Posts tagged with: Trampoline

Blog author: jballor
Wednesday, November 23, 2011
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Over at the Economix blog, University of Chicago economist Casey B. Mullin takes another look at some of the recent poverty numbers. He notes the traditional interpretation, that “the safety net did a great job: For every seven people who would have fallen into poverty, the social safety net caught six.”

But another interpretation might have a bit more going for it, actually, and fits in line with my previous analogy between a safety net as a trampoline vs. a foam pit:

Another interpretation is that the safety net has taken away incentives and serves as a penalty for earning incomes above the poverty line. For every seven persons who let their market income fall below the poverty line, only one of them will have to bear the consequence of a poverty living standard. The other six will have a living standard above poverty.

Of course, most people work hard despite a generous safety net, and 140 million people are still working today. But in a labor force as big as ours, it takes only a small fraction of people who react to a generous safety net by working less to create millions of unemployed. I suspect that employment cannot return to pre-recession levels until safety-net generosity does, too.

The conclusion ought to be that policies that provide incentives for people to not seek out work as vigorously as they otherwise might, even if such incentives are unintended consequences, are morally suspect and economically questionable.

A couple weeks ago I engaged CPJ senior fellow Gideon Strauss in a debate at the Christian Legal Society, “Justice, Poverty, Politics & the State: Is There a Christian Perspective?”

One of the questioners afterward proposed that the large scale of the poverty problem required an institution equally as large, i.e. the government. There are lots of problems with that kind of analysis, not least of which is that the “poor” are not some homogeneous blob of humanity, but individual persons created in the image of God facing unique situations with their own unique gifts and talents. So the scale of the problem, perhaps counter-intuitively, calls not for some behemoth- or leviathan-size institution, but a variety of smaller individuals and institutions that can work with people individually and in communal settings. Think here of a variation on Burke’s concept of “little platoons” in the war on poverty.

Because of the nature of big society/government solutions, what we often end up with, unfortunately, when we seek a large institutional answer to the problem of poverty are safety nets that function not so much as trampolines as foam pits.



Perhaps not so funny when you think about it.