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Work disincentives hit the near-poor hardest (2022)

niskanencenter.org

31–40 of 127 posts

Re: Work disincentives hit the near-poor hardest (2022)

#31
post #12

I can't find the original tweet, but someone (half?) jokingly proposed a law that all benefits must be defined as continuously differentiable functions (thus making cliffs impossible). "Yeah, I made $1M last year. Here's my SNAP check for six cents."

That can still have work disincentives; anywhere the magnitude of slope of the benefits is close to (or steeper than) the slope of the income as it phases out, then working more can get you no gain (or lose you money).

Re: Work disincentives hit the near-poor hardest (2022)

#32
post #16

I always felt simplifying all this, it would probably be possible to consolidate and offer proper health care, and a real welfare, along with a supplemental program for those inapt to work, with it all costing less than the mountain of piled complexity and paper work that we have today.

The system in its current insane state serves the purposes of multiple groups of people:

1. The bureaucrats administering the system because the more complex and insan the system is, the more bureaucrats you need.

2. The politicians who can promise $X of benefits to N people while knowing all along that due to the complexity of the system the actual cost of the program will be well under X*N due to failure to claim the benefits.

3. Companies that can now hire workers for less than their cost of living because they know they can just make it up out of government benefits.

And it hurts, of course, the poor people who depend on these programs. But that doesn't matter politically, because these people are mostly not smart enough to even figure out how they are being screwed. Whereas the people in 1-3 above are absolutely smart enough to figure out how they benefit from the current system and they vote and donate accordingly.

Re: Work disincentives hit the near-poor hardest (2022)

#33

I usually get downvoted on any of my commentary on poverty or welfare, despite my lived and continued experience in it, but I'll punt again. My family, from grandparents downwards (siblings, aunts, uncles, cousins, across 3 family lines) have all relied on government handouts for a majority of their lives, and had their character destroyed by the system. All rely on a meager amount of welfare to stay alive, not healt…

[deleted]

Re: Work disincentives hit the near-poor hardest (2022)

#34

> In practice, however, several of the programs that seem to offer the most generous benefits are severely underfunded, so relatively few families are actually able to obtain them. For example, according to congressional testimony from the Center on Budget and Policy Priorities, 68 percent of poor families with children received Aid to Families with Dependent Children in 1996. By 2015, after the welfare reforms of th…

This doesn't surprise me at all. On top of lack of funding, you have:

1. Benefits don't come into effect fast enough to matter for emergencies. Even with expedited processing you can have to wait a week for food.

2. The bureaucratic requirements aren't obvious if you're new to the system. How many people know that "expedited" processing exists? How many people know that they qualify?

3. The bureaucratic requirements aren't exactly painless. It's been awhile, but I remember one was as simple as "show up at our office for reason." That's easy if you have a car or money or friends or whatever, but a 10-mile hike each way in -20F weather is never fun, and I've gotten in trouble more than once when hyper-local weather patterns (e.g., too close to a body of water with a long straight stretch) made the situation much more dangerous than I was equipped for.

And so on. The system is (supposedly) easy to use if you know its ins and outs, but if you're struggling and never anticipated being in that situation then you're mostly just fucked.

Re: Work disincentives hit the near-poor hardest (2022)

#35
post #2

I remember reading this book called 'The Losers' ( https://www.goodreads.com/book/show/2114133.The_Losers ) about a privileged man who has a car accident, becomes disabled and comes to rely on government support. The book looks at the lives of the working poor and actually poor, who rely on welfare cheques and other subsidies and highlights the social and psychological impacts of these systems of support. It was very…

>probably not intentional All the current results were foretold by people screeching warnings about them 50+yr ago. > deeper and more systemic. Nobody's budget ever got bigger or headcount grew or government contract got more lucrative because people got off welfare.

What "current results" are you referring to? No, people 50+ years ago weren't arguing that cliffs can lead to disincentives, they were arguing that the whole system is "socialism" and bad - something that has been repeatedly disproven.

There are few things more evil in our society than the breed of conservative that will talk about how their family needed social welfare growing up to survive, how it worked and they did survive, but how "ashamed" they feel so they thing we should tear everything down and remove the ladder now that they've climbed it.

Re: Work disincentives hit the near-poor hardest (2022)

#36

> In practice, however, several of the programs that seem to offer the most generous benefits are severely underfunded, so relatively few families are actually able to obtain them. For example, according to congressional testimony from the Center on Budget and Policy Priorities, 68 percent of poor families with children received Aid to Families with Dependent Children in 1996. By 2015, after the welfare reforms of th…

[deleted]

Re: Work disincentives hit the near-poor hardest (2022)

#37
post #12

I can't find the original tweet, but someone (half?) jokingly proposed a law that all benefits must be defined as continuously differentiable functions (thus making cliffs impossible). "Yeah, I made $1M last year. Here's my SNAP check for six cents."

They should be. And for the great majority of citizens, they should be calculated automatically along with taxes without the need for filing/paperwork. But we must think of the Intuit shareholders and the harm that that would cause them.

If someone in the coming years ran on taking down regulatory capture and returning that as social safety net funding, public goods, and lower taxes, and had the chops to actually deliver, they'd do well.

Though best to start local government first, obviously.

We're reaching breaking points in so many places...

Re: Work disincentives hit the near-poor hardest (2022)

#38
The real issue isn’t just the cliffs themselves — it’s that our welfare system is a set of disconnected programs that interact like poorly designed APIs. For people with zero margin for error, even a small income change can trigger huge losses in healthcare, childcare, or housing.

We ended up with a system that’s expensive, complicated, and psychologically brutal — and still fails to do what it was designed to do.

Re: Work disincentives hit the near-poor hardest (2022)

#39
post #2

I remember reading this book called 'The Losers' ( https://www.goodreads.com/book/show/2114133.The_Losers ) about a privileged man who has a car accident, becomes disabled and comes to rely on government support. The book looks at the lives of the working poor and actually poor, who rely on welfare cheques and other subsidies and highlights the social and psychological impacts of these systems of support. It was very…

>probably not intentional All the current results were foretold by people screeching warnings about them 50+yr ago. > deeper and more systemic. Nobody's budget ever got bigger or headcount grew or government contract got more lucrative because people got off welfare.

Every employee is off welfare. Employment is very lucrative.

Re: Work disincentives hit the near-poor hardest (2022)

#40

Earlier quoted context omitted.

They should be. And for the great majority of citizens, they should be calculated automatically along with taxes without the need for filing/paperwork. But we must think of the Intuit shareholders and the harm that that would cause them.

If someone in the coming years ran on taking down regulatory capture and returning that as social safety net funding, public goods, and lower taxes, and had the chops to actually deliver, they'd do well. Though best to start local government first, obviously. We're reaching breaking points in so many places...

The problem isn’t that such candidates would never accomplish anything let alone get elected due to the insurmountable amount of resistance from so many incumbents with a vested interest in that not happening, ever.
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