Tuesday, April 18, 2017

[NJFAC] "Supply Side Economics, but for Liberals"

             Are government assistance programs disincentives to work?  Clearly, some are and were designed to be that way. Social Security is a prime example. Here Neil Irwin argues that research now shows that food stamps, the Earned Income Tax Credit, and child-care subsidies are linked to more work rather than less.
            Other programs may have negative effects on the will to work. Disability benefits are supposed to keep people who are truly sick and disabled from having to work and that is a plus. But do they keep out of work people who should be working? That is a subject for another day, but it's pretty clear that when job markets are lousy and pay is low, as they have been for a long time for millions of workers, more people will apply for benefits, whether or not they are so disabled as to be unable to work. 
            Irwin does not delve into another issue: Do unemployment benefits keep many people out of the labor force for a longer time than if they had no benefits? Some research shows that the difference is very small. And is that a bad thing for the unemployed? If they find a job closer to what they want, they and their employers will be better off in the long run.  
            Finally, there is a larger point in this whole discussion: should our goal be to have as many people as possible working all the time? Aside from the social and moral issues the question raises, I think there is a growing army of smart robots who may provide an answer of their own.
Frank Stricker, NJFAC, and author of Why America Lost the War on Poverty.



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