The debate happening on Capitol Hill this week about whether or not to include expanded child tax credits in the COVID relief package has given new scope for a very old and supremely bad right-wing take on this issue to rear its head. The classic conservative argument would have us believe that this program, and other safety net benefits like it, would remove the incentive to work. As an analyst at the American Enterprise Institute put it—according to the Washington Post—historical experience allegedly reveals that "greater benefits led to a sizable decline in employment among single mothers, and research on the state and federal welfare reforms of the 1990s found that, on net, less generous benefits led to more work in the population affected."
Empirically, this does not hold up. Christopher Jencks looked into the historic data on this decades ago, in tussling with Charles Murray's Losing Ground, and concluded that there was no evidence of any linkage between the amount of welfare benefits going to single mothers and their propensity to join the labor force—indeed, he found that policy changes in the 1970s lowered the purchasing power of welfare benefits, yet unemployment increased in the aftermath of the change, whereas it had been reduced in a prior period of more generous benefits.
His book, Rethinking Social Policy (1992), does spot at least one major moral problem with welfare policies as they existed in that era, however: namely, that benefit levels were so low across the board, that mothers had to work even while receiving AFDC checks (as the program was then called) in order to reach a tolerable standard of living. The result was that, due to a combined income of welfare payments and off-the-books work, many mothers on AFDC did actually manage to be better off than single women who worked at low-wage jobs without welfare payments.
None of which seems to have disincentivized work on either side—it would seem—but which did amount to a moral travesty in many people's eyes.
The irony, however, is that slashing AFDC benefit levels even lower would in no way have addressed this problem—to the contrary, it would have made it worse. Mothers on AFDC had to work off-the-books for two reasons, Jencks and his co-author Kathryn Edin found. First of all, they had to supplement their AFDC income in order to survive and support their children at a decent standard of living, as mentioned above. Secondly, however, if they reported their income from work to the government, their AFDC benefits would be cut proportionately. This was because conservative lawmakers had repealed the earlier "thirty-and-a-third" rule that had allowed mothers to retain a portion of their income from work without seeing cuts to their welfare checks.
In both cases, therefore, it was precisely the stinginess of the benefits in question, not their generosity, that created a scenario in which some women on AFDC ended up better off than similarly-situated mothers working low-income jobs. Rather than an argument against the kinds of quasi-universal childcare benefits that the current proposals on the hill envision, therefore, this historical experience suggests exactly why structuring benefits in this way is such a good idea.
A credit that is roughly the same for every family with a child (and we acknowledge here that the proposals currently under discussion are not truly universal, and would wind down at certain income levels, but they are much closer to being universal than current means-tested public benefits) would mean that the mothers whom Jencks and Edin interviewed would no longer have to choose between working and receiving the check. No one would be incentivized to either not work or have to hide the fact that they were working, because the income from these sources would not be used to deduct from their benefit levels. All similarly-situated parents would be receiving the same size checks, and those who worked would simply have an income that much higher.
But wouldn't many people simply decide they preferred not to work at all? If benefit levels became such that they allowed the possibility of survival without having to accept a low-wage job, wouldn't many people prefer to live off of the tax credit?
This is one argument—let us call it the empirical one—that conservatives often raise at this point. Another is what we might call the moral and spiritual argument. It runs: Isn't receiving these credits a violation of people's dignity in its own right, regardless of whether it has any further effects on employment? Doesn't it render people "dependent" and therefore in a fundamentally shameful position?
Let us take the empirical argument first. The claim it makes as to the effects of the program on employment is of course testable. But does the argument even make sense? It seems a bit confused as to how and why jobs are created in the first place. Positions for employment are not offered simply because workers want them. They are created because firms have a profit motive and they need people to staff their operations. If firms are at risk of losing workers to a more generous social benefits package, it doesn't mean they will simply let them go. It just increases their incentive to provide higher wages. In other words, it sets a new wage floor.
This seemingly obvious fact had not actually occurred to me, until a recent conversation with my sister. We were talking about the generous program of expanded unemployment benefits that had gone into effect during the pandemic, and how they exceeded the income one could earn from a minimum wage job. I observed, in a "let's-play-devil's-advocate" sort of way, that this seems intuitively unfair, and had raised concerns in some quarters that—if these benefit levels continued post-pandemic—they would disincentivize work. My sister said in reply, "Yeah, but the opposing argument is that it just incentivizes companies who need those workers to raise their wages to compete with the UI benefits."
This effected a Copernican Revolution in my brain. Oh right! This wouldn't end work in our society. It would just mean that employers had to make higher offers to get the talent they need. Since conservatives are so up-in-arms about the proposal to raise the minimum wage, meanwhile, here perhaps is a different means to raise wages—and one that is chiefly market-driven at that.
Of course, even this means of raising wages would put somewhat more of a burden on employers, particularly on small and medium-sized businesses who are already struggling to compete with the big conglomerates. The UI example is complicated by the fact, however, that there is always a binary tradeoff between either working or receiving unemployment checks. As soon as one is working, one can no longer receive unemployment benefits, and vice versa. A childcare benefit of the sort we are discussing here would not necessarily involve this kind of either-or.
Here we find, then, yet another reason to support the kinds of quasi-universal benefits that the childcare tax credit represents. Under these proposals, having an income from a low-wage job (so long as one remained under certain overall income caps) would no longer be counted against the size of one's tax credit. Working could only help you and supplement your income, therefore, never harm you and deplete other parts of your income. Thus, people would still gain financially from working at whatever wage, and would therefore continue to want to do so.
So low-income families would be materially better off under this arrangement, this much is plain.... That takes care of the empirical argument. But what about the other? Would they suffer a moral and spiritual decline?
We turn then to the second conservative argument we raised above. And we discover that it rests on a series of misapprehensions about human psychology.
For one thing, the concept of "independence" to which the conservative "spiritual" argument appeals is a philosophical nullity. All human systems of value and economics are social by definition. Being rich doesn't make someone more "independent." In a sense, it makes them more dependent. Money in any form is a socially-defined system of power. And all power is a matter of public opinion, as Ortega y Gasset observed, and as the Hegelian master-slave dialectic confirms. This principle suggests that one is only more dependent on the recognition of others, the more one has "power" over them.
When we apply this insight to the monetary system, we can rephrase it as: one only has as much money as the collective opinion of society agrees one has.
What is "undignified" and psychologically harmful about receiving means-tested welfare checks is therefore not the fact that the money comes from someone else. All money comes from someone else—from society writ large, and its code of determined value. If we wish to be more concrete about it still, we can simply observe that nearly everyone in our society sits someplace on a spectrum in which they depend for some things on government-provided public services.
The "undignified" aspect of means-tested benefits is not that they involve some element of this inevitable social "dependence"—it is, rather, merely the fact that they are means-tested. Receiving them, therefore, is an index of one's place within a social hierarchy. They are a kind of stigma.
If these programs were universal, by contrast, then claiming them would no longer be an insult. The programs also would be vastly less vulnerable to political challenge, since they would no longer be associated with a stigmatized segment of society.
So we peel away these moral and spiritual and empirical arguments against universal benefits, and we find that they don't amount to much. And yet we still see conservatives railing against safety net programs and working at every turn to dismantle them or make them more restrictive (under Trump's watch this reached grotesque extremes, in the form of various efforts nationwide to attach new work requirements to food stamps and other human necessities, while pursuing blatantly plutocratic policies at the federal level aimed at enriching the already wealthy).
And what we find time and again in these debates is that conservatives (at least conservatives of some stripes—others, we should note in fairness, have been advocating for universal benefits for a long time) don't oppose safety net programs because they actually think they make the poor worse off over time. They oppose them because they make the poor better off. And this, to the conservative mind, is a moral atrocity.
When assessing these kinds of debates, we are far better served by turning to the moral psychological theories of George Lakoff, therefore, than we are to the empirical studies of economists and policy analysts. The former reminds us that conservatives fundamentally regard poverty as a sign that someone failed to follow the rules laid down by our society. In order to discourage this departure from the rules, and to reward those who did allegedly follow them, poverty needs to hurt. It is precisely the fact that generous social programs make it hurt less that conservatives regard as the final moral argument against them.
And by pursuing this logic, we discover that the true conservative ideal would be a society where we cut to the chase and simply made it a crime to be poor. As William Gaddis once observed, in his The Rush for Second Place, precisely such a scheme for society was already laid out in Samuel Butler's Erewhon (1872), and it could very well serve as a blueprint for the right-wing social policy of the last few decades. (Gaddis specifically saw overtones of Butler's tongue-in-cheek "utopia" in Gingrich's "Contract with America"). In Butler's satire, Gaddis informs us, poverty and sickness are treated as criminal offenses. Whereas "if you had been born of healthy and well-to-do parents," you were presumed ipso facto to be law-abiding.
Which, absurd as it sounds, is in fact a perfectly logical inference from conservative ideology. It follows inexorably from the starting assumption that wealth is an index of personal morality, whereas poverty is a sign that one violated the rules, failed to work hard, and therefore should be made to suffer as a stimulus to repentance and—failing that—an example to others.
And if that is the worldview with which we have to contend, let us face it squarely, instead of maintaining this pretense that all parties to the debate share the same ultimate goals of social policy, and we are merely having a disagreement as to means.
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