Posts tagged with: welfare reform

A recent speech by U.S. Senator Marco Rubio laid out what his press office terms “Conservative Reforms for Combating Poverty.” It began well and had a nice line or two emphasizing the role family breakdown plays in perpetuating generational poverty, but then it went all technocratic and wobbly.

So, for instance, at one point he argued that a lack of education is one reason for the decline of marriage among the poor, noting that “64% of adults with college degrees are married, while only 47% of those with a high-school education or less are.” How does he know that being married doesn’t make one more likely to pursue higher education, or that both tendencies aren’t caused by something else? (more…)

Blog author: jballor
Friday, September 27, 2013
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I’m not an aficionado of the show Extreme Couponing, but I have seen it a couple times, and have been amazed at the industriousness of the people on the show. It shouldn’t be surprising, perhaps, that in the midst of economic downturn more generally the practice of clipping coupons has become more widespread as well as more extreme.

It makes sense that when times are tight and you are looking to scrimp and save every penny in your budget that increased use of coupons can be a way to make each dollar stretch a bit farther. Companies originally offered coupons as incentives to try new products, and so it is appropriate to see coupons as a form of advertising. The first company to offer coupons was Coca-Cola, and here we can see the similarities between coupons and the free samples, which is part of what makes Costco so popular, as product promotion.

coca

But it never really occurred to me until I read this short profile of an extreme couponer that coupons should also really be seen as a kind of private welfare, reaching a high of roughly $4 billion in total savings in the US in 2011.
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In 1977 a pro-life Jesse Jackson compared the pro-choice position to the case for slavery in the antebellum South:

There are those who argue that the right to privacy is of higher order than the right to life. I do not share that view. I believe that life is not private, but rather it is public and universal. If one accepts the position that life is private, and therefore you have the right to do with it as you please, one must also accept the conclusion of that logic. That was the premise of slavery. You could not protest the existence or treatment of slaves on the plantation because that was private …

When Jackson prepared to run for president as a Democrat, he dispensed with his pro-life position. I’m convinced this was a grave error, but I sympathize with Jackson’s dilemma. When I was in college, I was frustrated at having to choose between politicians who defended the rights of the unborn (usually but not always Republican) and, on the other hand, politicians who supported abortion rights but who seemed ready to do so much more to help the poor.

I eventually came to see a couple of things that resolved the dilemma for me. First, I realized that a prudential judgment to leave more charitable work in the hands of private initiative was not morally equivalent to choosing not to protect the life of the unborn—was not morally equivalent, in other words, to viewing the matter as “above my pay grade,” as President Obama put it. That is, I came to realize that the decision to neglect the government’s core role of protecting the life of some of its citizens (the unborn) was vastly worse than the decision to push for less government involvement in helping the poor.

The other thing that helped me resolve my love-the-poor/love-the-unborn dilemma—and this came into focus only as I began to connect my good intentions with a study of economic history—was this: The well-intended government poverty programs from the 1960s and ‘70s have had many unintended consequences, consequences that have done much to hurt poor communities over the long-term—whether in inner cities or in places like rural Appalachia. If you believe in the sanctity of all human life, including the life of the unborn, but you hold your nose and support pro-choice candidates who support current or even increased government levels of federal spending on welfare programs, I urge you to watch this six-minute video featuring experienced Christian poverty fighters. It’s entitled “How Not to Help the Poor.”

Watch it. Pray about what you see and hear. Then allow whatever you find insightful there to inform and guide you as you discharge your duty as a citizen of a nation dedicated to the proposition that all humans are endowed by their Creator with certain unalienable rights.

This week’s Acton Commentary. Sign up for our free, weekly email newsletter here. While you’re at it, pick up a copy of Victor Claar’s new monograph, Fair Trade: It’s Prospects as a Poverty Solution, in the Acton Bookshoppe.

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Searching for Meaningful Work: Reflections on the 2010 Economics Nobel

By Victor V. Claar

This year’s Nobel economics prize was awarded to two Americans and a British-Cypriot for developing a theory that helps to explain why unemployment can persist even when job openings are available.

The economics prize is not one of the original awards established by Alfred Nobel’s 1895 will, but is instead a relatively new prize. Established in 1969, the Bank of Sweden Prize in Economic Sciences in Memory of Nobel — its official name — is funded through proceeds from a 1968 donation by Sweden’s central bank.

This year’s winners — Americans Peter Diamond and Dale Mortensen, and British-Cypriot Christopher Pissarides — were honored with the $1.5 million prize for their illumination of the obstacles that may keep buyers and sellers from finding each other in some markets as efficiently as economic theory traditionally predicts.

In some markets — where information is low-cost and individual buyers and sellers are not particularly unique — parties can quickly find each other and engage in mutually-beneficial exchanges. Any buyer is happy to trade with any seller as long as the price seems reasonable to each.

But in other markets the fit matters more. And, as Diamond’s early work in the 1970s suggested, sometimes fit matters a lot. An extreme example is the “market” for spouses. Because marriage is a lifelong joint endeavor, men and women search extensively for partners with whom their eventual marital union may fully flourish as God intends.

And because searching for just the right person takes time, effort, and perhaps many first dates, plenty of eligible men and women remain single at any given moment. Web sites like match.com and eHarmony are popular with singles because those sites help reduce search costs by improving the amount of information available to singles about potential mates.

Diamond, Mortensen, and Pissarides have studied extensively markets with such search costs. When both buyers and sellers are unique, it requires considerable searching for each to find just the right fit. Even in a well-functioning housing market with plenty of available homes, buyers may struggle to find homes they like. So the buyers keep looking.

All three recipients of this year’s prize have carefully extended Diamond’s work to better understand why we may observe persistent unemployment in the labor market even when there are plenty of job openings available, and with interesting policy implications — especially for unemployment insurance programs. Their work shows that more generous unemployment insurance programs will unambiguously lead to longer average unemployment spells: a result with very strong empirical support.

There are two ways to interpret this policy conclusion, and neither is incorrect. On one hand, quite generous welfare benefits may — at the margin — backfire in the sense that they make finding employment less urgent than it would be otherwise, resulting in less search effort by job seekers. This interpretation provided part of the motivation behind the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (the “welfare reform” bill), which shortened the amount of time individuals may receive welfare payments without working. The bill made unemployment look less attractive.

But on the other hand, meaningful work is a gift. God desires that men and women — the only creatures that He made in his image — imitate him through their creative work. Work is our collaboration with God’s creative purposes. Reformers such as John Calvin and Martin Luther stressed the idea, gleaned from Scripture, that every believer is called by God to certain work — a vocation — and has a duty to respond to that call. And John Paul II, in his letter on human labor, observed that work is “one of the fundamental dimensions of [a person’s] earthly existence and of his vocation.” Thus while low unemployment is an important goal, we should not be too quick to put policies in place that force unemployed persons to settle too quickly for jobs that are not a good match. Doing so would deny people the opportunity to pursue their unique callings — ones in which each person can exercise stewardship to the glory of the Creator.

The enduring contribution of this year’s economics Nobel winners will be their suggestion that unemployment insurance alone cannot guarantee meaningful work, and that future policy efforts to reduce unemployment would do better to focus on improving information and reducing search costs, leading to enhanced opportunities for meaning and human flourishing in labor markets. In a recent interview with the Associated Press, Pissarides pointed to the UK’s New Deal for Young People, which directly attaches government assistance to job seeking and training (rather than unemployment per se), as one example “very much based on our work,” he said.

Dr. Victor V. Claar is associate professor of economics at Henderson, the public liberal arts university of Arkansas. He is a coauthor of Economics in Christian Perspective: Theory, Policy, and Life Choices, and author of the Acton Institute’s Fair Trade? Its Prospects as a Poverty Solution.

In 1936 Congress passed the Aid to Dependent Children Act to help widows stay home and raise their children. From 147,000 families on welfare in 1936 the number rose to five million by the 1994, the peak year. Ten years ago today, August 26, President Clinton signed into law the Welfare Reform Act. Last year the number of families receiving welfare had declined to 1.9 million. Contrary to the cries against the bill in 1996, which were numerous, the reform in welfare promoted in a bipartisan manner by President Clinton and the Congress, has generally proven successful.

Various measures of success can be applied to the question of welfare reform. Here are a few. 69% of single mothers are employed today, up from 62% in 1995. In 2000 the number employed actually reached 73%. Another measure of the success of the 1996 Welfare Reform Act is the poverty rate among children. In 1994 the poverty rate among children was 22%, today it is 18%, still much too high I am sure. At the same time there are some numbers that show that we still have a major problem. An average of 1.2 million single mothers a month, who live in homes where there was no wage earner and no Social Security, received no welfare in 2003, up from 700,000 in 1996. Many of these have disabilities, or mental-health and/or substance-abuse problems, reports the Wall Street Journal. (more…)

Blog author: jspalink
Wednesday, August 23, 2006
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Anthony Bradley, a research fellow for the Acton Institute, looks back on the effects of the welfare reform of 1996. Many people criticized this legislation as it was being passed and predicted that the result would be increased poverty. However, the results of the legislation have been overwhelmingly positive.

Poverty, especially amongst single mothers, has declined significantly. Employment among people formerly claiming welfare has increased dramatically. The number of welfare cases has dropped from 4.3 to 1.89 million — that’s more than 50% fewer cases — and poverty has decreased as well! These results cannot be only attributed to economic factors (although a good economy obviously helps poverty). As Mr. Bradley puts it: “When our society provides incentives encouraging work, marriage, family, and accountability—which are central to human dignity—we see people thought to be helpless rise to the occasion.”

Read Anthony’s commentary here.

“I’ve got a bunch of government checks at my door / Each morning I try to send them back / But they only send me more.”

–Nelly Furtado, “Hey Man,” Whoa, Nelly! (Dreamworks, 2000).

Here’s a question maybe our own Karen Woods can address: Does the second phase of welfare reform make it harder for people to get off welfare for good?

That seems to be the implication of this article in today’s WaPo, “Welfare Changes A Burden To States,” by Amy Goldstein.

Having grown up on welfare, Rochelle Riordan had vowed never to ask for a government handout. That was before her hard-drinking husband kicked her and their young daughter out of their house near Lewiston, Maine, leaving her with a $300 bank account, a bad job market and a 15-year-old car held together in spots with duct tape.

Maine’s welfare agency, she heard, was offering help for poor parents to go to college full time. With the state paying for day care and $513 a month in living expenses, Riordan, 37, has been on the dean’s list every semester at the University of Southern Maine, expecting to graduate and start a social work career next spring. But this summer, her plans — and Maine’s Parents as Scholars program — suddenly are on shaky ground; under new federal rules, studying for a bachelor’s degree no longer counts by itself as an acceptable way for people on welfare to spend their time.

A decade after the government set out to transform the nation’s welfare system, the limits on college are part of a controversial second phase of welfare reform that is beginning to ripple across the country. The new rules, written by Congress and the Bush administration, require states to focus intensely on making more poor people work, while discouraging other activities that might help untangle their lives.