Once you have a big enough welfare state you have to centrally plan the middle class economy as well?

Philip Greenspun's Weblog 2018-05-23

“Of course US birth rates are falling – this is a harsh place to have a family” (Guardian, Amy Westervelt):

The reality is, for all its pro-family rhetoric, the US is a remarkably harsh place for families, and particularly for mothers. It’s a well-known fact, but one that bears repeating in this context, that the US is one of only four countries in the world with no government-subsidized maternity leave

Have we really built a “harsh place … for mothers”? A mother who has never worked can get a free apartment in San Francisco, Manhattan, Boston, or Cambridge, free health care for herself and her children, free food (SNAP), and a free phone. This could be regarded as a “government-subsidized maternity leave” of at least 18 years and, in most cases, a lifetime (since the entitlement to public housing doesn’t go away once the kids are grown up). See Book Review: The Redistribution Recession for how eagerly Americans have adjustd their behavior to qualify for this government offer.

I think what Ms. Westervelt means is that the U.S. is a harsh place for mothers who work at middle-income jobs. The definition of “harsh” is that their incomes may yield a spending power and lifestyle that is actually inferior to what welfare mothers obtain (see Table 4 in The Work Versus Welfare Trade-Off for a calculation by state; here in Massachusetts welfare pays 118 percent of the median salary, whereas in New York it is 110 percent and in California only 96.5 percent).

(Americans who choose their sex partners and sex location carefully can do a lot better than what the government provides. See “Child Support Litigation without a Marriage” for the cash flow that can result from having sex with higher-than-median earners. Also the Massachusetts chapter for the example of a custody and child support plaintiff with an Ivy League degree who out-earns Penn classmates by 3.2X via providing part-time care for one child.)

A friend’s wife is the author of “Paying Nannies Under the Table Is the Norm” (Slate):

After I interviewed over 60 potential nannies, and despite my offering paid benefits and overtime, a surprising number declined because being paid ‘over the table’ would affect their ability to qualify for government subsidies.

(i.e., she is surprised that in a country running a $1 trillion welfare state, some people want to keep receiving welfare benefits.)

Tax supports to help families pay for this child care are woefully inadequate, and caregivers’ pay seldom reflects their vital role in our economy. Yet the costs of child care, housing, and healthcare have risen sharply for both parties.

We need to recognize and cultivate talented professional caregivers, by transforming care into a financially viable, long-term career option for the millions of women who choose it.

“We have both devalued work that is historically associated with women, and continue to devalue the lives of the women of color who do the work. Until we as a society value care work, and make sure that all workers are protected by our laws, we will continue to see inequities and crises in the industry as a whole,” said Poo.

The husband proudly posted this article as a Facebook status. Some responses:

Me: What would be awesome is if every childless American would work 90 hours/week to subsidize those of us who have chosen to have kids, but don’t want to take care of them personally.

The author: Women are sole, primary or co-breadwinners in 2/3 of American households. The overwhelming majority of our workforce, that fuels and drives our economy that benefits all who live here, have the need for childcare to be able to work. It’s an economic imperative to make childcare affordable and accessible. … And 80% of women have children.

The author: There’s another side to this argument, it’s not just about the working families but the caregivers that are currently relying on subsidies in many cases to afford basic life-support (housing, healthcare, etc.) Those subsidies come from tax dollars. Nearly half of the domestic workers are immigrants, and working under the table perpetuates the generational cycle of poverty. When domestic workers age and don’t have enough savings in their elder years nor have they amassed social security benefits (despite how small that is) to qualify for social security offsets to medicare plans, their adult children (whether or not they have children of their own) and/or other social safety nets (i.e. welfare) pick up the tab to support their need to live.

Me: I am sure that you are right, but if people with children overall pay less for something, doesn’t that mean people without children will be the ones who have to subsidize them? Where else does money come from ?

The author: … As a whole, our society needs high rates of employment to function. High rates of employment are threatened when the population can’t afford childcare which enables them to work – or if caregivers can’t afford to be caregivers if that makes sense. This disproportionately affects women’s ability to succeed and ascend in the workforce and also on the caregiver side disproportionately affects women and minorities. …

Deplorable: [gently suggests that maybe the real problem is that not working in Massachusetts can pay up to $100,000 per year, tax-free]

The author: Although I understand your point, I don’t believe that the government is doing a ‘good job’ of subsidizing the needy. And frankly, people who work demanding full-time jobs plus overtime hours, should be able to afford to live in or near the cities they work in. The market rates for childcare givers, like jobs in almost every other industry, haven’t moved up to address inflation. Many of us (myself included) make salaries that haven’t changed much while the cost of living has gone up dramatically. This makes the availability of a subsidy not just attractive for some but essential (especially if they have themselves or a family member with a serious illness/requiring heavy health care needs.) It’s complicated, messy & really not serving anyone (or society for that matter) the way it exists today.

The part that I put into bold face ties into the recent Seattle homeless housing plan posting. As the U.S. heads for a population of 400 million and does not build any new cities where people want to live, there has to be a lot of competition for apartments located in walkable pleasant neighborhoods. If government central planners fill up one third of these apartments with people who don’t work then the remaining supply is going to be out of reach for workers like the journalist (since those apartments will be snapped up by people who work in more lucrative fields, such as health care and finance).

The Europeans have dealt with this by limiting housing subsidies for welfare recipients. The result is that they can afford apartments only in undesirable suburbs. Anyone who wants to live in a prime center-city neighborhood in Europe has to work or be married to someone who works (the UK is an exception; a brief marriage or having sex with a high-income partner can lead to child support and/or divorce profits that will enable a non-working citizen to enjoy central London; see this chapter on International family law).

I’m wondering if this drumbeat of articles about how working mothers don’t get enough government cash is an example of how the middle-class portion of the U.S. economy needs to be centrally planned as well. The focus seems to be on “mothers” rather than “women”. This would make sense if the above hypothesis is true because it is “mothers” who can most easily benefit from welfare programs. For example, a woman with no children who applies for a free government-provided house may be placed on a 10-year waiting list.

So if we accept the following assumptions:

  • a woman, regardless of income, wealth, or any other factors, should be able to have as many children as she desires
  • no child should live in poverty
  • every child should live with his or her mother
  • people on welfare as equally entitled to live in America’s most sought-after neighborhoods

then a woman will derive essentially no economic benefit from working at a medium-income job. All that she will do is suffer a loss of leisure time. Therefore, though she would likely never phrase it this way, she will demand to have a spending power and quality of life that exceeds what her non-working welfare counterpart enjoys. Because she is competing with the government to buy or rent an apartment in a desirable neighborhood, the only way that “fairness” can be restored is if the government somehow gives her extra cash. Because it is primarily women with children who can get welfare, the extra government cash should somehow be tied to her status as having custody of children.

Readers: What do you think? Is this a middle-class anti-welfare rebellion in disguise? Instead of the expected revolt against paying higher taxes to fund more lavish welfare, though, what we’re seeing is middle-class Americans saying “I also want to be on welfare”?

[Separately, maybe the observed decline in birth rate is due to the higher population density of the U.S.? “Population Density Key Factor in Declining Human Fertility” says “we find a consistent and significant negative relationship between human fertility and population density. Moreover, we find that individual fertility preferences also decline with population density”]