Welfare Doesn't Work

The Promises of Basic Income for a Failed American Safety Net

Leah Hamilton

• Publisher: Palgrave Pivot
• Year: 2020
• Print ISBN:
  9783030371203
• eBook ISBN:
  9783030371210
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

This book explores the incentives and effects of modern welfare policy, contrasted with outcomes of global basic income pilots in the past seventy years. The author contends that paternalistic and counterproductive eligibility rules in the modern American welfare state violate the human dignity of the poor and make it nearly impossible to escape the "poverty trap." Furthermore, these types of restrictions are absent from expenditures aimed at middle and upper-income households such as mortgage interest deductions and tax-sheltered retirement accounts. Case examples from the author's years as a front-line social worker and interviews with basic income pilot recipients in Ontario, Canada, are woven throughout the book to better illustrate the effects of the current system and the hidden potential of more radical alternatives such as a universal basic income.

© The Author(s) 2020

L. HamiltonWelfare Doesn't WorkExploring the Basic Income Guaranteehttps://doi.org/10.1007/978-3-030-37121-0_1

Begin Abstract

1. A Tale of Two Ideas

Leah Hamilton¹

(1)

Department of Social Work, Appalachian State University, Boone, NC, USA

Leah Hamilton

Email: [email protected]

Abstract

Since the fall of feudalism in Europe, western governments have implemented minimal and punitive public assistance programs to maintain a delicate balance between preventing revolt and ensuring a steady stream of workers willing to accept meager wages. While advocates throughout history have presented an alternative, the universal basic income (UBI), the inexhaustible need for cheap labor created by agriculture and industrialization has proven an infertile ground for UBI ideals. Rising inequality and automation of the twentieth and twenty-first centuries, however, have created renewed interest in basic income, which may present the solution to ineffective modern welfare policy.

Keywords

WelfareRaceRevolutionBasic income

End Abstract

My first job out of college was as a caseworker for children in foster care with developmental disabilities. I was responsible for ensuring that my clients received appropriate educational accommodations at school and that their foster parents were providing the level of specialized care they required. One 17-year-old boy (I’ll call him “Thomas”) had a severe form of cerebral palsy. He used a wheelchair, had significant intellectual delays, did not speak, or even swallow. His foster parents fed him through a g-tube, which is a port on the outside of the body connected directly to the stomach. Unable to dress, bath, or feed himself, Thomas required around-the-clock support from a full-time caretaker. He was one of five children born to a dedicated, but low-income, single mother (whom I’ll call “Sue”). Because Thomas’ needs were so demanding, making it nearly impossible to hold down a job, Sue essentially had two choices before her. She could raise five children on Thomas’ $750 per month in disability payments and maybe a few hundred more in Food Stamps and Housing Assistance, or she could surrender Thomas to foster care.

When Thomas was inevitably placed in care, his foster parents were granted a significantly higher reimbursement rate than most foster children due to his high level of needs, $3000 per month. I never met his mother, but I can only imagine the guilt a parent would feel at having to make such a decision and maybe also frustration at the inequity of it. Over time, Sue visited Thomas less and less, likely as her way to cope and move on from this impossible situation. As a young social worker, this case was my first clue that something was deeply wrong with our social welfare system. This family was divided, not because it saved taxpayer money, but because modern American social policy is constructed with a suspicious eye toward people in poverty, lest a child like Thomas and his mother seek to “game” the system.

While the American welfare system seems to have reached new heights of political polarization, mistrust of the poor has been a defining characteristic of social assistance and public relief programs for hundreds of years. Rather than providing a “safety net,” Frances Fox Piven and Richard Cloward first described the history of welfare in the Western world as a balancing act between maintaining social order and ensuring a steady stream of cheap labor for industry (Piven & Cloward, 1993). This balance has traditionally been accomplished by expanding the social safety net in times of economic decline and contracting it once again as the economy recovers so that workers are compelled to accept any wages offered. We will return to the relationship between welfare and labor in Chap. 2.

In this chapter, we will focus on the ways that economic change influences social unrest and how leaders have historically responded. At every turn, leaders maintain this balancing act by offering just enough assistance to prevent outright revolution while pushing a narrative that those unwilling or unable to accept dangerous or exploitative employment conditions are sinful, lazy, or both. Alongside this history, a few advocates have proposed that instead of trying to appease the proletariat, we treat all citizens as equally deserving of having their basic needs met, regardless of circumstance, through a regular, unconditional assistance payment, known today as a universal basic income (UBI).

A Very Brief History of Welfare in Early Europe

The fall of feudalism in Europe created rapid social change. Former serfs were displaced and, as is always the case during times of economic upheaval, were not immediately absorbed into some new occupation. Further declining death rates contributed to a population boom, and with insufficient jobs to absorb the sudden increase in workers, many found themselves in abject poverty. Local governments across Europe attempted to control the growing problem of vagrancy with penalties for begging. When simply punishing the poor was insufficient to control the tumult, communities began establishing the double-edged systems of public relief and tight social control, as those in poverty were believed to be prone to idleness and immorality. Lyon, France, for example, instituted cash assistance, but church rectors followed recipients to ensure that benefits were not spent on alcohol or gambling. In England, local authorities registered the poor and provided them with documents which were essentially a license to beg. If anyone was found to be begging without this documentation, they were subject to a public whipping (Piven & Cloward, 1993).

During the European Renaissance, charitable functions slowly began moving from church to state responsibility (in England, it may not be coincidental that much of this movement occurred during the reign of Henry VIII and Elizabeth I, both of whom—for their own reasons—sought to reduce the power of the Catholic church). To more systematically and humanely address the problem of pauperism, the prominent theologists Sir Thomas More, Lord Chancellor under Henry VIII, and Johannes Ludovicus Vives urged governments to provide every citizen with a minimum income, arguing that “no one should die of hunger” (Vives, 2002). More’s Utopia, first published in 1516, is believed by many to be the first introduction of basic income ideas (Standing, 2017).

I once happened to be dining with the Cardinal when a certain English lawyer was there. I forgot how the subject came up, but he was speaking with great enthusiasm about the stern measures that were then being taken against thieves. ‘We’re hanging them all over the place’, he said. ‘I’ve seen as many as twenty on a single gallows. And that’s what I find so odd. Considering how few of them get away with it, how come we are still plagued with so many robbers?’ ‘What’s odd about it?’, I asked—for I never hesitated to speak freely in front of the Cardinal. This method of dealing with thieves is both unjust and undesirable. As a punishment, it’s too severe, and as a deterrent, it’s quite ineffective. Petty larceny isn’t bad enough to deserve the death penalty. And no penalty on earth will stop people from stealing, if it’s their only way of getting food. In this respect, you English, like most other nations, remind me of these incompetent schoolmasters, who prefer caning their pupils to teaching them. Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming, first a thief, and then a corpse. (More, 2003)

However, More and Vives also believed that the poor must be willing to work and prove themselves deserving of aid. This latter notion was adopted wholeheartedly into the Elizabethan Poor Laws of 1601, which separated the poor into categories of “deserving” and “undeserving,” or those who cannot work (e.g., the elderly and disabled) and those who presumably could, but do not work. The Poor Laws provided “outdoor” relief (assistance in the recipient’s own home) for the “deserving,” which included food, clothing, and other essential materials. The “undeserving” were placed in poorhouses and indentured servitude, otherwise known as “indoor relief.” Orphans and the children of the poor were placed in apprenticeships to teach them the “Christian” value of hard work and to prevent them from inheriting their parent’s “idleness” (Jansson, 2014).

It must be noted, of course, that the English elite did not believe that idleness was sinful for them, as most looked down upon any labor among the nobility. But the system of a leisure class required an enormous underclass available to work around the clock (long before the establishment of labor laws) as servants, farmers, and manual laborers. It also required an unlimited supply of soldiers available to die in the frequent skirmishes between European monarchs (Isenberg, 2017). Therefore, it would never do for those born into poverty to believe they had any right to basic security outside of hard work for meager wages.

This balance of scant assistance and social control was more or less maintained until the late 1700s when revolutionary ideas fermented in France and threatened to upend the entire European monarchical economy. An early leader of the French Revolution, the Marquis de Condorcet, proposed free education, gender, and racial equality, and a scheme akin to a basic income (Basic Income Earth Network, 2018). Though he was imprisoned before his ideas could be fully implemented, the French Revolution put fear in the hearts of the powerful across Europe. The English elite worked quickly to prevent such an upheaval in their own country by increasing public relief six times between 1760 and 1818 (Piven & Cloward, 1993).

American Bootstraps

The English spirit of punishment for those believed to be capable but unwilling to work intertwined seamlessly within the Protestant work ethic of early American settlers. Recipients of welfare in the early colonies were required to wear the letter “P” for pauper, could be imprisoned, sold into indentured servitude or slavery, or blocked form marrying (Joseph, 2006). As Americans explored their new land with seemingly endless natural resources, the philosopher Thomas Paine believed that every adult American had a natural birthright to the land and should, therefore, be paid an annual “ground-rent,” funded by taxes on agriculture (Basic Income Earth Network, 2018). But th...

Table of contents

• Cover
• Front Matter
• 1. A Tale of Two Ideas
• 2. From Welfare to Work (In Theory)
• 3. Perverse Incentives
• 4. Assets and Household Stability
• 5. The Lives of Low-Income Women
• 6. A Two-Tiered Welfare State
• 7. The Most Vulnerable
• 8. The Alternative
• Back Matter