to welfare from now on, leaving it up to each state. Everyone has to work for benefits, even mothers with three-month-old babies. Any babies born to welfare families get no extra money. Most alarming of all, nobody can draw welfare for more than five years over a lifetime. Last month that clock started ticking and the message is being blazoned from one end of America to the other - welfare is over, get a job or die.

The rest of the Western world is watching aghast yet fascinated. Most, like the British, are experimenting gingerly with some of this, but none so drastic. So in five years' time, when the time limit is reached, will there be starving, barefoot children dying on the streets of the world's richest country? Will crime soar? What of recessions? Is this finally the end of any social contract between the haves and have-nots in America?

Well, no, probably not. All is not quite what it seems. For when it comes to the crunch, the Right talks a big game on welfare, but faced with the complex realities they too realise that you cannot let families starve and hope to be re-elected in the modern world. Voters want something done about welfare, but they don't want dead baby headlines. So when you ask right-wingers what will happen in five years' time, they whisper behind their hands that if necessary the law will probably change again. Five years is a long time in politics and welfare legislation is always in a state of revolution as successive governments each try to do the impossible - get all the able-bodied into work while ensuring protection for all the genuinely helpless.

They say the rhetoric is what matters. If you shout loud that there is no more welfare, then people hurry out and get themselves jobs. Many did just that when the law was passed, long before it was implemented. That happened in Britain when the tougher Job Seekers' Allowance was announced, long before it came into force. "They have to believe you mean it," said one adviser. "They got jobs to save up their precious five-year entitlement."

However, this programme is fantastically expensive - probably 60 per cent more than the simple benefit system it replaced. After all, our own very limited welfare-to-work scheme costs pounds 3.5bn just for 18- to 25-year- olds. First there is the childcare bill: if you force single mothers to work, you have to guarantee child care. At even greater cost, Wisconsin has guaranteed free health care to all the low-paid, and help with transport, even buying them second-hand cars to get to a job.

That is why the Democrats supported it. Secretly, it is the greatest expansion in welfare since the New Deal. Until now, welfare payments had been cut well below the poverty line with no chance of political support for anything but more cuts in the future. Now, under cloak of the remoralising of the poor by making them work, vast sums have been channelled into helping them. Most welfare families are paid more since the flat rate paid to all assumes three children per family, while most have only one or two.

Hidden in the small print there are all kinds of secret softenings. For example, each state can exempt 20 per cent of welfare recipients from the five-year time limit. So areas of intractable unemployment can still protect what will probably be enough people. As for forcing women with tiny babies to work, the Wisconsin scheme conveniently has a nine-month waiting list for infant childcare, and is quite happy to keep it that way.

The more detail was revealed, the more amazed I was by the mismatch between rhetoric and reality. The rhetoric is savage, but that's political cover for one of the most expensive attempts at lifting people out of poverty there has ever been. The curious coalition between right and left on welfare reform is because the right won the language, but the left won the money. What exactly will happen in the next recession nobody knows, but for now, the money flows as more people flow back into work.

What lessons for the UK? What everyone wants to know is how many are taken off welfare for ever for every buck spent? That, I suspect, we shall never know. In the past 10 years Wisconsin's economy has boomed as never before, untouched by recession. Many of those who have left welfare would have done so anyway. But nobody knows how many. There is no doubt that many once completely unemployable people have been "saved": semi-literate lone parents who had never ventured more than a few blocks from their home, with no idea how to read a map or bus timetable, have had their lives transformed by being taught these skills. In the end it is these inspirational anecdotes that keep the voters happy, for lack of hard data.

Do you need to sound as draconian as the new US law? We shall have some idea when our own New Deal for Lone Parents has been running for a few years as a voluntary scheme - but without universal child care it won't be a fair comparison. Will the rest of Europe follow the American model? The chances are we will, cautiously, little by little. We will not dare be as tough, nor will we dare spend as much. As for results, every country changes its systems so fast and so often, while their economies fluctuate, that true evaluation will never be possible. But most experts now think that almost whatever you do to give individual personal attention to the poor has good results.

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