A sign reading “Please Help, Homeless and Hungry, God Bless You” lies next to a homeless man, unseen, in New York, U.S. (Photographer: Scott Eells/Bloomberg)

The Welfare Debate the U.S. Should Be Having

(Bloomberg Opinion) -- When Representative Alexandria Ocasio-Cortez first rolled out her Green New Deal, she called on the government to provide economic security to those “unwilling to work.” Conservatives correctly seized on this to argue that the Democratic Party seemed to be moving quite a bit further to the left in its views on economic policy.
The controversy was reignited this week, when first daughter Ivanka Trump rejected a “minimum guarantee” for people who are unwilling to work. Ocasio-Cortez shot back. Expect more volleys to follow.

The political score-keeping aside, the blunder crystallized the issue that experts should be discussing: the relative importance that government policy places on personal responsibility, on the one hand, and economic security, on the other. How do you balance the two?

The bipartisan welfare reform of 1996 changed the system for providing cash aid to the poor by setting the expectation that people receiving assistance should be working. In signing the legislation making these changes, President Bill Clinton said: “Today, we are ending welfare as we know it.”

But the shift in thinking about safety-net policies primarily as tools to help low-income Americans get and keep jobs is not as straightforward as it seems. Some people may be unwilling to work because they lack the very “work supports” — cash, food, housing assistance, medical care and the like — that would enable them to get and keep a job. It’s hard to find a job, let alone keep it, if you don’t have a roof over your head, or the medical care and nutrition necessary to keep you healthy.

There’s a chicken-and-egg problem here. On the one hand, if work supports aren’t tied to work requirements, then they give people an incentive not to get a job. On the other, if they are only available to people with jobs, then they can make it harder for people to move from not working into employment.

 Implicit in the argument that people who are unwilling to work have forfeited their claim to economic security is that work is available. But jobs may not always be available, both for people who are willing to work and those who aren’t, particularly during economic downturns. During the Great Recession, there were over six unemployed workers for every job opening.

Another major challenge in weighing the balance between responsibility and economic security is what to do about the hard cases. How should policy handle the situation where a person is truly unwilling to work? Or a person who loses his job and won’t realistically be successfully retrained, but who is a decade away from retirement?

The first step in deciding how much economic security is owed to those unwilling to work is to recognize that this is a question of values. What do those who are relatively well off owe the poor? What, if anything, do the most vulnerable in society owe their neighbors? These questions have no objective answer.

I tend to lean more toward the importance of personal responsibility than economic security. Public policy should not create an entitlement to economic security for all who are unwilling to work. Instead, just as society has obligations to its most vulnerable members to provide a base of security, those who receive assistance also incur obligations to those providing it.

The U.S. safety net often does a decent job of reflecting these values while also being flexible enough to deal with the hard cases and economic contingencies that often arise. Some features of these programs can serve as a model for thinking about how to fix and improve the system overall.  

For all the talk about work obligations, programs can (and often do) have activity requirements rather than strict employment mandates. Those who receive public assistance are required to contribute to society in exchange for the benefits they receive, whether through paid employment, schooling or training, or some form of community engagement. Even in a depressed local economy with few job openings, there are plenty of opportunities to volunteer or to receive training.

Some safety net and social insurance programs are relatively more generous during economic downturns. States can request temporary waivers, for example, from enforcing time limits on food stamps when unemployment is high and jobs are relatively scarce. And the unemployment insurance program offers additional compensation to laid-off workers when joblessness in a state is particularly high.  

In addition, there should be measures to bolster labor demand during recessions and in depressed areas. In 2009 and 2010, as part of their response to the Great Recession, 39 states and the District of Columbia operated subsidized employment programs, successfully placing low-income workers into private-sector jobs. Initial evidence suggests that these programs were successful.

Rather than impose a work requirement on every individual receiving a safety net benefit, programs can require that a certain share of the total number of beneficiaries be engaged in a work activity. For example, under the 1996 welfare reforms, half of families receiving cash from the Temporary Assistance for Needy Families program in each state must be engaged in a work-related activity for at least 30 hours per week. Ninety percent of two-parent families in each state are required to be engaged in work under TANF.

Placing the work obligation on the overall population of benefit recipients rather than on each individual creates a mechanism to deal with many hard cases, while still offering the pro-work goals of the safety net and the powerful message that society expects recipients to be engaged in their communities.

Even before Alexandria Cortez-Ocasio came on the scene, it was clear that the debate over how to balance economic security and personal responsibility would be a major issue in the years to come. Changes in the economy could continue to put pressure on workers with relatively few skills and less experience. Inequality could continue to widen, putting pressure on our political system to provide greater assistance to those who are relatively less well off.

“Unwilling to work”? Public policy shouldn’t accommodate that. Government shouldn’t send the message that disengagement with the rest of society is nothing more than a personal choice. But a key to making the safety net more pro-work will always require balancing the tradeoff between personal responsibility and economic security, and not abandoning either.

Her office said later that thepress release was unfinished and published by mistake.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and resident scholar at the American Enterprise Institute. He is the editor of “The U.S. Labor Market: Questions and Challenges for Public Policy.”

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