the safety net as hammock hypothesis
Matthew Yglesias reports another dramatic study providing evidence against the safety net as hammock hypothesis. The argument that just giving poor people cash helps in the short run but hurts in the long run by creating dependency is extremely influential. The evidence supports the opposite conclusion.
Here I note Yglesias noting Moises Velazquez-Manoff noting another study.
here’s a great writeup from Moises Velazquez-Manoff of a study of an unconditional cash transfer program related to a casino gambling windfall along the Cherokee that suggests yes it can:
[J]ust four years after the supplements began, Professor Costello observed marked improvements among those who moved out of poverty. The frequency of behavioral problems declined by 40 percent, nearly reaching the risk of children who had never been poor.
Yglesias also mentions that
the best evidence we have shows a large positive impact of welfare checks on life outcomes for kids who benefitted from the pre-Depression version of cash assistance for poor single moms
He didn’t mention the evidence that, in the very long run, food stamps reduce obesity and increase high school graduation rates.
Or the genuinely experimental evidence (I am tempted to type proof) that welfare reform kills people.
I wonder if the flood of excellent empirical work might have some effect on the policy debate. I know this is naive, but I don’t think it’s crazy. Pundits have noticed that the USA is no longer the land of opportunity with low inter-generational income mobility. I think there is a chance that they will discover that the indirect behavioral benefits of cash assistance outweigh the indirect costs.
Although, I believe safety nets, and labor standards, can improve society, if welfare, or the War on Poverty, didn’t destroy black families, what did?
HOW THE WELFARE STATE HAS DEVASTATED AFRICAN AMERICANS
“The out-of-wedlock birth rate among African Americans today is 73%, three times higher than it was prior to the War on Poverty. Children raised in fatherless homes are far more likely to grow up poor and to eventually engage in criminal behavior, than their peers who are raised in two-parent homes. In 2010, blacks (approximately 13% of the U.S. population) accounted for 48.7% of all arrests for homicide, 31.8% of arrests for forcible rape, 33.5% of arrests for aggravated assault, and 55% of arrests for robbery. Also as of 2010, the black poverty rate was 27.4% (about 3 times higher than the white rate), meaning that 11.5 million blacks in the U.S. were living in poverty.”
A lack of upward mobility. If you are born into the lowest quintile, you are more likely to remain there. If you manage to ratchet up a rung or two, you are more likely to slip backwards. The probability in either case is higher for minorities than it is for Caucasians. . Why are you picking on African Americans?
A short read for you as written by a prison psychiatrist, Dr. James Gilligan. “Violence: Reflections on a National Epidemic” The paperback version costs ~$12.00 on Amazon. But there is more to this than your open ended comment and I suspect you already know the answers. Ghandi and John Adams also had statements on poverty and its impact on people. You can google both of the people.
It’s not the giving of financial support that has harmed the African American population disproportionally (though whites are catching up, I doubt will equal the level but maybe) it’s the lack of options beyond just the financial support to sustain life that is the problem.
With the loss of blue collar pay at levels to put a person into the lower end of the middle class, the loss of the option to become a self employed member of the retail sector which also was a path into the middle and higher the future for those on “welfare” is basically becoming one of stasis. Which of course feed right into the hand of those who say welfare breeds dependence.
Keep in mind, as the effort was put into reducing poverty simultaneously was an effort to move our economy from a producer economy (labor economy) to what we have today, a financialized economy.
Ironically, a financialized economy works best for those who have money in the form of excess dollars. That is dollars beyond the moment of autonomous consumption. We’re producing fewer of those kinds of people everyday.
Daniel, how does that explain fatherless black families? What about the opportunity cost of giving away trillions of dollars in handouts, paid for mostly by the employed “masses” or “middle class.”
If a woman has a choice of $30,000 in free benefits (e.g. low income housing, a monthly check, Medicare, food stamps, etc.) for not working and being a single mom, or a $30,000 full-time job, she may not like much, being a married mom, I wonder which she would choose 🙂
“If a woman has a choice of $30,000 in free benefits (e.g. low income housing, a monthly check, Medicare, food stamps, etc.) for not working and being a single mom, . . . ”
Cite, please. I’m particularly interested in the number of single mothers currently receiving Medicare. But I’d also see how you get these numbers to add up to $30K/yr.
Medicare? I am interested also.
“But I’d also *like to* see . . . “
Joel, my statement is a generalization why there may be so many black single moms.
Here’s an article:
In many states, welfare can pay better than an honest day’s work
August 21, 2013
“A combination of food stamps, temporary cash grants, WIC, and housing assistance is worth a pre-tax value more than $30,000 in 16 states.
All told, the federal government spent $668 billion on those programs last year, according to the report, which also took into account $284 billion worth of welfare spending at the state level.”
Much of that is taken from a Cato study. To get to $30,000 annually, you would have to be making ~$14/hour. What state has minimum wages at that level?
“A combination of food stamps, temporary cash grants, WIC, and housing assistance is worth a pre-tax value more than $30,000 in 16 states.” Here, a little Josh Barro in answer to this:
In states such as Michigan, if you are not working and have children, you can qualify for assistance; but, the bar is set a lot lower to qualify and often times is <50% FPL for adults.
The issue is still job creation and meaningful wages.
All told the federal government spent ~$720 billion on Defense (2011) including two unfunded wars.
Bankers and Wall Street seem to do VERY well on welfare. Other than stealing from the whole world they seem to be fairly crime free (well except for the mortgage fraud and Madoff type pyramid scams too).
“In many states, welfare can pay better than an honest day’s work”
Well how do you like that? That is exactly my point. Which also coincides with the data Robert is discussing in his post.
Of course you need to get into the psychology of poverty, family dynamics, lack of opportunity etc.
Or we can just let these people starve in a jobless recover in which the majority of the jobs being created will not sustain a family above or even at autonomous consumption level. This is even with 2 jobs.
It seems, the U.S. is spending about $700 billion a year to fight poverty. So, why has poverty, fatherless families, and crime skyrocketed for blacks. Wasn’t the War on Poverty to help blacks and other disadvantaged groups?
The irrefutable fact demonstrating the silliness of the safety-net-as-hammock theory is that the unemployment rate dropped below 4% in 2000 and the involuntary part-time rate was very low. The safety net was there then, too, but when full-time jobs were plentiful, those supposedly lazy people took them. Why do we take such sheer idiocy seriously. It should be a case of “cause” bringing forfeiture of tenure.
People want something to do, and they want to be paid more for it than simply staying out of near-starvation poverty. Duh!
Yes, employment, with decent wages, will lift people out of poverty, not lasting, frequent, or generous welfare.
Actually, government spends over $900 billion a year on anti-poverty welfare. So, it seems, poverty is at a high level.
Examining the Means-tested Welfare State: 79 Programs and $927 Billion in Annual Spending
May 3, 2012
The governmental safety net has three basic components: 1) Social Security and Medicare for the elderly; 2) unemployment insurance and worker’s compensation; and 3) anti-poverty or means-tested welfare programs.
The means-tested welfare system consists of 79 federal programs providing cash, food, housing, medical care, social services, training, and targeted education aid to poor and low-income Americans.
In FY 2011, federal spending on means-tested welfare came to $717 billion. State contributions into federal programs added another $201 billion, and independent state programs contributed around $9 billion. Total spending from all sources reached $927 billion.
According to the President’s FY 2013 budget plans, means-tested welfare will not decline as the recession ends but will continue to grow rapidly for the next decade. Under Obama’s budget, total annual means-tested spending will be permanently increased..Combined annual federal and state spending will reach $1.56 trillion in 2022.
Since the beginning of the War on Poverty, government has spent $19.8 trillion (in inflation-adjusted 2011 dollars) on means-tested welfare.
If the War on Poverty was designed to reduce poverty, why is poverty so high, and much higher in the black community?
It seems, the poverty rate was falling sharply before the War on Poverty was enacted and expanded:
Given over $900 billion a year of spending on poverty, why hasn’t the poverty rate declined?
Math is not this hard.
Most people can’t do the equations in economics. However, accountants get many different answers.
You really do not give up do you Peak? Everyone of your talking points has been answered, but you keep repeating them. The poverty rate has increased in recent years–after falling dramatically in the 50’s and 60’s (although mostly because of social security and medicare) because of GOP–conservative policies–which have hurt the economy and continue to hurt the economy at the same time as government assistance to the indigent has been curtailed–first under Clinton and more recently by the cuts to SNAP, the sequester and the failure to extend unemployment. As to your racial observations, I suspect that you would find that the rate of single mothers among the non black population has also increased since the 60’s–they even did a tv show about it as I recall which vice president Quayle did not like. Of course the GOP like the Taliban prefer to keep women in subservient roles. That societal changes has had a bigger impact on the African American community is likely traceable to crack cocaine and the disproportionate rate of incarceration of black males for non violent crimes. There is a good chance that meth and heroin will help even out those rates in the future.
Terry, blaming Republicans and declaring racism don’t explain why the very expensive War on Poverty slowed the steep fall in the poverty rate and then maintained a high level of poverty.
I agree, there may be a connection between poverty-drugs-crime-jail. So?
And, these don’t look like “non-violent” crimes:
“In 2010, blacks (approximately 13% of the U.S. population) accounted for 48.7% of all arrests for homicide, 31.8% of arrests for forcible rape, 33.5% of arrests for aggravated assault, and 55% of arrests for robbery. Also as of 2010, the black poverty rate was 27.4% (about 3 times higher than the white rate).”
Well, accountants do get different answers, but only if they add different numbers. Including numbers that are not specifically aid to the poor to the cost of fighting poverty is dishonest. Rector knows all about it.
It is like people making “points” on taxes by just adding up the highest marginal tax rates. They are dishonest.
You’re arguing, not debating, with a sock puppet. We’ve heard from this jerk before. He or she is using the sobriquet PeakTrader, but has gone by other names before. Terry has pointed out the obvious, but that has no effect on a trolling sock puppet. In fact it is the puppet who is affecting the direction of the conversation. Tell a lie, be corrected, tell the same story again, and again. This is not an exchange of ideas. This is an obfuscation of the original intent of the thread, to discuss the myth of the safety net as hammock. In fact it is less a myth than it is an intentional distortion of the facts of economic life.
Note that PT offers no data supported evidence with his comments. Numbers are being picked out of the air. Or is it his ass? Had it not been noticed that he includes Social Security as a segment of the “safety net”? The beneficiaries had paid into the system throughout their working lives. Suddenly their benefits are described as welfare. Peak Trader is a scam artist at best.
Jack, PeakTrader is the only username I’ve used, for at least five years. Unfortunately, there are biased sources. However, I’ve tried to find unbiased data, which some of it can be in biased sources.
Obviously, you’re trying to fool people into believing things about me that aren’t true.
If I popped your delusions, that’s tough. The data indicate the trillions of dollars government spent on poverty hasn’t reduced the poverty rate for decades.
What ever amount is spent on a poverty program is not generally intended to end poverty, but to ameliorate the worst manifestations of poverty. To the extent that reducing the sting of poverty helps to raise the impoverished person out of the doldrums of their poverty, that is the extent to which the program may help to reduce the future of poverty.
Nor does corporate welfare reduce poverty. Nor do most corporate sponsored initiatives of any kind reduce poverty. Only better levels of pay and reduced unemployment might reduce poverty. Said another way, only the alleviation of worker exploitation will help to reduce poverty. But until those efforts result in less poverty we need to assist the impoverished by diminishing to the greatest extent possible the immediate and on going pain of poverty.
So, the government spends over $900 billion, or whatever hundreds of billions of dollars a year you want to use, on the War on Poverty and doesn’t reduce poverty.
Maybe, it’s not very effective.
Now it is $900 billion after I cite how many billion for defense?
Rescuing the American Dream: Culture’s Power to Reduce Poverty
Peter Wehner, Ethics and Public Policy Center – August 22, 2011
“The “Success Sequence:” Graduate from high school, get a job, get married, and then have babies.
Children who are raised in broken families are far more likely to drop out of high school, use drugs, commit violent crimes, have children outside of marriage, develop mental health problems, become homeless, drop out of the labor force, go on welfare, and experience poverty. Indeed, the poverty rate for single-parent families is almost six-times the rate for married-couple families.
“The best anti-poverty program for children is a stable, intact family,” according to former Clinton administration officials William Galston and Elaine Kamarck.
More than 40 percent of all births today are out-of-wedlock. America has the highest divorce rate in the Western world. By the age of eighteen, over half of American children have lived apart from their fathers for a significant portion of their childhood.”
In the 50′-60’s THE TAX RATE was 91% on the most wealthy. The WEALTHY hid that money by PAYING good wages and investing in American economy. Black People were left out of the loop, thus, The War On Poverty.
TAX THE RICH and JOBS will appear and poverty lessen.
You are pathetic. You cite the results of poverty as the causes of poverty. You cite the costs of poverty amelioration programs without evidence to support your numbers. What ever the cost may be of all such programs those costs would be reduced significantly by government action that reduces worker exploitation. Genuine anti-poverty pain programs are in a too real sense actually corporate payroll supplements. Walmart in particular is notorious for the needs of its employees to receive government assistance, especially in the form of food stamps.
As noted previously, poverty is eliminated by good pay and low rates of unemployment. That’s the responsibility of corporate America and that sector has dropped the ball. Better pay for employees is the first step. With better pay comes increased consumer activity which in turn leads to the need to increase production and thereby employ more workers which in turn increases consumption.
Jack, obviously, you have a comprehension problem. I didn’t cite poverty as the cause of poverty. The data reflect government spending on poverty hasn’t reduced poverty, and poverty may be caused, at least in part, by unstable broken families.
Over the past 40 years, real income has doubled, government has mushroomed, and spending on poverty exploded. Yet, the poverty rate is the same.
Corporate America is not responsible for your behavior or choices. Why continue to squander trillions of dollars on programs that haven’t reduced poverty or just maintained poverty?
It would seem that money can be better spent to actually reduce poverty, which should be the goal of anti-poverty programs.
Not quite sure how this discussion with PeakTrader didn’t mention (as for instance PK has)
Peak Trader, ” I didn’t cite poverty as the cause of poverty. The data reflect government spending on poverty hasn’t reduced poverty, and poverty may be caused, at least in part, by unstable broken families.”
“By unstable broken families”? Do you mean those broken families that are the result of something other than poverty? Are you serious with that statement? You just proved my point, and you seem not to realize the meaning of your own words. While you’re at it consider that the impoverished have not the resources to go on to college, or in many cases even finish high school. The impoverished live in areas that all too often have been forgotten by local and state governments that provide little in the way of real educational opportunity. The impoverished often go to bed hungry for lack of enough to pay for enough food for the family. The impoverished often live in the least desirable housing. Etc., etc. Yes, the result is often an unstable home life that may increase the likelihood of family disintegration which in turn may increase the likelihood of remaining in poverty. It does become a vicious cycle.
And, “Over the past 40 years, real income has doubled, government has mushroomed, and spending on poverty exploded.” Let’s take a look at the first phrase of that claim. I suppose it depends on what is meant by real income. Most people might assume that real income is that which has been adjusted for inflation. Let’s read the first table in the 2012 Census (http://www.census.gov/prod/2013pubs/acsbr12-02.pdf)
since 2000. Look at the top of the chart. It’s easy to find. Low and behold inflation adjusted median household income for the US had fallen by 6.6%. Since 1975 nominal household median income could be said to have quadrupled from about $10,531 to $50,090, according to
http://www.davemanuel.com/median-household-income.php, who notes that his table is based on, “The U.S. Census Bureau currently publishes median household income data from 1967 until present day.”
However, when inflation adjusted income numbers are used we find that from 1975 that same measure of household income has risen by only 9.4%, over a forty year period. Unfortunately for those average (median) households the Census CPI data show a 400% increase over that same forty year period. http://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-changes-from-1913-to-2008/
Peak, get your head on straight and stop the obfuscation and out right distortions.
In reply to Reason:
I don’t know the man’s (Wm. J. Wilson) work, but there is an interesting and informative comment on the Amazon.com site for the book.
“From Library Journal
This eminent sociologist has written a complex and provocative analysis of black inner-city poverty. Eschewing both liberal and conservative orthodoxies, Wilson argues that the substantial increase in urban poverty over the past few decades has not been caused by either contemporary racism or an internalized “culture of poverty” value system. Rather it has been the result of major shifts in the economic system, as jobs have left the urban manufacturing sector for a decentralized service sector. Because race-specific policies like affirmative action have tended to benefit the black middle class, only holistic policies available to all Americans who need them can reverse this cycle of poverty. Massive job training programs and more child care would provide a start. Highly recommended for major public and college libraries.”
The English edition:http://www.amazon.com/The-Truly-Disadvantaged-Underclass-Public/dp/0226901319
As Prof. Wilson says, when you ship out all the decent paying jobs and leave only exploitation industries to pick up the slack you increase poverty. To reduce poverty that trend has to be reversed. As I noted above, good wages and less unemployment are the best routes to reducing the numbers of the poor. In the mean time it will be necessary for the government to provide the assistance needed by the poor to feed their children and keep them in a reasonably safe and comfortable home environment.
Jack, you’re responding to your statements, not mine. So, I’ll try to make my statements even more simple for you.
While real income doubled, government grew faster than income, and spending on poverty grew faster than government, the poverty rate remained the same.
Maybe, government spending on poverty created a net increase in poverty. Afterall, the real economy is much larger and real spending on poverty is much higher. Yet, the poverty rate didn’t shrink.
This chart shows per capita real income doubled, since the mid-1960s. Output = GDP = Income:
Peak Trader, “Jack, you’re responding to your statements, not mine.”
I’ve quoted from your comment and criticized those quotes. I’ve provided supportive data for the points I’ve made in those criticisms. And you’ve responded with a little more bullshit. That’s typical.
Then you go on to discuss per capita GDP as though it were the same as median household income. You’re either an ignorant person or you are attempting to distort the facts of the issue. Here’s a brief description of the difference between the two as presented several years ago by Mark Thoma in the process of discussing the same issue.
“Slow Income Growth for Middle America, by Lane Kenworthy:
The economic challenges and strains facing middle-class Americans are likely to get a good bit of attention between now and election day, at least from the Obama campaign. They include sluggish income growth, heightened financial insecurity, rising health care and college costs, and falling home values. Each of these is important, but the most critical in my view is slow growth of incomes.
The following chart tells the story.
It shows inflation-adjusted GDP per capita and median family income from 1947 (the earliest year for which the income data are available) to 2007. To facilitate comparison of the over-time trends, each is indexed to its 1973 level. Since the mid-to-late 1970s, growth of income at the median has been slow — very slow — relative to growth of the economy. The current decade, with no improvement at all in median income, is especially striking”
Per capita GDP is an macro measure and its rising should have resulted in rising household income. it did not. The improvements in the economy went north to the One Percenter’s Club members. It left the rest of the 99% behind. Yes, some form of government intervention would be warranted.
Jack, don’t play cute little games with me. You responded to your own comments, while dismissing mine, and then criticized me for your comments.
I guess, you just want more spending on poverty, regardless of effectiveness. Blindly throwing money at a problem can make it worse, and there’s an opportunity cost.
Anybody who seriously believes there are single moms on Medicare deserves to be ignored.
Smarter trolls, please.
Well, if we take Peak/Heritage/Rector’s numbers seriously(of course, only an imbecile would do that) then add them to how poverty is measured, we have to conclude that poverty in the US has been eliminated. And done so by government programs.
Course, Peak is not at all interested in poverty, so nothing will change. But now he can move onto his next fixation, the behavior of different races living in a poverty free America.
My condolences to those who continue to converse with this libertarian cretin. I would rather have hot nails driven into my eyes than discuss anything with him.
I don’t disagree with your sentiment. I’ve got lots of time on m hands and feel that I accomplished something worthwhile even if it was only to encourage PT to say enough to display the total disingenuous character of his comments. Mission accomplished on that score. he won’t even take responsibility for his own words though they appear before all of our eyes just a few steps up the thread. What a jerk he must be.
i wonder, is it possible that PT could be some kind of bot that is programed to give prefixed comments?
Those comments are expected by rigid ideologues, who are in denial, dismissive, dishonest, and delusional.
They make wacko libertarians look open-minded, rational, competent, and witty.
“i wonder, is it possible that PT could be some kind of bot that is programed to give prefixed comments?”
From the reply, it appears the answer is yes. Plenty of alliterative invective, devoid of content.
Smarter trolls, please.
Pulling one’s self up by one’s own bootstraps—Take that gold chain from around YOUR neck, hook it to the silver spoon then tie it to the bootstraps & clench teeth firmly. Works EVERY time.