There has been
long standing criticism over the American welfare state-especially from
fiscally conservative Republicans (http://www.nytimes.com/roomfordebate/2013/05/05/denmarks-work-life-balance/when-welfare-undermines-work-ethic).
The basic argument is that the American welfare system encourages people not to
work by giving people too much aid. For example, a jobless, single mother of
two would receive approximately $49,175 worth of benefits in Hawaii,
the most generous state. A study conducted by Tanner and Hughes of the CATO
institute (libertarian think tank) claim that welfare is much too generous—in
39 states, welfare would give this hypothetical mother more benefits in aid
than an average secretary does from a year of work (http://www.economist.com/news/united-states/21585010-americas-welfare-state-not-working-nearly-well-it-should-taxing-hard-up-americans).
However, that same
hypothetical mother would only receive $16,984 if she lived in Mississippi.
Thus, the welfare state is too complicated to have universal reductions or
increases.
Furthermore, it
is worth noting that because Congress is so starkly divided on welfare there
has been little discussion on the possibility of completely changing the
system. Generally, Republicans want to cut programs and Democrats want to
expand them (a simplification for discussion’s sake). Other countries, such as Britain
and Germany, have changed the welfare structure in their countries. Britain has
combined benefits and placed a cap on the total amount an individual can
receive, to increase efficiency, and Germany has combined welfare with job
trainings and has had considerable success bringing down the unemployment rate
as a result. Because Congress has been so polarized, America’s welfare state
has become stagnant, and as a result, there may be considerably better options
that are overlooked.
Alternatives to
welfare that have been suggested have been large increases to the minimum wage,
bringing it up to 15 dollars per hour (Robert Reich had previously suggested
this). This would encourage those on welfare to work as the benefits of welfare
would, in most places, not exceed the benefit of working (remember aid through
welfare is not taxed, whereas income from working is). Other ideas have
included providing more job training programs and more aid for education
programs.
Regardless of
what the alternative is, I believe alternatives should at least be discussed. Accepting
the welfare state, as is, will encourage static solutions that may not be the best
suited for the time. As many of our practice experiences work in communities
that are dependent on welfare, this is not only an extremely pressing issue,
but a very relevant one as well.
You raise a great point Sanat. When the arguments about welfare in the US get reduced to "increase" or "reduce," the complexities and regional differences get glossed over and that can be problematic in the actual implementation of welfare. When think tanks release research such as the study you refer to by the CATO Institute, they contribute to that false dichotomy between increase and reduce welfare, ignoring potential alternatives.
ReplyDeleteYou also raise a good point with alternatives such as raising the minimum wage. Of course, one of the classical arguments against that would be that it would make it harder for small businesses to start up, but that would remain to be seen since obviously such a low minimum wage isn't working either.
One thing it's important for policy makers to keep in mind is that while economic solutions are valuable, they can be reductionist, just like the dichotomy between increasing or decreasing welfare. The very need for welfare can be forgotten when we look only to the economic realm. Although this is not necessarily bad as not everything can be participatory, we have to keep in mind that policy discussions tend not to be participatory and often remain exclusive to economic experts. Of course solutions are complicated, but other causes of poverty - such as Katz' power and political economy - should be kept in mind too, especially since they often (but not always) have a greater capacity for participatory involvement. When policy makers discuss alternatives to the existing welfare state, they should consider those ideas to craft new alternatives, whatever they might look like.
I think the topic of your post is really interesting, particularly the idea of alternatives to the welfare state. While the welfare state is commonly conceived as free aide, tax expenditures deducting retirement savings, charitable contributions, the home mortgage interest deduction, and higher education are hidden policies supporting public welfare are less visible parts of the welfare state. So, I feel like an “alternative” to the welfare state, such as policy to raise minimum wage, is still part of the welfare state, as it aims to promote the wellbeing of citizens. Although I don’t agree with the word ‘alternative’ I definitely agree that policymakers must be more creative and rigorous to produce more innovative strategies to bridge polarized ideologies rather than spend so much time arguing back and forth about the same ideas. I don’t think progress is as simple as increasing or reducing the welfare state, but restructuring it in a much more profound way.
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