Significant advances against poverty in the coming years seem likely to depend on significant increases in paid work among the poor — and the reasons are not purely economic. Work means increased earnings, to be sure, which in turn would increase self-sufficiency, increase economic mobility, increase income in retirement, and reduce public expenditures on welfare and related programs. But work is more than just a means of income generation. Work also provides adults and their families with a time structure, a source of status and identity, a means of participating in a collective purpose, and opportunity for social engagement outside family life. A host of studies have connected joblessness to increased risk of family destabilization, suicide, alcohol abuse, and disease incidence, as well as reduced lifespan. Several large reviews of research conclude that unemployment not only reduces physical but also psychological well-being.
Read the whole essay. He argues that cutting off welfare benefits for people who choose to not work was a good idea, and we should do the same with food stamps and housing subsidies.
While he does not discuss a Basic Opportunity Grant directly, I think that his analysis clearly lines up against the idea.
“While he does not discuss a Basic Opportunity Grant directly, I think that his analysis clearly lines up against the idea.” Seems to imply that a Basic Opportunity Grant would subsidize more leisure rather than work relative to the SSDI, TANF, etc programs it would replace which to greater or lesser degrees require eligibles to remain unemployed. Its not clear that is the case at all. I assume you are not talking about Pell Grants which are officially referred to as “basic opportunity grants,” but rather various basic income guarantee schemes. I’d say lets look at the major experiments currently underway such as in Finland where there are 2,000 people enrolled in a 2 year study. Now is the time to be looking at the design and evaluation of these experiments around the world, rather than coming up with theories to tell ourselves why they won’t work.
I suspect work is another example of restricting supply and subsidizing demand. If you cut welfare, that doesn’t necessarily make formal employment exist. Perhaps tje welfare came about as formal employment for ZMP workers was priced out of the market. For me, nearly all of the themes lately add up to for us to minimize the artificial fixed cost of employing marginal workers…but then again they always have.
The worry is that there has to be something for poor/unskilled labor to do. As automation creeps up the value chain, opportunities for unskilled labor disappear. What happens when half the country can’t work because there’s nothing valuable for them to do?
Once upon a time, the answer would have been to eliminate the poor, with a bullet to the back of the head, or some nice toxic plague. But we live in enlightened times, so I suspect the mechanism of choice will be severe cutbacks in spending on the aged. About half the cost of keeping people in old age homes comes from Medicaid, for example. Suppose the government cut the Medicaid program in half? Suppose it whacked off a quarter or a third of Medicare spending? After a couple of years of this splendid reform, we’d probably find there were far fewer destitute 80 year olds drawing social security benefits, and we could start make proportionally sized cuts in that program as well.
The future is bright! We just need the courage to start, and maybe some self-discipline to keep us from inspecting the results in any sort of detail.
Automation can be delayed (for once, for a good reason) by reducing or eliminating minimum wages.
In so far as automation is inevitable, it won’t, in the long run, reduce employment, merely transform it. There will be fewer factory workers, more technicians and programmer. Also, automation will drive down costs and thereby enable people to spend the money they save on other things, driving up demand for those other things.
The only real issue with automation in terms of employment is the short term structural unemployment that comes from the difficulty of training a factory worker to work in IT.
Of course, this difficulty preventing people from moving in to new fields also drives up the wages for those in those fields (why Comp. Sci. jobs pay so well).
If we could get the cost of employing the poor down, more could be employed.
There is plenty of work to be done, but the cost of having it done cannot be ignored.
How many of you wise (and therefore wealthy) economists has a butler and a maid and a valet and a full time gardener.
Me too.
The cost of that kind of help is cultural. Would you want someone making $2/hour in your home? Raising your children? When I think of the kind of people that would accept that wage it doesn’t conjure to mind the sort of people I would trust in such situations.
Most interactions with minimum wage service workers these days aren’t that pleasant, and those are usually routine and mitigated by technology and automation.
If you abolished the min wage and healthcare mandates, you wouldn’t get a whole lot of uptake on personal butlers. Note also that such service people in the age when they were more common still had to do things like move away from their village, live premaritally on the estate, and agree not to marry. That’s not something that’s scalable.
I would counter that employers like Uber and McDonald’s provide the service of corporate backing for individuals lacking reputation lal capital.
Maybe by lowering hurdles there could be Uber for yard work and auto repair. Or maybe not. Let’s try it and find out.
You can post a job in Craigslist gigs or pick up a bunch of guys at a Home Depot parking lot. That kind of stuff seems at its maximum extent already.
https://www.fiverr.com
This to.
Thing is though I think there is a fundamental limit to how much menial labor people want from desperate people making slave wages. Even on a site like above I bet it’s not the bottom of he bell curve doing that work. Like the hipster restaurants around me, I bet it’s hipsters with good genes and educations living in apartments subsidized by their parents and feeling better about being freelancers because it sounds better then dead end job.
None of these problems is an inherent part of a demanding and appropriately paternalistic Five-Year Plan approved by the Supreme Soviet on the recommendation of the Presidium
welfare programthat requires people to work and disciplines them if they do not. Rather, the problems, as is so often the case with social policy, are functions of the implementation of the reforms. Thus, it is reasonable to at least explore how to impose work requirements similar to those in the TANF program in the SNAP, housing, and Medicaid programs while minimizing the problems that have accompanied the implementation of TANF.We should have a voluntary National Service, which offers everybody a Universal Basic Job – UBJ.
Everybody can “do something”, and everybody should be doing something. Even if it is to take care of newborns or elderly with Alzheimer’s.
Even the disabled can do something, tho it might be limited.
People need work in order to earn for themselves self-respect. Society also needs people to work.
This UBJ should replace all other means-tested gov’t social safety nets.
This can be combined with Choose Your Boss and other schemes, as state or local gov’t orgs try out different ways to minimize the gov’t net cost of paying the almost fixed UBJ cost, while getting the greatest social benefit.
(above cc from Bryan’s UBI note)
The Feds should start with a purely voluntary NS to learn how to handle semi-functional (not fully, nor dis- functional) people who need more active guidance to make good work decisions.