Wednesday, October 13, 2004

Welfare Reform

I want to take up a point that Steve raised about welfare reform. (You knew I couldn't be to the right of you forever.) In an earlier post, he wrote:

"What we don't really know how to do is to increase, in a durable way that isn't subject to lots of moral hazard problems, the incomes of non-working adults."

But why are we so concerned about the "moral hazards" of raising the incomes of non-working adults? We raise the incomes of seniors without worrying about such questions. Libertarian conservatives point to all sorts of "moral hazards" in raising incomes of working adults. I'd argue that "moral hazards" move front and center to the public debate when the recipient population is disproportionately black and female. In that respect, the push toward welfare reform was strongly influenced by racism and sexism. Numerous studies, (try Martin Gilens's work, for example) show that white Americans look at welfare through the lens of race. Therefore, to the extent that welfare reform "solved" a problem, it was a problem that only existed if you bought into a certain set of stereotypes and prejudices about race and sex.

Interestingly, even Alan Keyes sees this connection (it is my goal to include some mention of Alan Keyes is every post). As I wrote in an earlier post when he proposed eliminating the income tax for African Americans, he was quickly ridiculed by conservatives. But as Keyes pointed out, conservatives have no problem with tax breaks when they go to a "wealthy corporation."


Evan Roberts said...

"We raise the incomes of seniors without worrying about such questions. Libertarian conservatives point to all sorts of "moral hazards" in raising incomes of working adults."

Not to disagree with the thrust of your argument that race and sex have a bearing on this. However, income assistance for seniors is often predicated on the notion that these people would be supplying less labor to the market anyway, reducing the moral hazard issue.

IIRC the debate in most western countries, including the U.S., when old-age pensions were introduced accepted the premise that the elderly wanted to exit the workforce. 'Conservatives' didn't disagree with that; they suggested the moral hazard problem was that state pensions would reduce saving.

Moreover, now that life expectancy has risen and the physical demands of most jobs have been reduced, the rationale for easing people out of the labor market in their early 60s has waned. We should be hearing a lot more about the moral hazard of paying pensions to people in their early 60s.

If Howard Dean had been the Democratic nominee we can be sure the Republicans would be reminding us he once thought Social Security eligiblity should be raised to 70.

Palooka said...

Well, the objection to affording benefits or penalties on the basis of race is based on the idea that racial classifications are particularly heinous, while other classifications are more benign (tax break for a corporation is the example you cited). Not giving a job to someone because of their race is the same as giving someone a job (or a tax break) because of their race. They are one and the same. In fact, much of Jim Crow was motivated by the desire to help whites, rather than a desire to hurt blacks per se. Is that benign or positive segregation, too?

Palooka said...