Michael Strain

The Welfare Debate the US Should Be Having

When Representative Alexandria Ocasio-Cortez first rolled out her Green New Deal, she called on the government to provide economic security to those “unwilling to work.” 1 Conservatives correctly seized on this to argue that the Democratic Party seemed to be moving quite a bit further to the left in its views on economic policy.

The controversy was reignited last week, when first daughter Ivanka Trump rejected a “minimum guarantee” for people who are unwilling to work. Ocasio-Cortez shot back. Expect more volleys to follow.

The political score-keeping aside, the blunder crystallized the issue that experts should be discussing: the relative importance that government policy places on personal responsibility, on the one hand, and economic security, on the other. How do you balance the two?

The bipartisan welfare reform of 1996 changed the system for providing cash aid to the poor by setting the expectation that people receiving assistance should be working. In signing the legislation making these changes, President Bill Clinton said: “Today, we are ending welfare as we know it.”

But the shift in thinking about safety-net policies primarily as tools to help low-income Americans get and keep jobs is not as straightforward as it seems. Some people may be unwilling to work because they lack the very “work supports” — cash, food, housing assistance, medical care and the like — that would enable them to get and keep a job. It’s hard to find a job, let alone keep it, if you don’t have a roof over your head, or the medical care and nutrition necessary to keep you healthy.

There’s a chicken-and-egg problem here. On the one hand, if work supports aren’t tied to work requirements, then they give people an incentive not to get a job. On the other, if they are only available to people with jobs, then they can make it harder for people to move from not working into employment.

Implicit in the argument that people who are unwilling to work have forfeited their claim to economic security is that work is available. But jobs may not always be available, both for people who are willing to work and those who aren’t, particularly during economic downturns. During the Great Recession, there were over six unemployed workers for every job opening.

Another major challenge in weighing the balance between responsibility and economic security is what to do about the hard cases. How should policy handle the situation where a person is truly unwilling to work? Or a person who loses his job and won’t realistically be successfully retrained, but who is a decade away from retirement?

The first step in deciding how much economic security is owed to those unwilling to work is to recognize that this is a question of values. What do those who are relatively well off owe the poor? What, if anything, do the most vulnerable in society owe their neighbors? These questions have no objective answer.

I tend to lean more toward the importance of personal responsibility than economic security. Public policy should not create an entitlement to economic security for all who are unwilling to work. Instead, just as society has obligations to its most vulnerable members to provide a base of security, those who receive assistance also incur obligations to those providing it.

The US safety net often does a decent job of reflecting these values while also being flexible enough to deal with the hard cases and economic contingencies that often arise. Some features of these programs can serve as a model for thinking about how to fix and improve the system overall.

Bloomberg View