Analysis Race

Debt Enforcement Policy Harms Employment Prospects for the Poor

Sheila Bapat

Along with the enactment of welfare reform 17 years ago this August came tougher practices in debt enforcement—which, in many cases, lands the poor behind bars, leads to suspensions in drivers' licenses, and other practices that make finding work much harder.

The purported objective of Clinton-era welfare reform was to end poor people’s dependence on government benefits and encourage them to find work. But along with the enactment of welfare reform 17 years ago this August came tougher practices in debt enforcement—which in many cases lands the poor behind bars, leads to suspensions in drivers’ licenses, and other practices that make finding work much harder. The Clinton administration gave state and local agencies authority to engage in these practices, and while the focus of the administration was forcing parents to pay outstanding child support debt, these practices have become more commonplace in the United States for many types of debt, or legal financial obligations (LFOs).

States have seized on the authority the Clinton administration offered them, and enforcement practices in debt collection have become much harsher throughout the country, even though many who owe money are very poor. At the same time, some programs that are trying to aid poor parents in meeting their child support and other financial obligations are actually losing their federal funding. These trends reveal an unfortunate debt enforcement landscape that exacerbates current employment challenges the poor and people of color face today.

In Michigan, for example, the poor are routinely fined, arraigned, and jailed for money that they owe—such as child support arrears, fees associated with traffic violations, drug offenses, or other offenses. Michigan’s practices, akin to modern-day debtors’ prisons, have been deemed by the American Civil Liberties Union (ACLU) and other groups as particularly problematic—though they are consistent with the tone and policies set forth by the Clinton administration.

The ACLU and other advocates in Michigan are now suing to ensure that poor people with such debt do not end up in prison. Aside from the fact that imprisoning poor people for their debt is unconstitutional, part of the advocates’ argument is the troubling ramifications of such policies on debtors’ long-term employment and ability to support themselves and their families over the long term. In the case Michigan v. Bailey, plaintiff Joseph Bailey had long struggled to find work to help pay off court-ordered restitution for $14,000 he stole from a Michigan energy company, according to his attorney, Valerie Newman. (Notably, the energy company has not gone after Bailey for this money, only the local courts have chosen to enforce the judgment.) As soon as he finally found a well-paying position, he was thrown in jail.

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According to an amicus brief from the Brennan Center for Justice at New York University:

Mr. Bailey was sent to prison just as he had finally acquired a well-paying job. In one fell swoop, the court deprived Mr. Bailey of gainful employment and the ability to make restitution while returning him to the taxpayers’ care. … When he was sentenced to prison, Mr. Bailey was forced to leave his employment, thereby ensuring that he would not have the ability to make payments.

“Being in prison for your debt makes it impossible to get a job and move on with your life,” said Newman, who also is an assistant defender with the Michigan State Appellate Defender’s Office. “This case is a travesty, this is such a stark example of someone who was on probation, never committed another criminal act, all he had hanging over him was the money he owed, but the judge said he had no choice but to put him in jail.”

The ACLU has documented other poor individuals whose LFOs have harmed their job prospects. In a 2010 report, In for a Penny, the ACLU chronicles workers who have been locked up due to arrears. As one worker, Reuben, noted:

You know, they give us this opportunity with a release date, you know to start a whole new chapter, with your debt to society, as far as serving time, but a lot of people get scared. For one, the economy is going bad. Two, they can’t, they know they don’t have no job lined up for them because they got their first of all, their [criminal] history. And a lot of them don’t have the work background like myself. I’ve been locked up since I’ve been sixteen. So, I definitely have the record against me and the experience. So, you have a lot of people like myself getting out, you know with debts that are more than $6000, somewhere up to the 10s, 100s, and 50 thousands, and it’s very prevalent on their minds that they will fail if they cannot find a job. And so a lot of them be stressing.

Instead of strengthening families and aiding children, policies of debt enforcement are in some cases generating poverty traps. At the same time, some programs that aim to help poor parents with arrears get back on their feet are deemed experimental and are not continuing to receive federal funding. One program in Spokane, Washington, led by the nonprofit Spokane Neighborhood Action Partners (SNAP), has spent the last two years collaborating with local child support agencies to help non-custodial parents pay off debts, find jobs, and become independent enough to support their children.

Last year, Rewire reported on the first year of SNAP’s program. But the two-year federal grant that funds SNAP’s program runs out next month, and it is unlikely that the funding will be renewed—though SNAP is trying to sustain at least parts of the program.

Terry Villalovoz, financial counselor with SNAP, says many of the 300 non-custodial parents served in the past two years have had serious problems with finding jobs if they’ve lost their drivers’ licenses or faced prison time.

“We’ve had clients who lost their licenses or been incarcerated and they can’t get jobs as a result,” Villalovoz told Rewire. “Also some jobs require that workers have a car, but if they don’t have a license they can’t do those jobs. Employers often don’t want to deal with someone with these issues.”

The debt enforcement landscape, juxtaposed with Villalovoz’s program, reveals that not enough is being done to aid those who are trapped in debt to actually realize the self-sufficiency welfare reform claimed to prize.

“Many child support departments scare my clients, and tell my clients things like, ‘I’m taking half your money or you’re going to jail!’” Villalovoz said. “But that practice just doesn’t work for people who are struggling. Instead, being an advocate for people is important.”

Roundups Law and Policy

Gavel Drop: More Pushback Against Criminalizing the Poor

Jessica Mason Pieklo & Imani Gandy

In both Virginia and Missouri, efforts are underway to end practices of jailing people over outstanding court fees.

Welcome to Gavel Drop, our roundup of legal news, headlines, and head-shaking moments in the courts.

At Slate, Dahlia Lithwick reports on a new federal class action suit targeting a Virginia scheme that, advocates claim, bilks the poor by suspending the driver’s license of those unable to pay certain court fees.

Jennings, Missouri, has agreed to pay almost $5 million to nearly 2,000 people who were put in jail because they couldn’t afford to pay the court fines and fees that they owed.

Meanwhile, the Virginia Supreme Court will hear arguments in a Republican challenge to restoring the voting rights of formerly incarcerated people. At issue is whether the Virginia Constitution allows the governor to restore those voting rights en masse or on a case-by-case basis.

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Congratulations to the Washington Supreme Court for appointing its first woman clerk. Ever. In the history of the court. Slow clap for y’all.

The American Prospect interviewed NARAL Pro-Choice America’s Ilyse Hogue on what pro-choice advocates see as the coming fights over abortion rights and access post-Whole Woman’s Health v. Hellerstedt. 

Nina Martin has a great read on four of the ways research has changed the abortion debate.

Utah Gov. Gary Herbert (R) has agreed not to enforce a state campaign finance law, which conservative groups like Right to Life say violates the First Amendment by requiring nonprofits to report supporters’ private information.

Rewire alum Aimee Arrambide has co-authored an op-ed with Gloria Totten about Texas’ new frontier in harassing women: requiring fetal remains to be cremated or buried.

Amanda Marcotte writes about the Center for Medical Progress’ smear campaign against Planned Parenthood and how it succeeded only in embarrassing conservatives.

Check out the National Abortion Federation’s timeline of the Center for Medical Progress attacks against abortion providers.

Even the generally conservative Wall Street Journal thinks the Republican refusal to hold hearings and a vote on Merrick Garland’s nomination to the Supreme Court is terrible for democracy.

Commentary Human Rights

California’s Minimum Wage Increase Is Not Enough for the Working Poor

Susy Chávez Herrera

Gov. Jerry Brown just signed a minimum wage increase into law. But if we really care about those living in poverty many of whom are Latinos and their children—the next step must be repealing the state’s "family cap" welfare reform that penalizes the poor for having children.

Earlier this month, California Gov. Jerry Brown (D) signed a law to raise California’s minimum wage to $15 an hour by 2022, giving a much-needed boost to poor working families across the state. The Fight for 15 movement has been driven by a diverse coalition that includes unions, workers’ rights advocates, and poverty advocates, as well as workers themselves.

The new minimum wage law is a glimmer of hope for many of the working poor upon whom the state depends. But their livelihoods have been stunted during the state’s decades-long push for welfare reform. The fight against poverty must include the repeal of draconian laws that punish the poor.

When I was growing up in Los Angeles during the ’80s and ’90s, my family was part of the working poor. Although I lived a good chunk of my childhood “near poverty”—but not “in” it, according to conventional definitions—poverty definitely came knocking on my family’s door more than once.

Things were tight financially, though my father worked a full-time job at a condiment factory. He returned home five days a week with the smell of vinegar seeping from every pore of his body, the fumes spilling out of our old Nissan. On the weekends, he would make every attempt to beat down the smell by cleaning, washing, and scrubbing anything that had come into contact with him.

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The small amount of money my mother made taking care of other people’s children while trying to care for her own five children would not keep our family afloat. With two working parents, my family still depended on the weekly food handouts at our local church.

As the person who managed our household, my mother struggled to make ends meet. She finally lost that struggle the day my father came home with a frozen turkey in hand—his Thanksgiving bonus—and the news he had been laid off. Although the layoff was supposed to be temporary, there were no guarantees.

As an adult looking back, I am angered by the fact that poor children, parents, and women of color continue to exist on society’s margins with little hope of finding a respite. Today, more than two million children in California, including almost 70 percent who are Latino, live in poverty. This is exacerbated by the state’s socially conservative stance on welfare reform—a stance that’s in conflict with the state’s new minimum wage law.

For the last three years, California lawmakers, including Gov. Brown, have had the chance to help poor children by repealing the state’s Maximum Family Grant (MFG) rule, the family cap program introduced and signed into law by former Gov. Pete Wilson (R). Latino and Black children bear the brunt of this policy, which denies additional funds for newborn children whose parents are already receiving benefits through CalWORKs, California’s welfare-to-work program.

Family caps essentially punish poor people for their fertility. In California, the MFG continues the state’s legacy of eugenics and its efforts to control poor women’s bodies. The policy has only helped push poor parents of color and their children into deeper poverty. Additionally, women who challenge the MFG are required to prove their pregnancy was the result of rape or incest, or that one of the state’s listed pre-approved birth control methods failed. In California, as in many parts of the country, being a poor woman means the state will do its best to interfere with your reproductive decisions and society will shame you.

According to California Department of Social Services data, 57 to 60 percent of all households affected by the MFG are Latino households. Another 17 to 24 percent of affected households are Black. Perhaps not surprisingly, 25 to 33 percent of children affected by the grant live in Los Angeles County, with its high rate of child poverty. Another 31 to 39 percent live in the “Farm Belt” Central Valley.

As the oldest child, I understood the effects of poverty on a family at an early age. After my father was laid off, my mother was forced to seek government aid. It was a decision neither of my parents took lightly. My father is a proud immigrant and my mother a Mexican-American woman who grew up on the border. For my parents, the thought of taking government money to feed their children was filled with failure and despair.

I remember feeling the shame on my mother’s face pierce my skin like a needle as she stepped up to the cash register to pay for our weekly groceries with food stamps. The humiliation rushed through my veins as I helped her carry bags of produce, diapers, and milk home. Policies like the MFG exacerbate the shame society heaps upon the working poor.

No matter who you are or where you come from, everyone has needed a little help sometime in their lives. The best way to help hardworking and struggling California families is to repeal a classist, sexist, and racist policy whose effects are multi-generational and detrimental to hundreds of thousands of children. After the minimum wage increase, repealing the MFG will move California forward in the fight against poverty.