3 ms·

The mobility is there for the taking, though disincentives are at an all-time high. Welfare benefits are structured (presumably unintentionally) to discourage

The mobility is there for the taking, though disincentives are at an all-time high. Welfare benefits are structured (presumably unintentionally) to discourage working: earning about $12/hr plus welfare equals about $36/hr without welfare ... but in between, welfare benefits plummet so fast that trying to work your way up from $12/hr to $36/hr amounts to a huge pay cut. As such many can't or won't make the bridging effort. The proliferation of debt is the other major problem. With social norms & pressures to buy more house & goods than one can actually afford, one becomes self-trapped in preserving an existing paycheck and fulfilling debt maintenance rather than really saving money and taking risks that may temporarily disrupt income. The smart & hard working ones realize up front that climbing a mountain may involve traversing a valley first, and that poor-looking social presence is necessary to accumulate wealth (to be flaunted later). The rest get stalled trying to make credit card interest payments.

ericrav 10y ago
Are you referring to the US? Since we don't have a federal cash welfare program[0], what welfare program are you talking about that gives recipients an additional $24/hr ($50,000 a year if working full time)? [0]: https://fivethirtyeight.com/features/most-welfare-dollars-dont-go-directly-to-poor-people-anymore/ https://fivethirtyeight.com/features/most-welfare-dollars-do...
- jdmichal 10y ago
  Not OP, but my guess would be that such a number would have come from pricing out equivalent services as those being provided. That is, providing discounted housing is not handing out money. But you could take the average discounted rent, and the average non-discounted rent, and come to an approximate cash-equivalent "value" of that discount. Also, I find the direction of the article in your link interesting. That is, given this: > Under TANF, states can spend welfare money on virtually any program aimed at one of four broad purposes: (1) assistance to needy families with children; (2) promoting job preparation and work; (3) preventing out-of-wedlock pregnancies; and (4) encouraging the formation of two-parent families. I'm a little surprised to see this a couple paragraphs down: > In 1998, nearly 60 percent of welfare spending was on cash benefits, categorized as “basic assistance.” By 2014, it was only about one-quarter of TANF spending. That shift has happened despite a burgeoning economics literature suggesting that direct cash transfers are in many cases the most efficient tool to fight poverty. I don't see "fighting poverty" on the list of four things, so I'm not surprised that it got disincentivized.
- ctdonath 10y ago
  It's the proliferation of programs, most of which don't write checks to the individuals but do provide generous coverage & subsidies. EBT (aka "food stamps"), health insurance, "Section 8 housing" ("right" to rent in upscale neighborhoods with capped cost), etc all add up. Details are out there, often reported. https://downtrend.com/robertgehl/welfare-payouts-top-20-per-hour-in-eight-states https://downtrend.com/robertgehl/welfare-payouts-top-20-per-... http://nypost.com/2013/08/19/when-welfare-pays-better-than-work/ http://nypost.com/2013/08/19/when-welfare-pays-better-than-w... The totality of details is too much for a brief casual blog comment, and it may not be exactly so in all cases, but point is there is a substantial drop in welfare benefits above a certain income threshold for given jurisdictions, enough that between about $12-20/hr the decrease in benefits is more than the increase in wages - to wit: the more you earn, the lower your revenue at an economic strata where decreased income is extremely difficult to bridge. ...and that economic barrier to social mobility is an artificial construct instituted by a well-meaning, but deeply misguided, sociopolitical philosophy.
  - frgtpsswrdlame 10y ago
    If your problem with welfare is that it should have no drop off points, what makes that the product of a "deeply misguided, sociopolitical philosophy"? It seems to me more like a problem created by the fumblings of a bipartisan beauracracy.
    - ctdonath 10y ago
      Welfare should absolutely not be structured to cut one's net revenue when one makes the effort to earn more. Methinks welfare, as currently implemented, serves the "something must be done!" industry. Many would work themselves out of a job if "poverty" were eliminated as their goal states, so they keep redefining "poverty" and solving it in ways that generate more of it. The operative philosophy indicated simultaneously addresses manifestations of poverty (via income supplements, rent controls, food subsidies, free services), and aggravates the causes (prohibition of low income[1], strict zoning laws, costly food regulations with diminishing/marginal benefits, undermining low-cost services). Admittedly, a bipartisan system which simultaneously treats government as the solution to, and the cause of, poverty is really going to screw things up. [1] - I find "minimum wage" the modern equivalent of "debtor's prison": if you can't produce enough value, you're prohibited from producing any value at all.
frgtpsswrdlame 10y ago
I disagree and typed out a bit of a longer refutation but I'm honestly more interested in where our disagreement stems from, I think this question might answer that for me: I'm sure that you know people who have high incomes/lots of wealth and who are smart & hardworking. Do you know any older "poor" people (yearly income bottom quintile <$21,000, second quintile < $41,000) who are the same?
- ctdonath 10y ago
  Feel like I'm walking into a trap here. Myself being near a half-century, I've watched the development of minimum wage, wage-limited welfare, and easy credit. As such, I have to observe that older people (of whatever income) have mostly lived their earlier low-wage years without those two institutionalized traps, managing to work up their income past that $12-36/hr (inflation adjusted) gap before it appeared, and acquired most of what they're going to acquire (non-consumables) with cash or have long paid off major debts. As such, they had more natural socioeconomic mobility, and regardless of income most retired into a scenario where income can be very low while maintaining a quite comfortable existence - ergo pegging them as bottom/second quintile can be quite misleading, as contrasted with the otherwise presumed "growing family" that does desperately need income & mobility. To wit: those elderly I know who likely have such low incomes likely own their homes etc outright, know how to live well on a frugal income, avoided/eliminated debt, and are in a position to choose to cut their own income to maximize net revenue (extreme ex.: the "millionaire on food stamps" cases, rich but currently no earned income).

ericrav 10y ago

Are you referring to the US? Since we don't have a federal cash welfare program[0], what welfare program are you talking about that gives recipients an additional $24/hr ($50,000 a year if working full time)? [0]: https://fivethirtyeight.com/features/most-welfare-dollars-dont-go-directly-to-poor-people-anymore/ https://fivethirtyeight.com/features/most-welfare-dollars-do...

jdmichal 10y ago
Not OP, but my guess would be that such a number would have come from pricing out equivalent services as those being provided. That is, providing discounted housing is not handing out money. But you could take the average discounted rent, and the average non-discounted rent, and come to an approximate cash-equivalent "value" of that discount. Also, I find the direction of the article in your link interesting. That is, given this: > Under TANF, states can spend welfare money on virtually any program aimed at one of four broad purposes: (1) assistance to needy families with children; (2) promoting job preparation and work; (3) preventing out-of-wedlock pregnancies; and (4) encouraging the formation of two-parent families. I'm a little surprised to see this a couple paragraphs down: > In 1998, nearly 60 percent of welfare spending was on cash benefits, categorized as “basic assistance.” By 2014, it was only about one-quarter of TANF spending. That shift has happened despite a burgeoning economics literature suggesting that direct cash transfers are in many cases the most efficient tool to fight poverty. I don't see "fighting poverty" on the list of four things, so I'm not surprised that it got disincentivized.
ctdonath 10y ago
It's the proliferation of programs, most of which don't write checks to the individuals but do provide generous coverage & subsidies. EBT (aka "food stamps"), health insurance, "Section 8 housing" ("right" to rent in upscale neighborhoods with capped cost), etc all add up. Details are out there, often reported. https://downtrend.com/robertgehl/welfare-payouts-top-20-per-hour-in-eight-states https://downtrend.com/robertgehl/welfare-payouts-top-20-per-... http://nypost.com/2013/08/19/when-welfare-pays-better-than-work/ http://nypost.com/2013/08/19/when-welfare-pays-better-than-w... The totality of details is too much for a brief casual blog comment, and it may not be exactly so in all cases, but point is there is a substantial drop in welfare benefits above a certain income threshold for given jurisdictions, enough that between about $12-20/hr the decrease in benefits is more than the increase in wages - to wit: the more you earn, the lower your revenue at an economic strata where decreased income is extremely difficult to bridge. ...and that economic barrier to social mobility is an artificial construct instituted by a well-meaning, but deeply misguided, sociopolitical philosophy.
- frgtpsswrdlame 10y ago
  If your problem with welfare is that it should have no drop off points, what makes that the product of a "deeply misguided, sociopolitical philosophy"? It seems to me more like a problem created by the fumblings of a bipartisan beauracracy.
  - ctdonath 10y ago
    Welfare should absolutely not be structured to cut one's net revenue when one makes the effort to earn more. Methinks welfare, as currently implemented, serves the "something must be done!" industry. Many would work themselves out of a job if "poverty" were eliminated as their goal states, so they keep redefining "poverty" and solving it in ways that generate more of it. The operative philosophy indicated simultaneously addresses manifestations of poverty (via income supplements, rent controls, food subsidies, free services), and aggravates the causes (prohibition of low income[1], strict zoning laws, costly food regulations with diminishing/marginal benefits, undermining low-cost services). Admittedly, a bipartisan system which simultaneously treats government as the solution to, and the cause of, poverty is really going to screw things up. [1] - I find "minimum wage" the modern equivalent of "debtor's prison": if you can't produce enough value, you're prohibited from producing any value at all.

frgtpsswrdlame 10y ago

I disagree and typed out a bit of a longer refutation but I'm honestly more interested in where our disagreement stems from, I think this question might answer that for me: I'm sure that you know people who have high incomes/lots of wealth and who are smart & hardworking. Do you know any older "poor" people (yearly income bottom quintile <$21,000, second quintile < $41,000) who are the same?

ctdonath 10y ago
Feel like I'm walking into a trap here. Myself being near a half-century, I've watched the development of minimum wage, wage-limited welfare, and easy credit. As such, I have to observe that older people (of whatever income) have mostly lived their earlier low-wage years without those two institutionalized traps, managing to work up their income past that $12-36/hr (inflation adjusted) gap before it appeared, and acquired most of what they're going to acquire (non-consumables) with cash or have long paid off major debts. As such, they had more natural socioeconomic mobility, and regardless of income most retired into a scenario where income can be very low while maintaining a quite comfortable existence - ergo pegging them as bottom/second quintile can be quite misleading, as contrasted with the otherwise presumed "growing family" that does desperately need income & mobility. To wit: those elderly I know who likely have such low incomes likely own their homes etc outright, know how to live well on a frugal income, avoided/eliminated debt, and are in a position to choose to cut their own income to maximize net revenue (extreme ex.: the "millionaire on food stamps" cases, rich but currently no earned income).