Responding to Taking Welfare and Hating It

Will Wilkinson has a post at the Economist Democracy in America blog - Taking welfare and hating it - responding to the big New York Times story about people’s conflicts with the welfare state, a story that we covered here.  It’s worth reading it all, but here’s part of it blockquoted.  Wilkinson:

Mostly I find a faithful depiction of a common and interesting conflict within many Americans between their de facto dependence on government transfers and their closely-held ideals of independence and self-reliance.

To understand all this, I think it’s important to acknowledge that our so-called “social insurance” programmes, such as Social Security and Medicare, produce a sense of dependency by design…But, like it or not, many Americans do find this dependency humiliating…

Defenders of the massive New Deal-Great Society entitlements are inclined to see hypocrisy or thick-headedness in those who oppose in principle programmes on which they in fact depend. A more generous way to understand this phenomenon is to acknowledge that the New Deal-Great Society social insurance institutions have proved successful in engendering economic dependence and, thereby, self-reinforcing political support, but they have failed to engender a corresponding shift in America’s culture of self-reliance…

One argument for transforming Social Security and Medicare into Singapore-style forced savings programmes is that a system which relies primarily on intra-personal transfers better suits America’s ingrained ethos of individual responsibility and would thus help resolve the cognitive and emotional dissonance created by the status-quo system.

This discussion would benefit from splitting the welfare state into two relevant parts.  The first is old-age support.  Social Security and Medicare are incredibly popular with the broader public, and indeed that support is a major part of the political map.  They are also popular because they have been very successful in eliminating old-age poverty.  Indeed the huge reduction on old-age poverty is one of the major achievements of 20th century liberalism.

(source)

The people in the New York Times story don’t seem terribly conflicted about these programs.  And that’s by design.  As my man Franklin Roosevelt said, “We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.”  Smart guy.  I don’t see how “Singapore-style” transfers of these programs, whatever their other strengths or weaknesses, would benefit the ethos of Americans.

The second is more interesting, and that is the welfare state surrounding wage and income support.  Here is where you see a lot of cognitive dissonance when it comes to getting benefits.  People in the story are conflicted about food stamps and the earned-income tax credit.  Summarizing an interview with a family head struggling to get by, “Instead, he said he would rather give up the earned-income credit the family now receives and start paying for school lunches for his children.”  I’d really like to see polling on this, but it certainly seems like an issue among the working class, even the working poor.

Wilkinson attacks the New Deal for generating this kind of dissonance, but the New Deal had a very different type of approach to income and wealth support of workers.  There it was about mass unionization following the 1935 Wagner Act, a stronger minimum-wage and other ways to boost the pre-transfer portion of the distribution of income, bolstered by generous public goods (especially driven by the GI Bill).

The post-New Deal approach is the one we see in the story, one of tax-related subsidies and various vouchers targeted to those at the bottom of the income distribution.  Instead of giving workers more bargaining power upfront, we supplement their income after the fact.

There’s a reason why this new approach causes dissonance.  As we brought up in the liberal critique of left-neoliberalism, when the conceptual project of the welfare state is to compensate the losers of society rather than broadly empower citizens, these kinds of pity-charity state governance techniques forces those worse off to engage in additional acts of “shameful revelations.” These revelations make the liberal state something that doesn’t create the conditions for your freedom but instead shames and embarrasses you.

Which is to say the anti-American ethos dissonance strikes me as being most relevant in spaces with market-targeted, decentralized, means-tested, price-mechanism-driven welfare and redistribution policies.  The kind of reforms “liberal”tarians and left neoliberals support the most.  But if that’s the problem, then what is the solution?  Especially in an age with stagnating incomes and declining share of labor?

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22 Responses to Responding to Taking Welfare and Hating It

  1. Their framing, their narrative. Our failure.
    “In Sweden, a high-trust society, the state is viewed more as friend than foe. Indeed, it is welcomed as a liberator from traditional, unequal forms of community, including the family, charities and churches.
    /
    Be that as it may; in Sweden this ethos informs society as a whole. Despite its traditional image as a collectivist social democracy, comparative data from the World Values Survey suggests that
    Sweden is the most individualistic society in the world. Individual taxation of spouses has promoted female labour participation; universal daycare makes it possible for all parents – read women – to work; student loans are offered to everyone without means-testing; a strong emphasis on children’s rights have given children a more independent status; the elderly do not depend on the goodwill of children.
    /
    It is precisely this harmony between the Swedish model and the principles of the market – that the basic unit of society is the individual and a central purpose of policy should be to invest in human capital and maximize individual autonomy – that is key to the vitality of the country’s economy. ”

    http://www.guardian.co.uk/commentisfree/2012/feb/10/swedish-model-big-society-david-cameron

  2. More of the same, struggle over terms and prejudices. The government borrows (trillions) and pays people not to work. Some element (industrialists) insist that this payment is non-productive even as their own enterprises are absolutely dependent upon the same sorts of subsidies.

    Without debt-subsidies there are NO industries which cannot exist without them. Go ahead, prove me wrong, you cannot.

    The bottom is mis-characterization by industrialists who seek to keep all credit subsidies for themselves. Actually, paying people to not work (within the destructive economy) is MORE productive than (borrowing and) paying people to work (within the same economy). This is never understood due to the endless special pleading, lies, propaganda (and the monopoly over credit) on the part of industrialists and their lackeys, the economists..

    Until we are honest about what it is out enterprises do there will be no understanding of the gigantic mess we have created for ourselves.

    If you don’t mind i will return to contemplating Peak Oil. thanks.

    • The government borrows (trillions) and pays people not to work.

      Pays what people not to work? if you mean individuals, that’s just plain silly. No one wants to be on welfare or U/E. And it pays super crappy.

  3. “But if that’s the problem, then what is the solution? Especially in an age with stagnating incomes and declining share of labor?” The whole problem with productivity is that it has a denominator. Instead of increased production or increased leisure time, we get decreased employment. The productivity gains all go to the top 20%, with more than half going to the top 1%.

    Two solutions, which seem politically impossible these days: Rebuild and re-empower the labor unions.

    Shorten the work-week and increase the minimum hourly wage (perhaps through EITC): Say 20 hours/week and $20/hour wage. Overtime would be allowed but pricy: $60/hour paid fully by the employer. This would lead to more demand for goods, which would further produce employment. (I’m not sure about the inflation issue, but tax policy or Fed policy could probably deal with that.)

    “If you don’t mind i will return to contemplating Peak Oil. thanks.”

    Peak Oil and climate change are two other things to ponder and get depressed over.

  4. Pingback: Social Programs vs. Social Charity | liamcmalloy

  5. Mike, Here’s my reductive gloss of larger point: need-based welfare checks make people feel bad so it’s better if the desired final distribution is achieved by the (suitably rigged) market + universal benefits. Fair?

    • Freddie says:

      Is your concern primarily emotional/aesthetic, then? I don’t mean to misrepresent you. This sounds as if you’re saying that the goal should be to gussy up the social safety net in a way that it achieves roughly the same effects as the current regime but is more aesthetically palatable to those receiving benefits. Is that fair?

      I’ll confess: I’ll take the redistribution either way, although redistribution of resources is not and cannot ever be sufficient. But essentially gaming the system so that it seems more palatable to the recipients strikes me as not exactly recognizing the equal dignity and savvy of those recipients. Although, you know. Cart, horse.

  6. yorksranter says:

    Instead, he said he would rather give up the earned-income credit the family now receives and start paying for school lunches for his children.

    Well, everyone would like a raise (enough of which would take him out of the EITC bracket and out of free school meals, I presume). Otherwise, he’s just not well. Wilkinson is a libertarian, is he not? Be great to know what the guy said.

  7. Linda Lyons-Bailey says:

    Well, I’m already going to be poor for the rest of my life anyway, so why don’t people like me just do the better off a favor and starve? We’re just worthless human flotsam anyway.

  8. Felix says:

    I confess I found the NY Times piece too frustrating and couldn’t make it to the end, but, I’m not sure anyone who writes these articles is actually asking the primary recipients of welfare how we feel about being on it. Or, I guess the whole point of the article is to argue that poor people are no longer the primary recipients of welfare – or perhaps profiling middle class users of safety-net services is just more palatable than talking to poor(er) people. What ever the reason, I can say that I hated being on food stamps and MediCal (California Medicaid) because the over-worked and burned out social workers treat you like crap and the whole system is pretty much designed to make you feel awful. If you can accept being treated like shit and proceed through the process, you’re likely to fall off sooner or later anyway since you have to turn in a dozen forms which are often then misplaced or misfiled or whatnot, and then go through the whole process again every 6 months or so, or every time any element of your financial situation changes in any way, and if you fail to or if you are late you will be dropped. This all has to be done in person, and that involves long wait times. Your social worker’s voicemail box will always be full and even if it’s not they will not return your calls. I presume this is because they are burdened with enormous caseloads and their own egregious paperwork, not to mention the burnout inherent in working with very frustrated and very poor people who’s lives are really, really hard every day.

    I think it would be cool if every welfare-hating politician or pundit would attempt to apply for and receive food stamps themselves (let alone TANF) and then comment on the “laziness” of welfare recipients. But more to the point of this post, I’m just not sure I’ve yet heard a convincing argument about how the majority of actual welfare recipients feel about getting aid.

  9. Peter K. says:

    Wikinson:

    “To understand all this, I think it’s important to acknowledge that our so-called “social insurance” programmes, such as Social Security and Medicare, produce a sense of dependency by design…But, like it or not, many Americans do find this dependency humiliating…”

    I think this is just plain false. Yeah amazing that someone just matter-of-factly asserts something on the Internet as being true without any evidence or support. It’s like a David Brooks column.

    If it’s so humiliating why is the Republican frontrunner for the Presidency charging Obama with wanting to cut Medicare? Like it or not your assertion makes no sense.

    Bush was elected as a “compassionate conservative” on social issues but then turned on a dime and tried to privatize Social Security and failed miserably.

  10. Bernard says:

    Social Security was and is a pay in pension fund so we can have money for when we retire. it is not a Government giveaway. we pay into it so we can have money when we retire. a life insurance fund we pay into while we work.

    Medicare is a way of cutting costs for all the medical needs we have. socialized medicine is the only way to save money for all the costs of being sick, getting older and who knows what accidents that occur every day.

    dependency on Government programs is stigmatizing and used by the Rich and conservatives as an excuse to steal workers money, i.e. destroy any collective sense of American identity. that we are all in this Country America as fellow citizens.

    the PR campaign is so successful that most people think Social Security is a Government funded operation. it is Government run, and it like Socialized Medicine, like European Socialized Health care, is much cheaper than any Business run could ever be.

    to allow Business to run Health care has got us in the Money hole we are in now. Business skims off the profits and screws those they can.

    what a scam to put on the ignorant masses yearning to be productive members of a society that no longer has any use for them, American Businesses. Profit over people is what Business has for its’ main goal.

    no wonder America is going down the tubes. Greed is Good is now the only thing that matters. And this is the kind of Society that comes with such a debilitating non functioning Business ethic.

    you reap what you sow. and we have reaped the politics of greed over humanity. Money over human worth. and it shows.

    here in America the goal is to screw as many people out of money as efficiently as possible. and we are good at it. just look at Congress, the Supreme Court and the Businesses that now decide when and how we all live and die. Death panels, courtesy of Big Business,

    Citizens United was the final stamp of Approval of this so called ethic.

  11. Adrian H says:

    I believe this post is over-thinking it a bit.

    My wingnut relatives regularly send me chain emails making the claim that the US spends $1 trillion a year on “welfare” – replete with portraits of all the shiftless minorities supposedly leeching off the beleaguered white middle class. This absolutely infuriates them.

    As for their Medicare and Social Security programs? “I paid for those out of my own earnings!!!!”

    • Dana says:

      Over-thinking is the nature of the business at hand, but I tend to agree with your explanation. Americans have had drilled into their minds over the last few decades a portrait of government as little more than an agent of society’s bloodsucking leeches. My guess is the folks in the Times article taking government benefits can’t figure out how they became one of *those* people.

      Of course, the Republicans are ready with an answer. The “food stamp President” along with the rest of his ilk who “hate business,” are filled with “envy,” and want to “punish success” by turning hard-working Americans into *those* people. First they create a tax and regulatory regime that destroys or prevents private enterprise. This forces all the resulting un- and under-employed to accept government support, effectively putting Americans on the road to serfdom one benefits check at a time. In this fictional universe, every dime people pay in taxes besides SS/OASDI and Medicare goes into to pockets of lazy people of, uh, different backgrounds both here in the U.S. and abroad (20% of the budget is foreign aid!). This explanation is attractive: you’re not one of *those* people. Government made you this way.

      I and several friends posted on our fb profiles the Elizabeth Warren quote about no one in America succeeding on their own. Each post attracted at least a few comments from conservative friends explaining to us that what Warren said might have been true at one time but that it’s not the case anymore and in fact all of the tax money we now pay is wasted on welfare queens and anchor babies and pseudo-welfare recipients like government bureaucrats.

  12. stuhlmann says:

    I have been paying into Social Security and Medicare for over 40 years – likely to be over 50 when I finally start collecting any benefits. Having paid in for all these years, I don’t anticipate feeling any guilt or shame. I have paid my dues, so why shouldn’t I reap the benefits? Will I feel any dependency? I don’t know. Will I feel dependent on Fidelity Investments, assuming my 401K dollars stay with them? I can’t see much difference in getting back the dollars I’ve paid in from a government program vice a commercial one. In both cases I’m getting a return on my investments, as per established rules.

  13. Geoff says:

    The NYT article is a great illustration of some ideas discussed in system justification theory. Researchers studying SJT are among the most prolific in social psychology at the moment (John Jost, Aaron Kay), and I highly recommend their work for an empirical look at the issues you described here. Another interesting angle from this line is asking, instead of justifying an oppressive status quo, when are people inclined to change it? (Johnson & Fujita, 2012) Enjoyed your post, thanks.

  14. Frank Revelo says:

    If a substantial portion of the voting population is being driven crazy by resentment of the government programs they benefit from, that is a strong argument for eliminating those programs. A little suffering from reduction of the safety net is a small price to pay for reducing the level of craziness. Voter craziness is incompatible with democracy, and the loss of democracy is going to be a lot more painful to us all, in the long run, than reducing the safety net.

    Also, we should be careful about bemoaning the fact that conservatives resent being objects of charity. Many liberals see only the bad in traditional morality (sexism, racism, xenophobia, militarism), but if we attack traditional morality blindly rather than gently moving it in a progressive direction, we’ll end up with no morality, or sociopathy. A society composed entirely of sociopaths is likely to be a disaster.

    • Dana says:

      I don’t think “we” are “bemoaning the fact that conservatives resent being objects of charity.” Speaking for myself, I would prefer that these conservatives aimed their ire at their malefactors (corporate executives determined to cut costs and boost revenues, which puts downward pressure on wages and increases household expenses) rather than their benefactor (the government which offers transfer payments to ameliorate the negative consequences of these business strategies). If I’m bemoaning anything it’s the ease with which people are prepared to believe their best interests lie with the preferences of “job creators” rather than asserting (or lately, thanks to free market ideology, openly rejecting) their right to shape a public policy that reflects their own best interests.

      Also, it there some “crazy index” I don’t know about?

  15. Pingback: Did ‘The Great Society’ Ruin Society? « ~ BLOGGER.GUNNY.G.1984+. ~ (BLOG & EMAIL)

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