[P2P-F] why targeted social programs are self-defeating

[Michel Bauwens]

It's really worth remembering why the labour movement chose for welfare
systems that did not target only the 'deserving poor'; the research shows
that targetting effectively reduces the political support for such welfare
programs, leads to defunding, to a deterioration of the programs and so to
a vicious cycle:

Very much worth reading in full:
http://theweek.com/articles/601672/just-give-welfare-everyone

(otherwise this is a great and recommended report on how freelancers and
precarious workers are organizing with the help of unions and coops, and it
includes a report on the emerging labour mutuals which bridge the gap
between the precariat and the salariat;  ** Report: Not Alone. Trade Union
and Cooperative Solutions To Self-Employment. By Pat Conaty, Alex Bird and
Philip Ross. Co-operatives UK, 2016*

URL = http://www.uk.coop/notalone pdf
<http://www.uk.coop/sites/default/files/uploads/attachments/not_alone_-_trade_union_and_co-operative_solutions_for_self-employed_workers_3.pdf>
 )



"Targeting keeps the costs of programs down. As a broader matter of
principle or fairness, it's best to avoid giving money to people who don't
need assistance. But while targeting sounds rational in the abstract, it
may be self-defeating in practice.

"By discriminating in favor of the poor, the targeted model creates a
zero-sum conflict of interests between the poor and the better-off workers
and the middle classes who must pay for the benefits of the poor without
receiving any benefits," sociologists Walter Korpi and Joakim Palme argued
<https://campus.fsu.edu/bbcswebdav/institution/academic/social_sciences/sociology/Reading%20Lists/Stratification%20%28Politics%20and%20Social%20Movements%29%20Copies%20of%20Articles%20from%202009/Korpi-ASR-1998.pdf>
in *The Paradox of Redistribution and Strategies of Equality*. "...The
greater the degree of low-income targeting, the smaller the redistributive
budget."

Poverty can socially mark people in their community and in the public
discourse: as lazy, as lacking virtue, as unworthy. But government aid
programs that target people in poverty can socially mark them in the same
way, precisely because other people who aren't getting the benefits see the
people in poverty getting them. As early as 1976, Ronald Reagan was telling
stories <http://krugman.blogs.nytimes.com/2007/11/10/innocent-mistakes/>
of young
black men
<http://billmoyers.com/2014/02/27/ronald-reagans-racially-tinged-stump-speeches/>
buying
steaks with food stamps, and women gaming
<http://www.npr.org/templates/transcript/transcript.php?storyId=255819681> the
welfare system. More recently, in 2013, conservative media got ahold of a
single anecdote of a man buying lobster with food stamps and beat it into
the ground
<http://mediamatters.org/blog/2013/08/13/fox-news-reports-on-snap-binging-losers-and-too/195369>.
These sorts of urban legends then feed attempts
<http://www.huffingtonpost.com/2013/07/01/food-stamps-resentment_n_3518821.html>
at
both the federal
<http://www.cbpp.org/research/ryan-budget-would-slash-snap-by-137-billion-over-ten-years>
 and state
<http://www.huffingtonpost.com/2015/04/08/missouri-food-stamps_n_7026704.html>
 level
<http://thinkprogress.org/economy/2015/05/01/3653919/wisconsin-food-stamps-shellfish/>
to
either cut food stamp spending, or hem in
<http://www.thenation.com/article/why-do-americans-feel-entitled-tell-poor-what-eat/>
its
recipients with drug testing and other humiliating restrictions. Work
requirements for government aid are also extremely popular
<http://www.rasmussenreports.com/public_content/business/jobs_employment/july_2012/83_favor_work_requirement_for_welfare_recipients>
.

There's even international evidence for this: Studies
<http://www.vox.com/2016/1/23/10810978/cash-transfer-givedirectly-spillover> of
two programs that gave direct cash transfers to poor people in Kenya and
Malawi found, not surprisingly, that the recipients of the money did
better. But the people in the same communities who didn't get any aid
showed *decreased* life satisfaction and spikes in emotional distress.

In America, race and racism intensifies
<http://www.slate.com/articles/news_and_politics/politics/2016/01/bernie_sanders_political_revolution_depends_on_white_america.html>
the
effect. Poverty and the programs targeted at the impoverished do not just
mark people in general as lesser; they're largely used to mark black
Americans specifically, despite the fact that the majority of welfare
recipients are white. Poverty and economic deprivation are among the main
<http://theweek.com/articles/573307/end-police-violence-have-end-poverty>
vehicles
<http://theweek.com/articles/567495/what-black-lives-matter-gets-wrong-about-bernie-sanders>
by
which racial injustice is created. White resentment of black Americans was
one of the central forces
<https://www.washingtonpost.com/blogs/plum-line/wp/2014/05/23/yes-opposition-to-obamacare-is-tied-up-with-race/>
of
opposition to traditional welfare (Aid to Families with Dependent Children)
<https://en.wikipedia.org/wiki/Aid_to_Families_with_Dependent_Children> and
even ObamaCare (which is also heavily targeted
<http://www.brookings.edu/research/papers/2014/01/potential-effects-affordable-care-act-income-inequality-aaron-burtless>at
the poorest Americans).

Giving people aid through government programs is never just an "economic"
act. It's always a social act, too, as well as a political one — and thus
an act with social and political consequences
<http://www.vox.com/2016/1/23/10810978/cash-transfer-givedirectly-spillover>.
The social and political effects of targeting benefits create resentments
that can fracture the political alliances needed to preserve welfare state
programs. Targeting winds up defeating itself, because the targeted
programs lose support, gain enemies, and become easy political targets for
cuts. The welfare state winds up more stingy and redistributing less.

Because the politically powerless get these targeted benefits, people start
to resent them. So politicians cut the programs. Then the programs don't
work very well. "Programs for the poor are poor programs," as an old adage
goes.

The answer to the problem is to actively pursue "universalism" — avoid
programs that target poorer Americans or that have eligibility cutoffs for
people with too much income ("means testing" is the technical term) and
instead deliberately distribute government aid across as broad a swath of
the population as possible.

A universal basic income
<http://theweek.com/articles/444714/why-reform-conservatives-should-embrace-universal-basic-income>
—
which would give the same monthly cash benefit to every man, woman, and
child in the country — is the extreme version of this idea. But
universalism is an approach, not a policy, and can be pursued to varying
degrees. For instance, one could imagine a program
<http://theweek.com/articles/566391/what-hillary-clinton-doesnt-about-women-workforce>that
gives the same monthly cash benefit to every family with a child, per
child, regardless of income. You could extend that framework
<http://mattbruenig.com/2015/07/10/a-basic-welfare-framework/> to the rest
of the welfare state as well, with similar programs for every student,
every retired person, every disabled person, and every person caring for a
disabled or sick person. Single-payer systems
<https://en.wikipedia.org/wiki/Single-payer_healthcare> are an example of
universalism in health care.

The closest America has come to universal programs are things like Social
Security and Medicare, which go to everyone over a certain age. And while
resentments of the poor in general and African Americans in particular have
certainly been used to prevent their expansion (Social Security excluded
<https://www.washingtonpost.com/news/wonk/wp/2013/06/03/a-second-look-at-social-securitys-racist-origins/>
65
percent of the black workforce and only 27 percent of the white workforce
when it was implemented in 1935, and the gaps weren't closed for almost two
decades) there's little evidence from American history that they can
fracture universal programs once they're in place. Social Security and
Medicare, much to the chagrin of many reformers, are pretty much
untouchable in U.S. politics. Meanwhile, politicians have cut
<http://www.demos.org/blog/1/20/16/are-programs-poor-actually-poor-programs>AFDC
and other targeted income supports in the last few decades, sometimes
severely.

That's the theory, anyway. The data backing this theory is not airtight,
though. When economist Lane Kenworthy looked across
<http://lanekenworthy.net/public-insurance-and-the-least-well-off/> several
major western nations, from 1985 to 2005, he found a strong relationship
between how big a country's welfare state budget was and how much it
reduced inequality. He also found that in 1985, there was a strong
relationship between how much a country relied on universal programs and
how much it reduced inequality. But by 2005, that relationship had
disappeared. How much a country relied on universalism didn't seem to have
much effect on how much its programs reduced inequality.

That said, Kenworthy was working with a small data set. His results largely
depended on changes in Denmark and the United States. Denmark has moved
from universalism to a more targeted system without becoming any noticeably
less generous or redistributive. It still spends gobs
<http://www.demos.org/blog/5/4/15/david-brooks-makes-basic-poverty-mistakes> on
its welfare state, and boasts very low levels
<http://www.demos.org/blog/10/20/15/united-states-vs-denmark-17-charts> of
poverty and inequality. The United States, meanwhile, cut its targeted
programs (think welfare reform
<http://theweek.com/articles/566842/why-paul-ryans-welfare-reform-always-going-dead-end>)
while leaving broad programs like Social Security and Medicare in place.
The nature of its welfare state programs became more universal on net,
while staying extremely stingy
<http://theweek.com/articles/553937/americas-social-safety-net-way-skimpy--horribly-designed>
.

This led Kenworthy to propose an updated theory: By installing universal
systems first, Denmark changed its social character. It created the social
and political solidarity that allowed it to target programs more
effectively later on.

Achieving that solidarity would likely be much harder in the U.S., given
our history of slavery and Jim Crow and white supremacy, not to mention our
comfort with inequality. But the story of how this happened doesn't change
the effectiveness of universalism as an important strategy toward equality.
SHARE!


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