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January 08, 2013

The "Perfect" Social Welfare System

Interesting study in the WaPo attempts to match various social welfare systems to the skill level of the worker and the budget of the paying nation:

Ever since the welfare reform measure passed in 1996, its central tenet — that cash assistance should be dispersed only on the condition that recipients move toward employment — has become a near-consensus in Washington.

But the rule has its critics. The University of Michigan’s Luke Schaefer and Harvard’s Kathryn Edin have found that extreme poverty — families living under $2 a day — shot up after the bill passed, indicating that it pulled the rug out from under a number of very vulnerable people. But there’s also a more general argument to be made that assistance to the poor shouldn’t come with those strings.

A new working paper from economists Nicola Pavoni, Ofer Setty and Giovanni Violante adds some quantitative weight to that critique. They built a model designed to determine the “optimal” welfare system, the one that maximized the utility — that is, happiness, or degree of getting what you want — across the economy.

They compare a number of possible solutions. On one extreme, there’s pure, unconditional cash transfers, in which the government simply distributes money without any requirements to needy persons. On the other, there’s what the authors call “mandatory work”, in which needy people receive public works jobs that they must keep to receive assistance.

But there are a lot of options in between, including unemployment insurance, part-time public works, full-time but temporary public works, and extensive government job search assistance. Which one is best for a given country depends on a number of factors, but the authors focus on two: the skill level of workers, and the amount of money the government has to spend.

We must admit that bolded sentence amused us a bit. We can see several compelling arguments for matching the remedy to the skill of the worker and the willingness of taxpayers to voluntarily give money they've legitimately earned to someone who has done absolutely nothing to earn it.

Sustainability is one - a system where cost matches both public ability and willingness to fund it is more likely to garner and maintain widespread public support than one that ignores both factors. Efficacy/efficiency is another - a remedy designed to help low-skilled workers isn't much help to workers who have marketable skills (and whose unemployment is more likely to be temporary in nature).

But basing public policy on "maximized happiness/utility" (aka utilitarianism) invokes the usual objections to outcome oriented morality:

There are also a number of problems with utilitarianism. One problem with utilitarianism is that it leads to an "end justifies the means" mentality. If any worthwhile end can justify the means to attain it, a true ethical foundation is lost. But we all know that the end does not justify the means. If that were so, then Hitler could justify the Holocaust because the end was to purify the human race. Stalin could justify his slaughter of millions because he was trying to achieve a communist utopia.

The end never justifies the means. The means must justify themselves. A particular act cannot be judged as good simply because it may lead to a good consequence. The means must be judged by some objective and consistent standard of morality.

Second, utilitarianism cannot protect the rights of minorities if the goal is the greatest good for the greatest number. Americans in the eighteenth century could justify slavery on the basis that it provided a good consequence for a majority of Americans. Certainly the majority benefited from cheap slave labor even though the lives of black slaves were much worse.

A third problem with utilitarianism is predicting the consequences. If morality is based on results, then we would have to have omniscience in order to accurately predict the consequence of any action. But at best we can only guess at the future, and often these educated guesses are wrong.

A fourth problem with utilitarianism is that consequences themselves must be judged. When results occur, we must still ask whether they are good or bad results. Utilitarianism provides no objective and consistent foundation to judge results because results are the mechanism used to judge the action itself.

Here's what we liked about the welfare matrix: the inclusion of public works projects. Traveling about the country for the past few decades, we've often marveled at public works projects that came out of the WPA/CCC era. Not having firsthand experience with it, we imagine our view of the WPA is more than a bit rose-colored. But there's something appealing about some of the ideas underlying the WPA. And in addition to teaching skills and requiring work for pay (as opposed to handouts), public works projects benefit the public that funds them as well as the workers employed by them:

The WPA was charged with selecting projects that would make a real and lasting contribution — but would not vie with private firms. As it turned out, the "pump-priming" effect of federal projects actually stimulated private business during the Depression years. The WPA focused on tangible improvements: During its tenure, workers constructed 651,087 miles of roads, streets and highways; and built, repaired or refurbished 124,031 bridges, 125,110 public buildings, 8,192 parks, and 853 landing fields. In addition, workers cleaned slums, revived forests, and extended electrical power to rural locations.

We can't help but wonder whether such projects wouldn't also provide one solution to the problem of young men and failure to launch?

Discuss amongst yourownselves, haters.

Posted by Cassandra at January 8, 2013 06:35 AM

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Another advantage of the WPA was that it prepared large groups of young men for a regimented, disciplined, group-oriented outdoor life. In short, for the Army. That came in real handy a couple of years later.

Posted by: CAPT Mongo at January 8, 2013 09:14 AM

I see WPA as a necessary evil. Teach a man to fish and all that. Reduce the dependency on government.

Unfortunately, our politicians like dependent voters. Teach a man to fish and he may take his vote elsewhere. Give him a fish and he is dependent on you - now you can tell him where to go, what to do, how to do it, etc.

Posted by: Dan Irving at January 8, 2013 09:28 AM

Infrastructure construction and maintenance is one of the core functions of gov't. I'd much rather see welfare money spent on roads, burying power lines, and maintaining the water/sewer/storm drain system.

You need work, here's a shovel. You get a job, and we get something in return for our money. An exchange of value, that's how this thing is supposed to work.

There's are several problems.

1) It would take 10+ years to get any project started due to the massive regulations in place. It only took 3 from approval to start of contstruction on the Hoover Dam, and *that* engineering feet had never been done before. Now, we'd have to worry about the effects on some endangered cockroach.

You'ld never be able to match the size of the workforce needed to the size of the projects available because you would need to know the unemployment rate 10+ years in advance.

2) You're assuming that those on welfare want to work. I can't find the clip online, but I saw an excerpt for "Repo Games" on Spike TV (Repo men ask delinquent debtors 5 trivia questions, if they can answer 3, the show pays off the vehicle, if not, the reposession proceeds). In the clip, after winning, the "contestant" exclaims, "Now I don't have to get a job!" In Pennsylvania, you would need to earn over $50,000 to live off the same net income after welfare benefits as someone with pretty much $0 income at all.

3) That's racist! Because, shut up!

And since for Dems, higher welfare roles means more Dem voters, that isn't likely any time soon.

Posted by: Yu-Ain Gonnano at January 8, 2013 10:24 AM

Posted by: Yu-Ain Gonnano at January 8, 2013 10:27 AM

The predecessor to the WPA was the Civilian Conservation Corps (CCC). It was a pretty simple program: it targeted unskilled young men, and was run by the Army. It put men who applied for it into camps, taught them the skills they needed to do the work that the CCC needed done, while they lived under something much like military discipline. Their pay was sent to their families back home, except for a small allowance, so that these young men didn't drink it all up on the weekends.

Back in the 1990s, I worked on a documentary project about a CCC project near Savannah (the repair of Fort Pulaski, the Civil-War era fort, now a national monument). Every one of the men said the same thing about it: it was the second best experience of their lives, second only to fighting in World War II. They had very different experiences in the war -- one fought all the way across Europe, another was captured early and was a POW to Nazi forces -- but they all agreed that WWII was the best thing they'd ever done, and the CCC was second best.

For what it's worth, then, I see a lot of value in public works structured that way. They seem to be a very good way of getting things done, while providing meaning and structure to young men.

Posted by: Grim at January 8, 2013 10:43 AM

The social welfare system, the four problems with utilitarianism, work promotes confidence, young men and the failure to launch...

Proof enough that with the heavenly ordering of society by experts and bureaucrats with white papers and theories, hell can be had at no extra cost.

"Ladies and Gentlemen, it seems an iceberg has just run into us and we are taking on water. In the meanwhile ship's stewards will be passing out tomorrow's scheduled events and entertainment itinerary."

There may be something to be said for much of what is being said if there were a functioning social structure on solid foundations. I have an idea for a WPA project. DETROIT.

There, I've grumped, and feel better for it.

Posted by: George Pal at January 8, 2013 11:56 AM

There, I've grumped, and feel better for it.

OK, that made me laugh out loud :)

I'm of two minds (but then what self-respecting Womyn isn't... *drum roll*) about ideas like the WPA.

One part of me says, "Look, we're always going to have a social welfare system, so if we do, shouldn't it actually promote industry and the self respect that (often) go with work"?

The cynic in me says, "Government will find some way to screw this up".

That said, if government is going to be involved in social welfare, I want it to do so in a way that fosters the development of useful skills and requires something in return for that government check. I think this is vital for two reasons: because it recognizes that you don't or shouldn't get something for nothing, and because it offers a real hand-up in place of the proverbial handout.

Posted by: Cassandra at January 8, 2013 12:27 PM

"if government is going to be involved in social welfare, I want it to..."

I want it to also but can't have it for the want of what the government wants – so the hell with all that.

Lord I'm grumpy today... and I am by natural disposition one of nature's great successes in the production of the variety 'happy go lucky'. Well hell is other people with theories - so there's my excuse.

Posted by: George Pal at January 8, 2013 01:01 PM

The cynic in me says, "Government will find some way to screw this up".

Well, apparently it did the when the WPA was existant. It's critics called it "We Putter Along"

Posted by: Yu-Ain Gonnano at January 8, 2013 01:03 PM

Not just its critics. My grandfather was a welder who worked for the WPA during the Depression. He called it "We Piddle Around."

Posted by: Grim at January 8, 2013 02:17 PM

I'm not sure that's an indictment of the system, though, as much as it is of human nature.

Even in regular jobs (and the military) where significant disincentives exist for jackwaggonry, there are always what the spousal unit likes to call "sh**birds".

I agree that there is probably less of an incentive to work hard in any program run by the government because it's hard to kick people out.

I had to laugh - there were a number of good articles in the WaPo this week. One was on charter schools and the SHOCKING!!!!11! number of kids who get kicked out of charter schools.

That's exactly why I worked my fanny off to put my kids through private school - because private schools kick out disruptive students. It's a feature, not a bug :p

Posted by: Cassandra at January 8, 2013 02:37 PM

Yes, there will always be those type people within every organization. The issue is when it becomes so prevalent that it becomes the reputation of the organization.

The USMC does not have a reputation for laziness and shoddy work even if a particular Marine does.

When the problem becomes so bad that employers refuse to hire people with WPA on their work history, it wasn't just a case of a few bad apples.

Posted by: Yu-Ain Gonnano at January 8, 2013 03:13 PM

I tell people that when you send your kid to private schools you are not paying for better teachers, better facilities, better textbooks.

What you are really paying for are (generally) better parents. Parents who couldn't care less about their child's upbringing, tend not to pay for private schools.

Posted by: Yu-Ain Gonnano at January 8, 2013 03:18 PM

I think there are three things you get when you pay for private school (in general - not all private schools are good). Over the years, my sons spent more time in private than public school even though that meant I had to find the money (usually by performing some manual labor-type job on top of running our home):

1. Higher standards. This is b/c private schools can fail students and also kick them out.

2. A better environment for your kids that actually supports learning and reinforces the values you're trying so hard to teach them.

3. More ability to hold teachers accountable.

That said, I ended up home schooling my boys in middle school/early HS because the private school I was paying for wasn't getting the job done. But the public schools there were SO much worse by comparison that I wouldn't even have considered sending them there.

I'd have sent my sons away to boarding school (which is something I *never* wanted to do and would have been ruinous financially) rather than put them in the local public school. The books were several grade levels below current grade level, the test scores and standards were abysmal, and the culture was downright toxic.

Home school was far and away the best quality curriculum, and it showed in their test scores (which went through the roof). Private schools overall were next.

Public schools... well, the best one was an elementary school where my kids were in a blended class (half one grade, half the other) and on independent study most of the time because I insisted that they learn how to read and write competently in their native tongue.

I don't think the teachers were much better overall, but the administrations in private schools were more supportive of both parents and teachers. That's huge, and when you're raising two boys with a Dad who is deployed or away much of the time, it's money in the bank.

One less thing in the popular culture to fight.

Posted by: Cassandra at January 8, 2013 04:11 PM

1. Higher standards. This is b/c private schools can fail students and also kick them out.

Because better parents demand high standards of their own children it's easy for the school to follow suit. They don't have to worry about little Johnny Perfect's parents yelling at them because a teacher was "mean".

2. A better environment for your kids that actually supports learning and reinforces the values you're trying so hard to teach them.

Because better parents tend not to raise disruptive children.

3. More ability to hold teachers accountable.

It's easier to tell when the problem is the teacher or the students when the parents have largely removed the variation of one of the two.

Parenting matters. Who knew? :-)

Posted by: Yu-Ain Gonnano at January 8, 2013 05:50 PM

Because better parents demand high standards of their own children it's easy for the school to follow suit. They don't have to worry about little Johnny Perfect's parents yelling at them because a teacher was "mean".

As someone who attended mostly public, and then private school, allow me to differ. If you think a lot of private school parents don't expect their little princes and princesses to be treated gently (and to get easy A's), I have quite a few stories to tell you. Or you can read the ones in the paper about kids running completely amok in tony private schools in the DC area.

It's not as simple as parents. A school has character (or not) depending on who founds it, who runs it, and often on the courage or lack thereof of the board of trustees. A well run private school usually has a long waiting list and funds put away for a rainy day, so they can afford to expel students who cause problems. And there are plenty of those.

A poorly run private school, not so much. These are the ones who cave to parents who threaten them.

I think parenting matters, but it's far from the whole story. I met many obnoxious and overbearing parents during my own and my sons' private school years who pressured teachers to dumb down classes and tests and whined like babies when little Johnny was disciplined for behaving like a spoiled brat. I saw this from both sides - as a parent, and as a friend to Marine wives who taught at the schools my sons attended. One parent conducted a smear campaign against the best teacher one of my boys ever had - she had won numerous awards and was tough and extremely good at her job.

And some parents didn't like that. She gave my son a few well deserved bad grades and I thanked her for it, but some of the other parents were truly awful.

Wealthy parents are often the pushiest and most obnoxious of all. They were the downside of private school, IMNSHO. Still, the sheer fact that private schools *can* expel students ensures that the worst offenders are invited to leave.

Posted by: Cassandra at January 8, 2013 06:42 PM

If you think a lot of private school parents don't expect their little princes and princesses to be treated gently (and to get easy A's), I have quite a few stories to tell you.

Oh, I'm sure they do. They just don't have as many. Nor are they the same type of "gentle treatment". Complaints about after school detention for speaking in class are not the same as "If my little Johnny broke some kids nose, the other kid must have started it, you racist."

I don't doubt that the ability to expell students has an effect. It just wouldn't have the same scale effect as it would if public schools could do it.

Posted by: Yu-Ain Gonnano at January 9, 2013 09:44 AM

I agree with that, and I do believe parents have a huge impact on academic performance. It's just that I think there are other factors too.

I will say that it was interesting seeing how public schools out West handle things. They do actually kick some kids out of public schools b/c they have a system of alternative schools.

That has its issues, of course, but it struck me as a good idea.

Posted by: Cassandra at January 9, 2013 11:49 AM

They've started that in GA as a side effect of NCLB.

They kick the disruptive kids out into a single alternative school, then dare the state to take it over, ala Br'er Rabbit and the briar patch.

Posted by: Yu-Ain Gonnano at January 9, 2013 12:32 PM

I gather that Georgia can now kick kids out of a school system, so that the parents must either find them private education or move to a different county. Apparently a lot of people kicked out of the Athens/Clarke County system end up in the southernmost part of Madison county, leading to miserable schools on the southern part of the county. Exporting your problems to your neighbors isn't great policy, but I think Athens thinks it's good to be able to distribute problem children outside of town.

Posted by: Grim at January 9, 2013 04:47 PM

Not really. Elbert County School System kick kids out into the Elbert County Alt School System. The regular school improves because it has the "good" kids who want (or don't mind) to learn, while the Alternative school fails (as it must because the student's weren't going to learn anyway). The alt school has the absolute minimum budget the county can get away with giving it, since it would fail regardless. When the state threatens the school with a takeover for its poor performance, the response is a very sarcastic "No please, don't. Anything but that." :-|

Basically, it's no different than improving society by removing the bad actors from it and housing them seperately.

Posted by: Yu-Ain Gonnano at January 9, 2013 06:18 PM