Robert Doar ran New York City’s famous workfare program under Mayor Rudolph Giuliani. It was a system that provided training and jobs to those who were capable of working while receiving welfare benefits, and is viewed as the model for welfare reform.
Doar’s work is particularly relevant now, as the monthly jobs reports indicate that millions of Americans are simply dropping out of the work force, completely giving up the job search. In answering why this is the case, Doar compares the American welfare system to the British welfare system, and determines the prescription –encourage or require work:
In a study published last month, University of Chicago economist Casey Mulligan concludes that in response to the recession, several U.S. safety-net programs changed in ways that discouraged employment. Unemployment insurance, for example, was made more generous in multiple ways. Eligibility rules for food stamps were reduced, waivers from work requirements were granted, and the monthly benefit amount was increased.
The U.K.’s fiscal “stimulus” took a very different path. Increases to benefit programs were smaller, Mr. Mulligan notes, and largely involved cutting tax rates on income and consumption. To encourage more low-income individuals to work, Work and Pensions Secretary Iain Duncan Smith reformed the disability program to make more accurate and frequent assessments of recipients’ ability to work, and imposed benefit caps. He has also begun to roll out the Universal Credit system to help the unemployed find work faster, stay in their jobs longer and earn more.
“The American stimulus reduced average incentives to be employed” during the recession, Mr. Mulligan writes, “whereas the British stimulus did the opposite.” His research suggests that as of 2013 incentives to work in the U.S. still remained below what they were in 2007.
Mr. Mulligan is not alone. President Obama’s Council of Economic Advisers acknowledged in its 2015 Economic Report of the President that among the factors fueling the U.K.-U.S. divergence were British policy changes that “introduced more stringent job-search requirements for some welfare recipients.”
Interesting is that his administration knew about it, and made recommendations about changing the system, but none of these recommendations were ever heeded. This is unfortunate, because perhaps no President has had a mandate quite like Obama to encourage those on the dole to pursue meaningful employment, or build a system around it. But doing so would require admitting that displaced workers shelter some responsibility for their situation, and an abandonment of the Government as your Savior and Protector against evil KKKapitalists dynamic that liberals have been bandying about for so long. Obama, who regularly calls out Republicans for being too ideological, seems hell bent on doing everything he can to uphold cheap, doctrinaire liberalism while the nation suffers.
AAN Staff
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