Wednesday

Welfare reform reduced poverty in America. When will the Tories endorse it?

I attended a talk by Professor Larry Mead at the Institute of Economic Affairs the night before last. He gave his talk in a scholarly, methodical way – quite different from the more openly partisan talk given by Ron Haskins last week. But the message was mostly the same. The big fact is that welfare rolls fell by 60 per cent in America following the 1996 reform package. It was an awesome result. Of course, people like Professor Mead knew very well that such a thing would be attacked as cruel and bad. But one of the impressive things about the American Right is that it arms itself with plenty of facts to counter such assertions:
He gave Federal Poverty Rates for whites, blacks and Hispanics in 1994, 2000 and 2003 respectively:


Whites: 14.5%, 11.3% and 12.5%
Blacks: 30.6% 22.5% and 24.4%
Hispanics: 30.7%, 21.5% and 22.5%
He ascribes the recent uptick in poverty rates to the reduction in US growth since 2000. Even allowing for this, it is very clear that there has been a major reduction in poverty among those who are most prone to it.
Incidentally, the official American government’s definition of poverty is very different from that in Britain. In Britain, ‘poverty’ is defined as people who are much poorer than average. In America, the government defined poverty in 1964 as a particular level of income. That level of income is adjusted each year for inflation. This provides, in my view, a far more useful definition. Under this measure, so-called poverty does not rise because the top one percent gets richer. That is what happens under the British system (see postscript in The Welfare State We’re In , “Why do people talk more about ‘poverty’ now there is less of it?”
What is the difference between Larry Mead and Charles Murray, author of the seminal work, Losing Ground? Professor Mead said that Charles Murray believed that people responded to incentives whereas he thought people did not always make proper calculations about where their advantages lay. He thought people, especially the least able 5%, wanted to be told what to do. That was what the welfare reform programme had done. It had declared, “We expect you to work. If you want the right to benefits, we expect you to work, even if you are a lone parent and even if you have a disability.” (These are not his words but my interpretation.)
However in my view, the same measures could also be seen as a rearrangement of incentives. Only getting benefits if you work looks like a pretty strong incentive to get moving.
Unless I misheard him, Larry Mead said he was staying with David Willetts. An interesting connection. David Willetts has also told me in the past that he knows Charles Murray personally. David Willetts is certainly well versed in welfare reform. But his public pronouncements have fallen well short of the radical reforms that took place in America and was generally endorsed by both these men. Will the Conservative Party ever stand up for radical welfare benefits reform?
One of Larry Mead’s book that I must get is Government Matters: Welfare Reform in Wisconsin. It available from Amazon here or you could try Abebooks.com or click onto any of the Amazon links in the left hand column and then search for ‘Welfare Reform in Wisconsin’.

  1. If we had had welfare reform like America, we could have had this:
  2. American welfare reform was bitterly opposed and not bi-partisan
  3. How to do welfare reform.
  4. Jenifer Ziegler, Cato Institure
  5. Anger among the Tories
This entry was posted in Parenting, Recommended reading, Reform, Welfare benefits. Bookmark the permalink.

4 Responses to Welfare reform reduced poverty in America. When will the Tories endorse it?

  1. Thersites says:

    A good study by the Department for Work and Pensions specifically examined hardship in lone parents — The British Lone Parent Cohort and their Children 1991 to 2001. I quote some of their key findings:

    Living standards rose, on average. Entry to work was the factor most strongly associated with recovery from higher levels of hardship in 1991. Poor welfare and hardship were associated with persisting worklessness.

    Positive child outcomes were also associated with working families — both couples and lone parents who had worked for at least half the study period. Work was particularly associated with better educational and employment outcomes compared with lower levels of achievement among children of workless households.

    We don’t need the Yanks to tell us, British research says the same thing. Work is beneficial & reduces poverty (however it is measured). Welfare does not reduce poverty.

  2. BigBroMan says:

    Only when you create the habitat for something can it continue to thrive, and this is what the welfare state does for the unemployable, uneducated ‘underclass’ in society.

  3. Andrew Brown says:

    It may be true that lone parents are usually better off when they work. But this ought not be ever based on compulsion. Good qaulity parenting is as important as money, and it does not always follow that money secures a better future. So initiaives yes please, but cautiously. And work CAN cause stress, exhaustion, and sometimes illness. So lets explore but not compell. Single parenting is a hard job in itself

  4. Robert says:

    Here I am disabled severely, I’ve been looking for work for five years through the job center, through Remploy, through the Shaw trust, not a hope in hell reason my disability has turned me into this hutched back to consumers ugly person. I was told to lose weight and they sent me a brochure about running to fitness, I wrote back asking can I have some legs please.
    I did not hear from them again, (job Center) the fact is I am disabled I am crippled , and I do need help the sad thing the help is not where it should be.
    Billions are being spent on getting people into work, except where it’s needed at the bottom directed at the disabled for the disabled by the disabled.
    ah sod it.

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