Human Events Blog

“Poverty” pays better than middle-class employment

I have long maintained that the critical problem with the American welfare state is not “makers vs. takers,” but rather makers who are also takers.  A prosperous free society can afford safety-net programs for the truly impoverished, and the citizens of such a society are going to insist on funding one.  The great danger of the classic welfare model is that the “safety net becomes a hammock,” by eroding the work ethic of those who spend generations within it.  This can inflict horrendous damage on the lower echelons of society – look at what happened to the supposed beneficiaries of the Great Society – but the rest of the national economic structure can survive it.  The political will to reform bloated and corrupt welfare programs can still be marshaled.

An out-of-control classical welfare state can cost a lot of money, and it can mess up poor families for generations, but it’s still fairly distinct from the rest of society.  And it should be, for both practical and moral reasons.  We can all agree that the only “happy ending” for any given welfare recipient is a return to the productive middle class, right?  Even the vast majority of liberal American voters would say that’s the desired outcome.

But classical welfarism has mutated into something far more insidious and dangerous.  It is the great project of the organized political Left to destroy the “middle class” they pretend to venerate, by infecting it with government dependency.  The true hardcore leftist hates the middle class, because it combines numerical voting strength with independence.  It has good reasons to resist collectivism, and the political power to do so.  This hard-Left hatred is so intense that it frequently spills over into mainstream liberal culture, where it is generally fashionable to express sarcastic contempt for the middle-class lifestyle, or conflate middle-class identity with sheltered, arrogant, insensitive “whiteness.”

When you hear a leftist praise the “middle class,” he’s not talking about the same thing most of us think of when we hear the term.  We still associate middle-class living with financial independence and professional success.  When a leftist talks about the middle class, he means someone who has a job and depends on government benefits.  The desired outcome is the fusion of paycheck and welfare check; takers who are also makers.  This allows the collectivist to harvest two types of power from the same vast group of people: confiscation of income through taxation, and direct control through the manipulation of government benefits.  Socialized medicine is generally the endgame for the Western Left in any given country, because it moves the political center of gravity permanently and irrevocably to the far Left.  It becomes politically impossible to run against the welfare state at that point; you can only ask voters to give you a turn at the controls, with promises to run the machine a bit more efficiently.

But even with medicine only partially socialized in America, the Left is already well along on its project to transform the middle class.  As ZeroHedge warns – and not for the first time – the lower ranks of the middle class have become virtually indistinguishable from welfare-dependent poverty.  Food Stamp Nation has made it possible for a minimum-wage earner to have more disposable income than someone earning sixty grand a year:

Exactly two years ago, some of the more politically biased progressive media outlets (who are quite adept at creating and taking down their own strawmen arguments, if not quite as adept at using an abacus, let alone a calculator) took offense at our article “In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year.” In it we merely explained what has become the painful reality in America: for increasingly more it is now more lucrative – in the form of actual disposable income – to sit, do nothing, and collect various welfare entitlements, than to work.

This is graphically, and very painfully confirmed, in the below chart from Gary Alexander, Secretary of Public Welfare, Commonwealth of Pennsylvania (a state best known for its broke capital Harrisburg). As quantitied, and explained by Alexander, “the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045.

This is Secretary Alexander’s chart.  As ZeroHedge notes, it tracks very closely with a similar chart published by the Congressional Budget Office.

The “welfare cliff” is far more dangerous than the “fiscal cliff” everyone is talking about these days.  The welfare cliff nullifies the stated purpose of the social safety net – which, as noted, is recognized by most of the voters in all political parties.  Dependency has become inescapable for too many people.  The rational incentives for climbing out of that safety net have been removed, and it reaches well into what earlier generations would have called “the working poor,” rather than “welfare dependents.”  There is simply no logical reason for someone on the wrong side of this cliff to climb over it, barring a remarkable turn of fortune that vaults them from the minimum wage to over $60,000 per year in a single mighty bound.

This problem is particularly acute when the benefits piled up into that formidable cliff face are regarded as effectively “cost-free” by the beneficiaries.  They simply do not believe that anyone suffers or sacrifices to provide the funding for those benefits.  They think it’s all paid for with pennies skimmed from paychecks, idle loot confiscated from greedy fat cats who will never miss it, and money printed in the basement of the Treasury.  Even the healthy degree of shame afforded by reliance upon private charity is removed, when benefits become “entitlements” dispensed by a soulless, impersonal bureaucracy.  A lot of this stuff just shows up in your mailbox.  And one of the crucial truths “compassionate” liberals have never accepted is that shame is an indispensable component of responsibility.  Shame is a species of guilt, after all, and only the responsible are capable of feeling guilty.

The corporate welfare being ladled out at the upper end of the income scale is nothing to sneeze at, either.  It also produces a form of dependency, in which political connections become one of the most vital components of “business” success.  It’s not about clearly-defined groups of “takers” versus “makers” any more, and it hasn’t been for a long time.  As ZeroHedge notes by way of a chilling conclusion, there are about 110 million Americans currently employed in the private sector… versus 88 million welfare recipients and government workers.  That’s a ratio of 1.25 private employees for every government employee and dependent.  That is not sustainable, and it’s getting worse.  Things fall apart; the center cannot hold; mere anarchy is loosed upon the world.

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