Idle Incentives

Housing Project

Society does need to provide for those in need.  The disabled that cannot work, orphans and abandoned children, and even those that have temporarily fallen on ‘hard times’.  Part of being in a society requires that we take on this responsibility.  Any of us could fall into one of these conditions due to accident, sickness or misfortune.  Only the utterly selfish and self centered would deny helping those truly in need.

It is not a question of whether or not we should help others.  The questions are how and under what conditions and circumstances.  Many of our current problems, financially and culturally, are a result of us as a society allowing our government to deal with assistance by just handing out money.

If you are deemed “in need” by the government, you get money.  A recipient doesn’t do anything return.  This mechanism of providing financial assistance is, in any case where someone could do something in return, promotes and incentivizes idleness.  We are literally paying people who could do some kind of labor or service money to sit around and do nothing.  There are few, if any, incentives to stop taking or reduce the amount of the assistance.

Government assistance is quite substantial.  In a 2013 study by the Cato institute , a mother with two children living in New England would get about $40,000 per year.  Tax Free.  The study points out that this works out to more than someone who works for $21 an hour gets to take home.  So why would such a person work for less than that?  Or even slightly more than that?  Would you take $25 an hour for working if you could get $21 an hour sitting at home?

I remember watching a TV investigative report where they pointed out (I’m sorry, I wish could recall which TV show, but I can’t) that teenage girls on welfare were having children so that they could move out from under their mother’s thumb, get their own place, and start to receive the “assistance” I just described for themselves.  So not only are current welfare methods incentivizing not working, they are incentivizing the creation of more welfare recipients.  I figure that it costs society about a Million dollars to subsidize the life of someone who is on “assistance” their entire life.

It is not just welfare that is a problem.  Social Security disability, Food Stamps (now called SNAP for “Supplemental Nutrition Assistance Program”) and similar programs have skyrocketed in the amounts they have been paying out.  Social Security disability payouts totaled $56 Billion in 2000, they have now tripled to $154 Billion a year.  SNAP payouts totaled $18 Billion in 2000, and have now quadrupled to $78 Billion a year.  While many receiving Social Security disability are totally unable to work, many can.  Before 2000, only about 1% of workers put in a disability claim.  Now its 2%, and work is actually safer today.

As a society we have decided not just to provide “assistance” but to provide incentives for people NOT to work.  We cannot afford this, either financially, nor culturally, in what it does to people who do not work.  Idleness leads to all kinds of crime issues.  Our “assistance” programs destroy families as we provide additional assistance to single parents, incentivizing the father abandoning the family.

What to Do

We need to fundamentally change how we handle “assistance”.  We need to use both the carrot and the stick.  There need to be positive incentives to stop receiving assistance and there need to be negative consequences for receiving it.

People receiving assistance need to do whatever they can in return for the money they get.  If that means manual labor, then that’s what they should do.  If it is some kind of office work, then that is what they should do.  People who can do something must do that in order to receive something.  And frankly, it should be unpalatable enough to encourage them to do something else.

There need to be additional incentives for taking less or getting away from assistance.  And we do need to help people to get away from it.  Maybe the work requirements are getting training in a skill.  Maybe benefits need to decrease over time.  But there need to be incentives, pathways, and motivation to get people away from government handouts.

We need to pressure those we elect to do these kinds of things.  Too often, people are getting elected based on how much they are providing to their supporters in terms of handouts.  This needs to end, and only those that vote can end it.

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