Poverty is voluntary, so let's end it

[Earth Walker]

Social programs like welfare merely subsidize bad choices

MEMO
to the
PRIME MINISTER
by Fred McMahon

Fred McMahon is director of the social affairs centre at the
Fraser Institute, a right-wing think tank, and also manages
the Economic Freedom of the World Project.
He has been policy director at the Toronto based Consumer
Policy Institute and senior policy analyst at the Atlantic Institute
for Market Studies.

Poverty in Canada could be virtually eliminated in a generation.
The policy prescription is easy. End welfare. Re-institute poor-
houses and homes for unwed mothers.
That might seem like drastic action, rich in its potential for human
tragedy.
Society would, rightly, reject the prescription, although over time
it would virtually end the disease of poverty, which has afflicted
humanity since the first cities arose.
Never before in human history has a person's future been less
dependent on their past or family station. Never before in human
history has society had the prosperity to offer comprehensive
education to all citizens. Never before has society generated
such wealth or such opportunity for everyone.
All the barriers people once faced -- barriers that could pen
people into poverty -- have disappeared. Yet poverty has not
disappeared, though its nature has change.
Poverty seldom means deprivation of physical necessities as in
the past. This is doubtless the first generation in human history
where obesity is a real health problem for the poor. But poverty,
in a relative sense remains with us.
Why, in a world bounding with possibilities, do so many normal,
healthy people make poor choices that lead to poverty?
Why do so many young people give up on education?
Why, even as unskilled adults, do they allow themselves to get
trapped into a cycle of welfare and low-skill jobs, when dozens
of training programs are available?
Why are others simply unable to hold jobs once they get them?
Why do teenage girls have unprotected sex, when single mother-
hood is almost a certain route to poverty?
Those are questions the policy reformer -- or even the most
radical social activist -- needs to address before prescribing
solutions to the poverty problem. Given all the opportunities each
of us faces, poverty is now largely a voluntary choice.
That statement will infuriate many, but it remains true that
virtually no one growing up in Canada need be mired in poverty
as an adult. Individuals seldom make a clear-cut decision to be
poor. Instead it is usually the collective weight of a number of
decisions: play is more than studying; if I quit school and work I
can have more money than any of my friends; not to mention all
the difficult sexual choices teenagers face today.
Social welfare programs are invariably set up to help people with
today's problems -- welfare for a single mother who can't make
ends meet without government assistance, employment
insurance for a fisherman who needs help supporting the family
during the off-season.
But the long-term consequences of those programs have seldom
been thought out.
What happens as it becomes more acceptable socially and
economically to be a single parent? What happens when the
fisherman's son, instead of staying in school, decides to become
a fisherman himself, subsidized by EI money, even though he
knows the work leads to a dead end? The cycle of poverty is
perpetuated through voluntary choice.
The problem that afflicts social programs is known in economics
as moral hazard -- the idea that a policy meant to guard against
a bad event makes the event more likely. The classic case is fire
insurance. Few shop owners set fires because they have fire
insurance.
Similarly, few teenage girls become pregnant in order to collect
welfare and get their own apartment. But it does happen in both
situations.
Far more typically, moral hazard leads to a slackening of pre-
cautions -- fire alarms with dead batteries, lack of care to avoid
hazardous collections of inflammable materials, and sloppy
electrical insulation.
If fire insurance were outlawed tomorrow, by next week the
number of fires would decline -- at least business fires.
Similar problems afflict social programs. For example, while few
women plan for single motherhood, it still may not seem that bad
a fate to a young girl who wants to get out from under her parents.
Government programs may well appear to promise reasonable
support and independence, provided she becomes pregnant and
moves out of her parents place.
The prospect becomes less worrisome if the girl has grown up in
a society where single motherhood is accepted and even normal.
Precautions become less important.
The safety net makes the consequences of bad choices seem
more tolerable. Anti-poverty programs all too often make poverty
more acceptable and thereby perpetuate it.
Employment insurance, which is now a full-blown social program
in Atlantic Canada, has become a classic case of perverse results.
People treat EI as a right, not as a prop while they are looking
for work.
Abundant studies and anecdotal evidence reveal that most
repeat EI recipients in Atlantic Canada (from where I hail) (and
where he was most likely run out of) believe they have no obligation to seek or to accept work while collecting benefits.
The number of recipients in Atlantic Canada typically exceeds the
region's official unemployment rate.
That may seem improbable but the unemployment rate is
determined by Statistics Canada through a telephone poll in
which only those who are looking for work and are willing to work
are counted as unemployed.
The whole work year in communities throughout Atlantic Canada
is now structured to maximize the amount of EI collected.
Dead-end, low-skill occupations have been subsidized and
preserved by Employment insurance. Skills, education and
training have all been negatively affected.
The EI reforms of 1996, which made the system less generous,
appear to have had a salutary impact. The years young people
spend in school have increased, as has the number of young
people who go on to technical schools, colleges and universities,
a study by Rick Audas and David Murrell found.
But older people, already trapped by the system, have had
little success -- or interest -- in finding year-round work and
improving their prospects. All reform has done is reduce their
income.
And there's the rub. How do you reform a social program without
revictimizing the victims? How do you make single motherhood --
or a life on EI -- something young people will strive mightily to
avoid without penalizing those trapped by the system?
If all welfare programs were ended tomorrow, it would be
catastrophic for those who have become dependent on welfare.
But far fewer people would be poor in the future.
The end of welfare would eliminate the two main routes for the
"inheritance" of poverty -- the welfare culture and single-mother
families. Ending welfare would focus young people on the need
to take responsibility for their own future.
A hundred years ago a flood of immigrants and refugees arrived
in North America from Eastern Europe. They came in dire poverty,
often with no possessions of value at all. Many couldn't speak
English. The educational opportunities for their children were
limited, often because of the need to have the children working.
And much of North American society was suffused with a palpable
prejudice against those immigrants, particularly Jewish ones.
The succeeding generations have prospered mightily. Families
knew there was no free "social assistance" lunch and the path
not just to a better life was through hard work and education.
The obstacles these immigrants -- and millions of others -- had to
overcome hardly exist anymore. Yet poverty continues.
Welfare can't be ended tomorrow, but today is not too soon to
realize we need to break the self-perpetuating rotation of
existing welfare programs and design new programs that won't
trap future generations.
Welfare reform in the United States provides a number of pointers
for the future. It has succeeded in moving millions off welfare.(and
onto the streets, homeless).
More speculatively, it may already be a factor behind the ongoing
reduction in teen pregnancy, though it is far too early to tell its
impact on long-term, deep-seated behaviors; that can take a
generation to change.
But again there's that tradeoff: How do you prevent people from
becoming trapped without creating immense suffering for those
already trapped?
The return to poorhouses and homes for unwed mothers is one
extreme of the tradeoff. In a generation, it would come close to
eliminating poverty, but only at great human cost.
Leaving welfare programs unreformed is the other extreme.
We should no longer tolerate programs that foster and subsidize
bad choices and perpetuate the very phenomena they are
supposed to treat.
Yet many social activist groups have convinced themselves that
people don't have choices and that the only way to decrease
poverty is to increase welfare.
Bad programs don't matter because choice doesn't matter.
That is absurd and only swells the numbers of the poor in the
long run.
Transition policies will be necessary to help people move off
welfare. The purpose of this memo is not to spell out these
policies but rather to encourage the reader to consider the
following controversial points in examining social policy:
*In today's society of great opportunity, poverty is usually a
voluntary choice, though one made when young without under-
standing of the full consequences.
*Social programs perpetuate poverty by limiting the negative
consequences of bad choices and by masking their extent.
*In the future, social programs have to be reformed so they don't
subsidize bad choices.
*Social programs themselves should be structured to alert young
people to the consequences of their choices.
We could virtually eliminate poverty in a generation. The human
costs would be too immense.
But that's no excuse for failing to understand the role anti-poverty
programs play in perpetuating poverty and to use that under-
standing to do better in the future.
(Dubya would love to have this fool on his staff).
(This clown is also advising Gordon Campbell and the LIEberals
on social programs).

This essay was excerpted from End Poverty by Ending Welfare
As We Know It, by Fred McMahon, from the upcoming Memos to
the Prime Minister: What Canada Could Be In The 21st Century,
edited by Harvey Schacter. Copyright 2001 by John Wiley and
Sons Canada Ltd. Excerpted with permission of the publisher.
To order a copy of this book, call 1-800-567-4797 or visit the
Wiley Website at: www.wiley.com


Patriarchy had a specific beginning in history.
It will also have an end.

[Illuminatus]

The article is extreme, but, for the most part, true.

All my family were immigrants at one point, but they worked their little keisters off. Sixty some years after my grandfather and grandmother set foot on this continent as children, I was born to rich, upper middle class parents.

The same story is true for the Irish side of the family, who arrived two or three generations earlier. True, they never became as rich as my jewish progenitors, but they were comfortable, which seems to be typical of Irish culture both then and now -- laid back and comfortable.

Anyone who wants to get ahead - can. Even those earning minimum wage make enough to support themseles, see the occational movie, and have a place to live. If they have a hard time finding work, there are approximately 8 bajillion kazillion programs they can persue to get FREE job training and placement, the least of which is community college. Buying a home may be prohibitive, but a COMFORTABLE life can be achieved.

The primary reason people don't work to achieve a comfortable life in this way... is that they know they already have a comfortable life, courtesy of Uncle Sam. (or aunt canada, or whatever the hell it is you people have up there). Leaving their time free to persue vices, mayhem, crime, whatever.

- Ill

[ladyrowan]

Originally posted by Illuminatus
The primary reason people don't work to achieve a comfortable life in this way... is that they know they already have a comfortable life, courtesy of Uncle Sam. (or aunt canada, or whatever the hell it is you people have up there). Leaving their time free to persue vices, mayhem, crime, whatever.

- Ill

I don't know how much your welfare payments are over there, but i do know that here they're not nearly enough for a 'comfortable' lifestyle.

And most people on benefits are decent, law-abiding people.

BB

[Myst]

Originally posted by ladyrowan
I don't know how much your welfare payments are over there, but i do know that here they're not nearly enough for a 'comfortable' lifestyle.

I happen to know a few people who had to turn to welfare or other government assistance due to unforseen health problems (such as heart failure), including my own parents, so you'll have to excuse me if I think the belief that getting rid of welfare will help those 'lazy' people get a real job instead of "Leaving their time free to persue vices, mayhem, crime, whatever" is pure crap.

And, ladyrowan is right, welfare payments don't give you a 'comfortable lifestyle' to say the least.

[Earth Walker]

He's missing the point.
Corporations are always downsizing and laying off thousands
of people...as well as going overseas to cheaper labour markets;
ergo more layoffs.
There is also the problem with escalating populations...more
people than jobs.
Yes, there may be training programs...but that is a waste of time
if there is not enough work for everyone.
This is why there are millions unemployed and homeless....and
the answer of Dubya...Chretien...Blair, etc., is to give more
grants and tax-cuts to the corporations and the rich while at
the same time, cut social programs...which only increases the
levels of poverty and homelessness.
For example, here in British Columbia, Gordon Campbell and
the LIEberals just got a SECOND pay raise...but there isn't
enough money to pay nurses or bus drivers?
Campbell can give business grants and tax-cuts, but there isn't
enough money for housing, medicare, and other social programs?
What of those people who are disabled and unable to work?

Illumanati, please stand on your feet so that I can be sure that
you are not talking out of your @$$, like Dubya, Chretien,
Campbell, etc.


Patriarchy had a specific beginning in history.
It will also have an end.

[Myst]

Originally posted by Mystique

For example, here in British Columbia, Gordon Campbell and
the LIEberals just got a SECOND pay raise...but there isn't
enough money to pay nurses or bus drivers?
Campbell can give business grants and tax-cuts, but there isn't
enough money for housing, medicare, and other social programs?
What of those people who are disabled and unable to work?

With you on this I sincerely agree.

[ladyrowan]

Sounds like our systems are as bad as each others.


And we get plenty of people here too, with the opinion if you want a job you can get one. They tend to treat anyone on benefits as the dregs of the earth, without a thought as to why those people are in that position in the first place. It can happen to anyone.
I agree there are some who live this way through choice, but the vast majority have no choice at that time.


BB

[Earth Walker]

Originally posted by Willow Raven


With you on this I sincerely agree.

How do you tolerate Mike Harris?
I hope people in Ontario have enough sense to get rid of that
loser....not to mention Ralph Klein in Alberta! :


Patriarchy had a specific beginning in history.
It will also have an end.

[Illuminatus]

Originally posted by ladyrowan


I don't know how much your welfare payments are over there, but i do know that here they're not nearly enough for a 'comfortable' lifestyle.

And most people on benefits are decent, law-abiding people.

BB

America is the only nation where the poor suffer from obesity. THAT'S how draw the conclusion that they are comfortable.

[Illuminatus]

Originally posted by Mystique
He's missing the point.
Corporations are always downsizing and laying off thousands
of people...as well as going overseas to cheaper labour markets;
ergo more layoffs.
There is also the problem with escalating populations...more
people than jobs.
Yes, there may be training programs...but that is a waste of time
if there is not enough work for everyone.

As for the corporations downsizing, for each one downsizing, another is hiring. Growth has slowed to almost 0, but has not gone negative in the US. I support welfare TEMPORARILY. Not for someone's entire lifetime.



This is why there are millions unemployed and homeless....and
the answer of Dubya...Chretien...Blair, etc., is to give more
grants and tax-cuts to the corporations and the rich while at
the same time, cut social programs...which only increases the
levels of poverty and homelessness.

You're missing the point of the entire argument.. -- social welfare DOESN'T HELP. People don't have a motivation to get back on their feet. So they don't.


For example, here in British Columbia, Gordon Campbell and
the LIEberals just got a SECOND pay raise...but there isn't
enough money to pay nurses or bus drivers?
Campbell can give business grants and tax-cuts, but there isn't
enough money for housing, medicare, and other social programs?
What of those people who are disabled and unable to work?

Well I don't know about Canada, so I can't comment. But you wacky socialists have so many goshdarn programs I can't keep track of them all! Doesn't it bug you in the least that you have to wait in line behind the homeless addict getting fresh needles before you can see a doctor?

Illumanati, please stand on your feet so that I can be sure that
you are not talking out of your @$$, like Dubya, Chretien,
Campbell, etc.

Help! Help! Moderators! I'm being abused! You saw 'im oppressin me, didn't ya? <monty python reference>