Tag Archives: Work

News

Does the limiting of government spending make children starve?

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This is a pretty illuminating article from Forbes magazine.

Here’s the question:

The budget debates have been illuminating. Apparently, those heartless tea partiers would gladly allow children to starve so millionaires can pay less in the way of taxes. The latter has been a recurring slander leveled against welfare reform in the ’90s and more recently in response to Paul Ryan’s budget proposal.

No one starved then. What if Washington stopped doling out relief now?

Wow. Are conservatives really so heartless? Is government spending really necessary to keep people from starving?

Let’s see:

People who oppose government redistribution contribute four times as much charity as those who favor such schemes. This includes 3.5 times as much to secular charities. Those who prefer free markets also give more blood, are more likely to provide directions, to return change given mistakenly or offer assistance to the homeless.

To truly be charity, alms must be given freely, require nothing in remuneration and offer the donor no material benefit. If possible, benevolence should be anonymous. The left hand ought to not even know what the right hand does.

Instead, the Left hand blares a trumpet about compassion while spending others’ money as it shamelessly smears the Right. Who is really heartless: those seeking fiscal responsibility or those spending our children into peonage?

That’s true – all of this government spending certainly isn’t good for our children. Why do we call it compassion when we impoverish the next generation so that we can spend ourselves into a higher standard of living with their future earnings?

But maybe the poor today really do need the money. Maybe charity isn’t enough and we need to government to take our money to help the poor?

Let’s see:

The real vacuum is federal spending. Washington filters our taxes through a bureaucratic black-hole before spewing out waste and vote-buying patronage. Public charity is an oxymoron. There is nothing moral in confiscating property from one to bestow on another.

As discussed previously, society does not revolve around Washington. The building blocks for an ordered, coherent community are families, friends and neighbors and then church (or equivalent). Only if each fails does government have any justification to execute its own counterfeit charity.

[…]Historically, when private parties provided most benevolence, it was generally administered more prudently than politicians redistributing other’s largesse. Thomas Jefferson bragged that you could travel the entire eastern seaboard and never encounter an American begging. Private charity was readily available and distributed responsibly so as to not create additional social burdens.

Relief was never meant for people who could help themselves, but don’t. Instead of easy handouts, people who neglect their duties could be taught responsibility and the dignity of work. Sensible charity offers a minimal safety net to prevent starvation or exposure, not provide idle comfort.

Poverty once suggested that someone lacked food, clothing or shelter. As the Heritage Foundation observed,

According to the government’s own surveys, the typical “poor” American has cable or satellite TV, two color TV’s, a DVD player or VCR. He has air conditioning, a car, a microwave, a refrigerator, a stove, and a clothes washer and dryer. He is able to obtain medical care when needed. His home is in good repair and is not overcrowded. By his own report, his family is not hungry, and he had sufficient funds in the past year to meet his family’s essential needs.

Not exactly dire circumstances. The average menial laborer today enjoys more material abundance than a prince or tribal chieftain of recent past.

Please click through and read the rest of this article. There is a lot more I’m not quoting.

I think conservatives need to start thinking about this question. We are always being accused of being stingy, because we want to keep our own money, and maybe give it away in charity, while holding the recipients accountable to pull their own weight. Is that so wrong? I give a lot more money in charity than Joe Biden, and I make a lot less. Maybe leftists think that everyone is as greedy as they are. Maybe they think that people shouldn’t be held accountable for making the kinds of simple decisions that cause poverty.

News

Youth unemployment rate would rise if minimum wage is increased

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From CNBC.

Excerpt:

A quarter of teenagers were jobless in March, representing a surprising increase from February, even as the unemployment rate for the rest of the population decreased.

This figure may only get worse if budget-strapped states raise the minimum wage, and it could also be a sign of greater structural damage underlying our economy, analysts said.

The unemployment rate for 16- to 19-year olds jumped back up to 24.5 percent in March, up from 23.9 percent the prior month, according to the latest jobs data from the Labor Department.

[…]“Even when comprehending that teen employment is volatile in nature, the data that exists serves up some shock and awe,” said Brian Sozzi, a retail research analyst with Wall Street Strategies, in a note Wednesday. “If these (wage) increases do go through, the prospect for teen employment will remain grim as employers search for workers with advanced skills to fill positions.”

Twelve states, including Illinois and Pennsylvania, are considering a hike in the minimum wage. While this has been the subject of a long-running debate, many economists and analysts say raising this pay bar may cause more teen layoffs, even as it helps teens who manage to stay employed make more.

“Minimum wage increases over the past few years has definitely made it worse,” said Peter Boockvar, chief equities strategist at Miller Tabak. “In fact, there should be zero minimum wage for teenagers, or at most, something much less than the current rate.”

Teens typically are the first to be fired and the last to be hired back in a normal economic cycle, so this rate can be considered a kind of leading indicator of employment.

The majority of young people foolishly favor Democrats – the same Democrats whose policies create a 25% unemployment rate for youth. Irony!

You can find out more about how raising the minimum wage increases unemployment from this comprehensive, 50-year, government study.

Excerpt:

Summary of Research on the Minimum Wage

* The minimum wage reduces employment.

Currie and Fallick (1993), Gallasch (1975), Gardner (1981), Peterson (1957), Peterson and Stewart (1969).

* The minimum wage reduces employment more among teenagers than adults.

Adie (1973); Brown, Gilroy and Kohen (1981a, 1981b); Fleisher (1981); Hammermesh (1982); Meyer and Wise (1981, 1983a); Minimum Wage Study Commission (1981); Neumark and Wascher (1992); Ragan (1977); Vandenbrink (1987); Welch (1974, 1978); Welch and Cunningham (1978).

* The minimum wage reduces employment most among black teenage males.

Al-Salam, Quester, and Welch (1981), Iden (1980), Mincer (1976), Moore (1971), Ragan (1977), Williams (1977a, 1977b).

* The minimum wage helped South African whites at the expense of blacks.

Bauer (1959).

* The minimum wage hurts blacks generally.

Behrman, Sickles and Taubman (1983); Linneman (1982).

* The minimum wage hurts the unskilled.

Krumm (1981).

* The minimum wage hurts low wage workers.

Brozen (1962), Cox and Oaxaca (1986), Gordon (1981).

* The minimum wage hurts low wage workers particularly during cyclical downturns.

Kosters and Welch (1972), Welch (1974).

* The minimum wage reduces average earnings of young workers.Meyer and Wise (1983b).

* The minimum wage reduces employment in low-wage industries, such as retailing.Cotterman (1981), Douty (1960), Fleisher (1981), Hammermesh (1981), Peterson (1981).

* The minimum wage causes employers to cut back on training.Hashimoto (1981, 1982), Leighton and Mincer (1981), Ragan (1981).

* The minimum wage encourages employers to install labor-saving devices.Trapani and Moroney (1981).

* The minimum wage increases the number of people on welfare.Brandon (1995), Leffler (1978).

* The minimum wage hurts the poor generally.

Stigler (1946).

* The minimum wage does little to reduce poverty.

Bonilla (1992), Brown (1988), Johnson and Browning (1983), Kohen and Gilroy (1981), Parsons (1980), Smith and Vavrichek (1987).

* The minimum wage helps unions.Linneman (1982), Cox and Oaxaca (1982).

* The minimum wage increases teenage crime rates.Hashimoto (1987), Phillips (1981).

* The minimum wage encourages employers to hire illegal aliens.

Beranek (1982).

* Few workers are permanently stuck at the minimum wage.

Brozen (1969), Smith and Vavrichek (1992).

* The minimum wage has reduced employment in foreign countries.Canada: Forrest (1982); Chile: Corbo (1981); Costa Rica: Gregory (1981); France: Rosa (1981).

This is why it is important for voters to understand economics. When you raise the price of labor, fewer employers will purchase labor. Supply and demand.

Commentary

Jay Richards explains how welfare forces people into dependency

1 Comment

Christian philosopher Jay Richards writing for the Heritage Foundation.

Excerpt:

More than 77 government welfare programs—which are spread across several federal departments and provide cash, food, housing, medical care, and targeted social services to poor and low-income persons—are “means-tested.” That is, beneficiaries qualify if they are below a specified income level.

Regardless of their intention, means-tested programs by their very nature pose disincentives for households to increase their incomes and risk termination of their benefits. Thus, the welfare system effectively set up roadblocks to the two main avenues for economic progress: marriage and employment. A single mother would be ensured of her benefits package as long as she did not take a job or marry an employed husband. Given this scenario, it’s not surprising that dismal societal trends have followed.

Unwed childbearing is the major cause of child poverty in America. Since 1965, the rate of unwed births has soared from 7 percent to 39 percent (and among blacks, to 69 percent). Children born and raised outside marriage are nearly seven times more likely to live in poverty than children born to and raised by a married couple. Moreover, unwed childbearing is concentrated among low-income, less educated women in their early 20s—those who have the least ability to support a family by themselves.

Low levels of parental work is the second major cause of child poverty in the United States. In a typical year, only about one-fourth of all poor households with children have combined work hours of adults equaling 40 hours a week. The typical poor family with children is supported by only 800 hours of work during a year, an average of 16 hours of work per week. If work in each family were raised to 2,000 hours per year—the equivalent of one adult working 40 hours per week through the year—nearly 75 percent of poor children would be lifted out of poverty.[6]

Marriage and one parent working = no child poverty. Why is government undermining that? Because broken homes produce children that require government intervention = more government = higher taxes = greater “equality” of wealth through government-run redistribution.

The article explains several government policies that would reduce dependency on government.

Richards explains:

The Welfare Reform Act of 1996 reduced some of these damaging incentives in one major program, Aid to Families with Dependent Children. Under AFDC, states were given more federal funds if their welfare caseloads increased, and funds were cut whenever the state caseload fell. In other words, states were basically encouraged to swell their welfare rolls.

Welfare reform replaced AFDC with a new program, Temporary Assistance to Needy Families (TANF), which provided incentives to move recipients toward self-sufficiency. Funding to each state remained constant regardless of the size of caseloads, and states were allowed to retain savings from caseload reductions.

In addition, states were required to have at least half of their welfare recipients engaged in work or activity that would prepare them for employment. Rather than anticipating depending on the government indefinitely, recipients were limited to five years on the welfare rolls. (Under the old AFDC program, recipients spent an average of 13 years on the rolls.) These reforms in funding structure and incentives made a substantial difference.

Despite dire predictions by opponents of reform that work requirements and benefit limitations would lead to a surge in poverty, just the opposite occurred. States had the flexibility to design programs that best fit the needs of their constituents. State welfare agencies were transformed overnight into job placement centers, while social workers helped recipients access child care, housing, transportation, or other support that was necessary to move them into jobs and toward self-sufficiency.

Within 10 years, welfare caseloads shrank by more than half: 2.7 million fewer families were dependent on welfare checks. As the welfare caseloads fell, the employment of single mothers surged upward, and 1.6 million fewer children were living in poverty.[7] In 2001, despite the recession, the poverty rate for black children was at the lowest point in America’s history.[8]

Unfortunately, Obama rolled back welfare reforms in order to incentivize people to go back onto government dependence.

Keep in mind that Arthur Brooks of the AEI has shown that the amount of wealth a person has (over the poverty level) is not what makes them happy. What makes a person happy (above the poverty level) is that a person is making their own way and earning their own bread by their own work. That’s what makes people happy.