There’s another round of arguments brewing over welfare reform (or “workfare” as we used to say in the 90s), this time caused by hints that the Trump administration would begin granting waivers to states that want to impose work requirements on able-bodied recipients of Medicaid. These waivers were all denied under the Obama administration but, as you might expect, things are different now.
These rumors have led Washington Post editorial team member Elizabeth Bruenig to take to her keyboard and make a sweeping argument which goes far beyond the question of workfare. Taking time out to toss an endorsement to her husband’s liberal think tank, Bruenig goes several steps further and asks why it is that people should be expected to do any work at all in order to qualify for government assistance. To justify this argument, the author points out there are plenty of rich people who benefit from the government’s largesse without every doing a lick of market labor (and she’s very careful to make that distinction about work done for an hourly wage or weekly paycheck) so the system clearly isn’t fair. (Emphasis added)
Built into the claim that it’s only fair that poor people should be made to work for welfare are a few troubling assumptions: that poor people don’t or won’t work; that only compensated, market labor is real work; that society (and the state) always require work to precede income; and that each person is due to receive simply what they earn. Each of those is false…
But what about that small number of people who could work but, for whatever reason, don’t? Shouldn’t they have to? Well, before deciding whether it’s morally right for them to receive income without working, consider a far larger group that takes in far more money without toil: the idle rich. They soak up plenty of unearned money from the economy, in the form of rent, dividends and capital income. Salaries and wages — that is, money paid for work — only make up about 15 percent of the income of Americans making $10 million per year or more; the rest is capital income from simply owning assets.
And yet rarely do politicians inveigh against the laziness of the well-off. In fact, the government shells out huge sums of money to the rich every year through tax breaks and subsidies. As Syracuse University professor Christopher Faricy points out in his book “Welfare for the Wealthy,” the federal government is hardly generous with the poor alone. In 2016, for instance, Social Security kept 26.1 million people out of poverty to the tune of $911.4 billion paid out in disability and old-age pensions; during that same year, federal tax subsidies for the pensions of the more affluent totaled $179.9 billion .
That’s enough to make your head spin, although I have to admit that I haven’t read a good rant against, “the idle rich” from a liberal activist in a long time. Before going further I will freely admit that you’ll find a number of complaints in Bruenig’s article which are completely valid topics of debate on their own merits. If you think there are too many carve-outs in the tax code for the wealthy or for businesses, frequently running into the realm of crony capitalism, we should certainly debate removing them. I’m also in favor of means testing for Social Security recipients as one aspect of a much larger and badly needed push for entitlement reform.
But none of that is what the author is actually arguing here. She’s attempting to make the point that the affluent don’t have to “work” in order to receive “benefits” from the government, so why should lower-income Medicaid recipients? It’s difficult to imagine what sort of life journey leads to someone falling down that type of rabbit hole. First of all, it’s deceptive and dishonest to attempt to limit your definition of work to “market labor” as Bruenig does. Wealth is derived from the value you add to the system. For many that means the labor they perform for an employer. But her examples of, “rent, dividends and capital income” are all significant contributors and they also represent very tangible (and frequently sizable) risks that investors make in real estate, stocks or bonds. And nobody is “simply owning assets” to reap vast riches. All those assets had to be acquired, even if by inheritance from someone else who earned them.
And people in such situations aren’t applying for a government program to directly receive a taxpayer funded check every week. The “welfare” she refers to is not “unearned income” simply because the person wasn’t punching a clock. As far as benefits they receive from a generous tax code or Social Security payments when they really don’t need them, those aren’t special programs either, but things which are baked into the system. They may indeed be in need of reform, but none of it is welfare.
Finally, part of Bruenig’s underlying premise (helpfully backed up by her husband’s liberal think tank) is that none of these reforms are needed because almost nobody is actually collecting government benefits without working, right? I would remind you of other reform efforts which have produced data conflicting with hers over the past few years. Remember that, in Maine, they added seriously gentle work requirement for the SNAP program for recipients listed as ABAWDs, or able bodied adults without children between the ages of 18 and 49. As soon as they were required to list all of the income they were getting, participation in the program dropped by 80% in 90 days, saving the taxpayers millions. In Kansas, they instituted a similar workfare package over the outraged cries of liberals. This led to a decrease in participation and more people getting jobs, and a later study showed that those who left welfare saw their earnings increase by 104 percent in one year. In four years, these individuals saw their incomes increase by 247 percent.
There wouldn’t be that many people changing their status so quickly wherever workfare has been implemented if there wasn’t a certain element of gaming the system going on. This entire argument being put forth in the Washington Post is baffling and in conflict with reality and recent history.