Monday, July 12, 2004

Bowling for Columbine and Welfare Reform

I watched "Bowling for Columbine" last night with memories of National's proposed welfare policies still fresh in my mind. This lent a particular piquancy to the story of the Michigan six-year-old who took a gun to school and killed another child. His mother had been thrown off welfare and forced to work two minimum-wage jobs in another city as part of Michigan state's welfare reforms.
Now I'm not so naive as to believe everything Mike Moore alleges about the Bush administration, the GOP or neoconservatives in general, but the basic facts outlined above are a matter of record. The statements that Lockheed Martin are being paid to administer the welfare reforms and that at least one of the mother's employers was receiving a tax break for participating are also (to the best of my knowledge)uncontested.
It is also hard to deny that the Bush administration and much of the American right is tainted by more than mere greed -
(1) There may be innocent explanations to some of the Cheney/Halliburton stories nut surely there is at least a stronger prime facia case for a special prosecutor than Whitewater.
(2) There seems little doubt that George Bush was guilty of at least insider trading in the early 1990's but escaped the consequences because of his father's position. The amounts involved were much larger than in Whitewater.
The readiness of the American ruling classes to chase a fast buck, of the mainstream American media to lionise the rich and hold the powerful beyond suspicion and of the American public to equate wealth and power with fitness to be given more wealth and power makes it all too easy to see how reforms like the privatisation of health, prisons, education and welfare become policy (cherchez l'argent mes amis) over there. It would be a tragedy if "cultural colonisation" led to countries like New Zealand, where we demand (and, I believe with few exceptions, get) higher ethical standards from our politicians, adopting the same flawed policies.
In New Zealand a solo mother with a six year old child would get an annual net income of $14,716 (excluding accommodation allowance). She can earn up to $80 a week without any loss of benefit for a total annual income of $18,001. If, however she get's a full-time job earning (say) $20,000 per year (about $12 per hour, many full-time jobs pay less) her final take home pay will be $21,662. Even if the state (or someone else) pays the full cost of childcare, transport, etc the extra $3660 is not an adequate reward for working full time. If we want to encourage solo parents with young children to go out to work then letting them hang on to a bigger share of their earnings is likely to be far more effective than coercive measures.

6 Comments:

Blogger TomV said...

We need to cultivate an attitude where getting a job that earns you not a cent more than being on a benefit would still be taken. If more people regarded receiving a benefit as an unpleasant necessity, even slightly shameful, and got off the benefit as soon as they could because it was the right thing to do, then we'd all be better off.

12 July 2004 at 8:55 PM  
Blogger Greyshade said...

Tom
Maybe we would all be better off if everyone had an attitude where they would work harder (and/or smarter) to maximise their earnings whether or not they got to keep any of the proceeds but conventional economic theory suggests that leaving them a decent incentive works better. I don't see why we should differentiate between "beneficiaries" and "workers". Many New Zealanders are both and many more will be both at some point in their lifetime.
For example a married couple with two children and a single full-time job earning $30,000 will pay $5724 income tax and receive family assistance of $2684 per year. OK, we could change the system so that the family assistance was paid as a tax rebate rather than a direct payment to the principal caregiver but what would that change (apart from wiping out Don Brash's assertion that the recent budget changes increase the number of beneficiaries)?
Yes, there are some individuals who are perfectly capable of earning their own living but choose a life of impoverished idleness on a long-term benefit just as there are some wealthy wastrels who choose to spend their inheritance on a life of indolent opulence rather than seize their oportunities to build up the family business or start a new enterprise. But there are not many and those there are may already be in the place where they can do least harm. We could put either group into the army (but only if we are certain our country will never fight a war). We could force the professional beneficiary to take a job (but not if we must steal that job from a willing worker or job seeker). We might force the idle rich to assume captaincy of the family business (but this is a stupid idea), or force them into politics (but please God, DON'T!). Better perhaps to make sure that all have the means to take charge of their destiny and sufficient positive incentive to seek success but, having done that, to accept the choices each individual may make.

13 July 2004 at 5:54 PM  
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