Warrigal
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Just came across this article http://insidestory.org.au/welfare-myths-and-the-luck-of-life that is based on a book Good Times, Bad Times: The Welfare Myth of Them and Us, by British social policy researcher John Hills.
The writer of the article talks about some issues raised and draws comparisons with the Australian situation. I will be posting on an Australian site but it occurred to me that it could be of interest to Americans as well.
Here is a taste
The writer of the article talks about some issues raised and draws comparisons with the Australian situation. I will be posting on an Australian site but it occurred to me that it could be of interest to Americans as well.
Here is a taste
Volatility
A key theme of Good Times, Bad Times is the volatility of poverty. Hills describes the week-to-week income received by a high-income family as fairly dull: regular pay cheques, and occasional blips from investment income. By contrast, the same graph for a low-income family “would look more like the hospital heart monitor of someone in trouble, with big jumps and falls from week to week.” This highly erratic pattern is partly due to life events (such as losing a job or finding a partner) but also a result of means-tested government payments starting or stopping. Since there is a delay in means testing, the result can be to add to the volatility of incomes, rather than smooth it out.
Income volatility – over weeks, years or even generations – isn’t surprising when you think about it. But the puzzle is that many seem not to have thought about it. In Britain, the secretary of state for work and pensions, Iain Duncan Smith, claims that his country has council estates “where often three generations of the same family have never worked.” Yet as Hills points out, the data show that less than 1 per cent of adult men have never worked, and researchers have been unable to find even a single example of multigenerational joblessness. As one researcher puts it, verifying Duncan Smith’s claim is like “hunting the Yeti.”
What about in Australia? Here, too, a quick search turned up a number of conservative politicians making Duncan Smith’s claim. Kevin Andrews frets about “jobless households, in which many generations of Australians do not know what it is like to have a job.” Peter Dutton bemoans “households in which there is now a third generation of people who have never worked.” Ewen Jones worries about “generations of people out there who have never had a job.” The Australian editorialises about “the evidence of Australian families where three generations have never worked.”
What does the evidence say? Looking at the Household, Income and Labour Dynamics in Australia (HILDA) survey, I found that among men thirty or older, only one in 500 had never worked (see chart). And among this tiny sample, all the respondents reported that their father was working when they were a child. Like the British social researchers, I was unable to find a single example of a family in which both the father and son had never held down a job. The rhetoric of Andrews, Dutton and Jones seems adrift from Australian reality.
Another mistake that arises from the static view of poverty is the tendency to divide the population into “us” and “them.” In Britain, prime minister David Cameron talks about “strivers” and “skivers.” In the United States, Republican presidential candidate Mitt Romney split America into the 47 per cent “who are dependent on government” and the 53 per cent who pluckily make their own way in life. In Australia, treasurer Joe Hockey (invoking long-serving Liberal prime minister Robert Menzies) divided the nation into “leaners” and “lifters.”
The problem with this approach is that most of us move between the categories at different points in our lives. The “skivers,” the “47 per cent” and the “leaners” include retirees, students, people with disabilities, the newly jobless, and single parents whose partners have just left them. To stamp a permanent label on the forehead of any of these people makes no sense.
In Britain, Hills points out, the experience of child poverty is surprisingly widespread. Using the definition of poverty as families with less than three-fifths of the median income, he finds that only one in eight children are poor in a given year. But over the course of a decade, half of all British children will experience at least a year in poverty. Being in poverty is abnormal; being touched by poverty during childhood is not.
Taking a dynamic approach to poverty reminds us of the role the welfare state can play in managing risk. Until the late nineteenth century, individuals effectively had to self-insure against risks such as sickness, job loss, and poverty in old age. With the advent of the welfare state, the job of managing many of these risks was moved away from individuals and towards government. Taxes became like an insurance premium, to be paid out in the event of illness, unemployment or retirement.
Like Cameron, Romney and Hockey, Prussian leader Otto von Bismarck was a conservative. But Bismarck created the world’s first welfare state because he realised that we can’t split society into “us” and “them.” Speaking in the Reichstag, Bismarck argued that it is the responsibility of the state “to protect the worker from accidents and need when he is injured or becomes old.” By creating programs such as old age pensions, accident insurance, medical care and unemployment insurance, we give people greater confidence to live their lives – to have children, invest in their businesses, and try new jobs.
