When does a safety net become a hammock? When it becomes a disincentive to get up. And that brings us to the Pennsylvania Department of Public Welfare, whose director informs us (via the AEI, via Powerline) that single moms making 70 grand a year would be better off on welfare:
Moral hazard, anyone?
Meanwhile, the same presentation gives us this delightful image:
Hooray! I’m 3/5 (1/1.65 = .61) of a welfare recipient! And I’m certain that the folks in Washington value me that much — at most.
Professor Mondo 
Three major problems with this presentation, ProfMondo. First, as any economist will tell you, for each additional source of social safety net/welfare benefits, there is an opportunity cost attached to getting it. So one needs to factor in these opportunity costs in order to get the true point at which it behooves someone to eschew seeking higher non-welfare sources of income. Second, the assumption in the argument is that not only do opportunities exist for the single mom with two kids to find a source of income up the income scale, but that these opportunities exist equally for the single mom with two kids as they do for any other job seeker. Common sense tells us that a job that pays $29,000 requires a very different set of skills and scheduling commitments than a job that pays $70,000 — and that the job at $70,000 is much more likely going to require commitments that even hardworking single mother of two children will not be able to meet if this single mother wants to be an involved and loving caregiver to her children. Finally, let’s remember that anyone earning $29,000 is probably not a lazy good-for-nothing mooch resting on her laurels and unwilling to get up off the hammock. In fact, the jobs that pay this much probably require more hours of grueling labor at lower wage rates than you or I undertake. So, ProfMondo, all this presentation does (and I am afraid you have fallen into this trap, too) is to paint a demeaning picture of the character of any WORKING WOMAN (single mothers of two who actually DO work hard at a low-paying, full-time job) all because she, for any variety of reasons, finds herself in a position to absorb the opportunity costs of seeking welfare benefits on top of her regular job, just because she wants to be a responsible caregiver and provide a healthier and better life for her kids. Its implicit dismissiveness and demeaning of working single mothers as lazy, hammock-loving, dependent welfare queens is both insulting and hurtful. But, unfortunately, it’s an all-too-common and unsurprising attitude coming from the out-of-touch rightwing “47%ers” white male professionals.
Huck, I actually agree with several of your points — not least that the women who women who hold $29K jobs and the women who hold $70K jobs may well be very different women, with dissimilar abilities and dissimilar opportunities. And the business of the physical demands of the job may be true, but aren’t really germane to the argument — although I’d agree that there are incentives besides the purely financial to try to earn a “better”/less physically demanding job. But from where I’m sitting, none of that gives the two women the right to the same level of disposable income. There is no right to live like someone making 70 grand (more than either Mrs. M or I will likely ever make, by the way), especially if you don’t have skills that warrant that level of pay. And for the state to attempt to assure that Ms. 29K can lead the same lifestyle as Ms. 70K is a disincentive (not necessarily dispositive, but present nonetheless) for Ms. 29K to try to move up. Additionally, it’s not fiscally sustainable.
The phenomenon of the welfare cliff is the result of an effort to legislate a degree of equality of outcome, which has never really worked in a finite world. I don’t think a return to some Dickensian system of “less eligibility” is an answer, and I don’t know a conservative (other than the occasional Randite) who calls for a dog-eat-dog existence without providing for what used to be called “the deserving poor”, but the current arrangement is wrongheaded and has created a multigenerational client class, which is a poverty of its own. As ever, thanks for dropping by!
I guess I just don’t see where specialized social safety net programs like CHIP or Food Stamps or Childcare subsidies are the equivalent of an income allowing a welfare recipient whose disposable unrestricted income is only 40% of the 70K total benefits to lead the same lifestyle as someone whose 100% disposable unrestricted income totals 70K. I also don’t buy the argument that any hardworking single mother at the 29K range wouldn’t seek to move up the income chain for fear of losing welfare benefits. Again, the opportunity costs of living on restricted welfare are not inconsiderable. But what we are essentially talking about is what we as a society value as the bare minimum of dignified living, not legislating a degree of equality of outcome. I’m not sure a total package of $70K is that bare minimum, but I do know that a single working mother of 2 at the 29K net income range simply cannot work and provide a dignified life for her family with that amount of income, given what are the costs of housing, food, healthcare, and childcare for such a family of 3. Personal Example: (This is not quite an equivalent, but it makes my point nonetheless.) My mother and father had six kids by the time they were 24 and 25 years old, respectively. They did not graduate high school. My father worked his ass off as an electrician (non-union), putting in 60-70 hours per week, often working on weekends just to get the overtime. My mother could not get a job that would pay her enough to cover the costs of childcare, so she did the good motherly thing and stayed home with her kids until the youngest was in school and the oldest (that would be me) was old enough to babysit. During that stretch of time, my dad’s income alone couldn’t pay all the bills and keep his family healthy and fed, so we had to rely on subsidized school lunch programs and food stamps. As soon as my mother started to work, and the family no longer had to rely on food stamps, even though we remained eligible for them, we went off of them. Food stamps were not a disincentive to self-improvement, they were a short term necessity for survival that served as an incentive for self-improvement to get off of them. And this was for a dual-parent family with an exemplary work ethic. And I suspect that a good portion of single working moms are more in line with that example than with the welfare queen line.
Not sure about your definition of all of Ms. 70K’s income being disposable — theoretically I suppose it is, but she too must pay for housing, childcare, food, etc. That’s certainly not the way the graphs I shared represent it (and btw, though I didn’t insert them, the CBO’s graphs report a similar phenomenon on the national scale.) And again, I think folks would see your story as a success story — because it is one — and even the conservatives I know would see it as such. But the key point there is your folks’ decision not to take whatever they could get. While I’d like to agree with you that most folks are like that, I have my doubts. After a while, being told something is an entitlement can lull people into a sense of, well, entitlement. Your folks didn’t feel entitled to take food stamps they didn’t believe they needed. Compare that with folks like the “Obama’s gonna pay for my gas” lady. Consider the phenomenon of multigenerational poverty — and to go ahead and shoot the elephant in the room, I know that’s not a racial thing (Remember, I married a girl from a dirt-poor Appalachian family). Consider the brand promise in Obama’s “Life of Julia” campaign — the State is there to tend to your needs from womb to tomb.
The question becomes at what point does a rational actor decide that working harder is for suckers? (By that standard, your folks didn’t act rationally — nor would have mine, in a similar situation. Thank God for that irrationality.) I suspect that for too many people, we may have passed that point. You don’t think we have. And I think we’ve proven that reasonable folks can differ. But again, there’s also the problem that the money simply isn’t there. That’s when Dame Thatcher’s comment about the weakness of socialism comes into play. And that’s just math.
Well, I’ll agree with you on the point that the larger welfare state is not fiscally sustainable; but what often bothers me about how many fiscal conservatives approach this is to overplay disproportionately the welfare programs like food stamps, CHIP, childcare, subsidized school lunch programs, etc., in their criticism of government spending and then use this as a character bludgeon against those who benefit from them. Yes, our welfare state is fiscally unsustainable, but what really needs reform is the welfare associated with Medicare/Medicaid, Defense Spending/Subcontracting, and Agrobusiness subsidies. Food stamps, CHIP, etc., constitute such a relatively small percentage of our national budget, and they serve such causes that are at root good for the preservation of human sustenance and dignity, that to focus on them seems so misplaced. It seems purposefully targeting the poor and lambasting them as lazy moochers. Now, I’d bet that you probably agree with the need to reform the big entitlement programs; but I wonder if you’d ever see such painstaking evaluation of the income benefits of such programs on individual and business beneficiaries of such programs in the same elitist, callous, and dismissive way. I weary of the poor being vilified for their poverty and being shamed for their needing and resorting to social safety net programs. I hear you when you say that you consider my family’s experience as a success story; but I think if you were honest you would also admit that the stigma attached to being on welfare, particularly by the rightwing, is not one that conveys this idea that my family’s story is one of success. It IS a success story, but it is so in spite of having had to rely on food stamps to survive, which we are conditioned to believe is a blemish in an otherwise admirable pull-yourself-up-by-the-bootstraps story. In fact, I have even heard conservatives argue that shame should be the default feeling for those who need to go on welfare, or at least for those who have any self-dignity or self-worth. But let me tell you that my family’s success story is so partly because of welfare, without which even the best of intentions and hard work wouldn’t have made much of a substantive difference in our reality at the time. I’m sorry, ProfMondo, but the way conservatives vilify and demean and stigmatize welfare and welfare recipients does not endear them to me and make me feel as if they have any understanding of or respect for my family’s success, much less any empathy for my family’s struggle. And this comes from someone who has, in a way, “made” it. If you want to know why that 47% comment by Romney was such a blunder, and why the bulldog fixation on welfare by conservatives generally is so off-putting, just absorb my family’s story, which is not that uncommon.
Hmmm, one type of person, in this case “working stiffs” amounting to 3/5 of another type of person. 3/5 of a person… 3/5 of a person… Now, where have I heard that before.
One of the reasons I’m inclined to side with Prof Mondo on the moral hazard issue here is because of the public reaction to the recent birth-control coverage mandates from HHS. I didn’t hear anyone say, “Let’s make sure this benefits poor women, but don’t worry about me; I can cover this cost myself.” Instead, I saw women who earn six-digit salaries cheering the freebies they were going to get, when they should be the ones helping to subsidize the system.
On the other side of the spectrum, I’ve seen very conservative people in charge of public works projects in the Deep South take millions in federal funds for utterly unnecessary and often useless upgrades to their facilities, first from Homeland Security after 9/11 and then again in the form of stimulus money.
I guess I’m just not sure we’re still a culture in which people turn down things they don’t really need.
Jeff – I think there is some truth to what you say, but I don’t think this is really the default reaction when it comes to things that people really feel constitute a public good — i.e. something that constitutes the proper involvement of the state in how it spends its resources in the promotion of the general welfare. Birth control, I might argue, is considered a matter of public health, which is why I would say that women earning six digit salaries feel entitled to this through their tax contributions when they might not feel entitled to other medical procedures or treatments. This is also true in the case of your other example of conservatives in charge of public works projects. In fact, as a New Orleans resident who experienced Hurricane Katrina, I’ve seen this first hand when it came to conservatives whose houses were uninsured or underinsured and who thus felt that lining up to get tens of thousands of dollars from Uncle Sam and the American Taxpayer through FEMA rebuilding “road home” grants was their fair entitlement from a government that was supposed to give iron-clad guarantees that levees wouldn’t rupture and thus cause flooding to their homes.
But in the end, I think all one needs to do is just look in the pudding for the proof of whether the moral hazard argument has any merit. ProfMondo notes in reference to the report on welfare in PA: “that single moms making 70 grand a year would be better off on welfare.” And yet, my question is: how many single moms making 70K or less have actually quit such jobs voluntarily to take a 29K job in order to get the better deal through welfare? I mean, that’s the “rational” behavior, right? We should expect at least some single moms to take this deal, right? And yet I’d bet dollars to doughnuts that there’s not a single “rational” woman in this situation who will read this report and decide to up and quit their high-stress professional 65K job, get a low pressure clerking job at 29K, and then go on welfare to make up the difference and up their total benefits to 70K. I’d bet there’s not a single one. Conversely, I bet there are plenty of cases where the reverse is true, where a single mom on welfare earning 29K a year has gladly improved her skills and, in a fit of irrationality, taken better paying jobs (even marginally better paying jobs) at the cost of losing welfare benefits in doing so.
I suppose it comes down to a difference of opinion about human nature, and mine is a bit more dismal than yours. In my experience, people are very good at crunching the numbers with regard to their own livelihood, and a good number of people are inclined to choose more leisure and a guaranteed income over working harder. The “single mom” example is probably less persuasive than other scenarios.
(Hey, I didn’t know you were a New Orleans guy! My family lived on the North Shore until last October. I’m already missing Louisiana…)
Jeff – Well, let’s just presume that people do behave rationally and crunch the numbers and act accordingly. And let’s just presume that my claim is true that there’s no single mother earning 70K or less (but more than 29K) who has quit such a job in exchange for a 29K job and welfare benefits. What this tells me is precisely that the moral hazard argument doesn’t really hold because there is something about the opportunity costs of behaving in this “rational” way that actually make such behavior ultimately irrational. Again, take my family’s example: is it “irrationality” (as ProfMondo suggests) that drove my mother to work as soon as she was able such that we were able to get off of food stamps? Or was it actually quite rational? If one holds that people behave rationally and would choose more leisure and a guaranteed income over working harder, then the only logical conclusion to draw is that earning 29K and going on welfare, compared to earning 70K or less, is not actually a choice that gives more leisure and actually may really require much harder work to pull it off than welfare critics believe. Until anyone can show me that there are actual people who behave in line with the moral hazard argument in this example, I just won’t believe it has any substantive merit as an argument and is nothing more than a convenient and easy way simply to stigmatize and demean the working poor who take advantage of welfare programs.
And, yes, I’m a New Orleans guy who has tried to seek greener pastures on occasion, but who, in the end, just can’t escape the decaying greatness of the N’Awl. Careful or you’ll find yourself dragged back to Louisiana before you know it! š