So asks Matt Zwolinski in his first argument in favor of a guaranteed minimum income. Person W works and makes income, some part of which is seized by the government and sent to person D, who doesn’t earn the guaranteed minimum. Currently, several layers of government do this in a variety of ways with a a variety of programs. Traditionally, welfare has been a local matter. Zwolinski suggests replacing these programs with a check because it would be cheaper to administer. Other things equal, he suggests the total tax bill would decline. From a principled libertarian standpoint, government theft is still present. It’s smaller, however.
Will other things remain equal? That’s the critical question. They won’t. The individual states administer welfare according to the requirements of that state. These requirements vary and they are restrictive. A guaranteed minimum income would override these restrictions and surely increase the overall level of money transfers and taxes to support them. In addition, nearly all states have to have balanced budgets for their operating budgets. If the federal government passed a guaranteed minimum income, the state constraints on welfare budgets would be overridden. The overall level of welfare would surely rise sharply.
Welfare is difficult to get and many people regard it and the persons on it negatively, including some of those on it and those not on it. Many people don’t want to be on welfare, subjected to a case worker’s eyes and supervision. Others look down on those on welfare. The norm is to work and provide for oneself and one’s family. With a guaranteed minimum income, this norm is overridden by the federal government. Living off of others replaces it and becomes the norm. Both on the demand and supply side, if the psychological and material sanctions against welfare are diminished, we will see more welfare. The guaranteed minimum income will make welfare more acceptable and more accepted. The overall welfare bill will go up in the same way that the use of food stamps has gone up. Just as agricultural subsidies have come back with a vengeance after being reduced for awhile, the guaranteed minimum income will become something impossible to reduce much less eliminate. It will be more difficult to reduce than state welfare programs because of its high visibility and a nationwide lobby that favors it.
Increasing welfare benefits is a political chore, facing legislative obstacles. The welfare constituency is disunited. Increasing the guaranteed minimum income presents a simple and easily identifiable goal for both their lobbying efforts and politicians running for office. Those who now make political hay out of raising the minimum wage would have a new field to play in.
There are a number of disincentive effects of a guaranteed minimum income, and Zwolinski mentions several of them. I won’t discuss these.
A guaranteed minimum income federalizes welfare. Power flows to Washington and away from individual states, individual localities, private charity and individuals. This goes exactly in the wrong direction. Coincidentally, I wrote a blog recently on some of the negatives of federal funding of anything.
2:51 pm on June 18, 2014
