The U.S. Welfare State – Too White, Too Old, Too Republican?
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My libertarian Internet friend Will Wilkinson has a post that deserves some comment. He claims the U.S. welfare state’s benefits go disproportionately to old white Republicans. I suggest some over-simplification here. I’ll note as a preamble that Will’s roost – the Niskanen Center – is an interesting outfit that broke away from the more conventionally libertarian Cato Institute. Your genuine libts at both places do useful work on national defense, law enforcement, and civil liberties.

My summary characterization of Niskanen, frankly not based on much exploration, is that unlike the Cato people, they are congenial to social insurance and public assistance. This is a welcome shift.

Anyway, back to the issue. Will has a bar chart that shows spending on the biggest Federal benefit programs as a share of total Federal spending. In these terms, the biggest programs are Social Security, Medicare, and Medicaid. He lists Social Security Disability Insurance separately.

Will’s focus is the secret love of old white Republicans for the benefits they receive from the largest programs, as well as arbitrary distinctions between “stuff we deserve” and “stuff those people don’t deserve.” This is well-taken. I might cite a book on this topic, The Hidden Welfare State by Christopher Howard. A Google search on that title yields a wealth of additional material.

One of my objections is that the claim of disproportionate benefit by race is exaggerated in several respects. The simplest pertains to the cases of Medicaid and SSDI, both of which disproportionately benefit the poor in general and, in the case of SSDI, non-white recipients.

The second stems from Will’s gloss on the nature of social insurance. Social insurance is a hybrid of aid based on both contribution and need. So yes, the bulk of social insurance goes to elderly because it is founded on replacing earnings of those who can no longer work, including their dependents.

Since the young’s needs are not based on some interruption of their work history, they don’t come in for much aid focused on retirees. The predominance of Social Security and Medicare benefits for the elderly is a feature, not a bug. The same goes for the extent to which benefits for old age and survivors (but not disability) are weighted on white elderly; it stems from the insurance/contributory of the program. They earned more, they get more. Again, a feature, not a bug.

It’s always possible to dial up the need factor in social insurance for the sake of helping minorities or lower-earning workers in general. One needs to balance that objective with political considerations. Political support for social insurance rests on the pillar of contributions. “I paid for these benefits.” (Of course, nobody had a choice as to whether to make ‘contributions,’ since they come in the form of payroll taxes.) Those who have earned less due to historical discrimination by race or gender will contribute less and get less in benefits. Again, a feature, not a bug. Even so, lower earners do get some advantage in benefits, compared to their contributions, relative to higher earners.

What’s incontrovertible is the neglect of the young in poor families, of all races. Absent the protection of social insurance, they are mostly left to depend on public assistance in the form of food stamps, housing benefits, and cash welfare. Food stamp benefits (officially, “Supplemental Nutrition Assistance Program,” or SNAP) have held up relatively well over the decades, housing not so much, while cash welfare, thanks to the 1996 “reform,” has been decimated.

My beef with the metric underlying the chart – and a good chart tends to dominate the commentary in which it’s embedded – is that the more salient consideration is benefits relative to need, not as a share of public spending.

Of course, aid to the young is egregiously low in this respect as well, but aid to the elderly is not necessarily so. After all, the average Social Security check is about $1,500 a month. Hardly enough to live high on the hog if that’s your only source of income, which is true of most retirees. Shares of government spending would be more relevant if it was possible to say that the total of devoted resources was correct and it was only the division of the pie that was wrong.

Another example: the level of unemployment benefits in the chart looks minuscule. The data is from 2015, seven years after the Great Recession. I’d be happy to see higher benefits now, but once again, what matters is the outlay compared to need, where ‘need’ is premised on both wage levels and social-redistributive considerations, as above.

In general, when we reduce analysis of social welfare to simple dollars, we risk missing the underlying purposes of aid. A generous interpretation of such purposes is called for.

As for Will’s ‘Republican’ bit, I’d say that’s 75% trolling. But why not.

P.S. Right on cue, Google drops a turd in my ad space. It’s their world, we’re just living in it.

 


Comments

The U.S. Welfare State – Too White, Too Old, Too Republican? — 1 Comment

  1. It especially makes no sense to talk about outlays as a fraction of total public spending when the outlay has dedicated funding. Maybe excess federal outlay over the dedicated funding as a fraction of public spending. Unless the libertarian plan is to reduce the outlay but not the dedicated funding. Tht seems counter-productive, but we are talking about libertarians.

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