Chapter 76 Section 3 Growing Reliance on Welfare

If the surge in crime over the past thirty years is one starting point for social policy, the almost equally compelling issue of welfare dependency is another (I will touch on some of these connections later.) Since the United Kingdom became a de facto welfare state in 1949, public spending on social security has (actually) increased sevenfold, from less than 5% of GDP to about 12% today.It accounts for almost 1/3 of the total public expenditure.It continued to grow in real terms when I started as Prime Minister.This has remained the case since.Of course, conflating contributory and non-contributing benefits, and benefits that everyone enjoys with means-tested benefits—retirement, housing, allowances, and income support for a single parent—is More or less misunderstood.

However, these rough figures illustrate two important issues. First, British society (or at least the British government) asserts that social security is not only more important than other items, since the share of public expenditure and GDP for a particular item reflects the importance that is assigned to it , and its relative importance is actually increasing". The budget for social security is twice that of health, the next big expenditure. Even more, significantly, it is perhaps six times the budget for maintaining the rule of law. Second, despite the general and enormous prosperity of the past 40 years, more people than ever are demanding more from taxpayers to maintain their or their family's standard of living.Thus, it has been argued that despite the economic growth since 1979, "the poor have gotten poorer".Recent official statistics on "below-average income households" show that, if housing costs are taken into account, the income of the bottom tenth of the population fell between 1979 and 1991-1992. 17%.But their earnings remained the same when housing costs were not taken into account.Even without a comparative account of the two cases, these figures are highly misleading because they are essentially untrue.In this series of statistics, "income" does not reflect what this group really earns, and in particular, it does not equate to their standard of living.Of this group (excluding pensioners), only about half rely on income-related Social Security benefits.Many in this group say they have no income, but actually spend more than the average for the population as a whole.About 70 per cent of those with "zero income" before housing costs (according to the "below average income household" statistics) make up half of Britain's top spenders.

It might be a mistake to even think of these people as a "group" anyway.Their ingredients change as often as their circumstances change.So, these numbers don't prove that those people's incomes have fallen, but there is a lot of evidence that their living standards have improved.Most importantly, within this group there was a large increase in consumer durables—refrigerators, washing machines, central heating, telephones, video cameras, etc.Because of these facts, the crude picture of "the poor getting poorer" is simply not credible.By contrast, it is reasonable to conclude that the Social Security budget encourages antisocial behavior, including reliance on benefits, and calls for serious reform.

In the field of dependency welfare, as in the field of crime, it was mostly American scholars who asked some of the boldest and most important questions.Charles Murray's first research report "Backward - American Social Policy 1950-1980" shows that in recent years, the US federal government's tolerant policies aimed at reducing poverty have produced counterproductive effects and instead increased poverty.Due to the government's policy, people feel that work is not worth doing; not only is it less distressing to have children without marriage, but it is more economically beneficial; at the same time, the punishment for crimes is also reduced, and the punishment for student misconduct is relaxed. and truancy, all of which change the rules of the game.Those who were the most short-sighted, the least self-disciplined, or least supported from home, responded very quickly to the new norm and began to form what Mr. Murray and others called the "underclass."Subsequent surveys of the UK found a similar pattern, with increases in illegitimate births and crime.

Much of the attention in the "welfare-dependent" debate has been on the impact of taxes and the Social Security system on families and their implicit encouragement of single-parent families.But it is equally important to ensure that young people are motivated, skilled and have the opportunity to work: since 1979 we have tried to do this in several ways in the UK.We feel that an allowance for a certain period of time would be the worst start to the life of these youth, and a bad example to their fellows, to give to idlers.Therefore, for every 16- and 17-year-old dropout who cannot find a job and does not go to full-time school, they must be guaranteed two years of training, and they are generally not allowed to directly enjoy benefits. The "restart" plan implemented in 1986 The focus is on those who have been unemployed for more than two years, have not been reemployed, and have not undergone training to receive benefits under the law.Also, those who are trained but not serious about job hunting may see their benefits cut.The new "Jobseeker's Allowance" will provide more incentives for those willing to work, and further restrict the conditions for enjoying benefits.

In general, assistance to non-compliance needs to be accompanied by constraints to prevent people from taking benefits and not working.They may do so for several reasons - because they are demoralized or feel that going to work is not worth it, or because they are paid more for temporary employment in the black market economy.Furthermore, we must resolutely abandon minimum wage laws or any other regulation that destroys low-wage, low-skilled employment if we are going to get real jobs for people who start working. But if we're wrong about "the poor," we'll never come up with or implement the right policy options to wean people off welfare.Yet another American scholar named Gertrude Himmelfarb has done the most exhaustive survey of the historical background of our present conception of poverty.Since at least the Elizabethan era, the poor have been divided, both in mind and in administrative measures to help the poor, into those who "deserve relief" and those who "do not deserve relief."While the distinction has been diluted and less pronounced than it once was—not because of a recognition of the damaging effects of the past emphasis on urbanization—it persists, and the safety net of welfare has been widened and deepened.Indeed, to anyone who remembers pre-war Britain, the notion of "poor people" as an identifiable group with the same characteristics seemed wildly unrealistic at the time.

In Grantham and similar towns across the country, we know of families at the time whose breadwinners had had hard times and experienced great hardship, but they never accepted handouts - even though they saw it was state Relief One is determined to preserve their decency at any cost.Many a dignified pensioner would have said then, "I'm self-reliant and I've never taken a penny from anyone." Taken to extremes, this sense of self-reliance must have brought misery.Neighbors would tactfully try to help him.Unfortunately, some people who take pride in their hardship are very similar to those who don't want to rely on welfare.

In contrast, there are other people--I have met them many times since I came to London--to whom self-reliance and decency are of little importance, and who are willing to depend on the state rather than make extra efforts to improve their own Fate may enable their children to have a better start. The fact that the first group values ​​social status and the second group ignores shame means that social pressures are generally low, so most people in the middle - like us - are more likely to find a job , to provide a livelihood for themselves and their families.This approach may seem heartless.But a society that encourages such virtues as effort, frugality, self-reliance, and family commitments will produce people with greater self-esteem.Thus, happier than people living in a society that encourages them to feel useless, unspirited, and discouraged (while not being a burden to others).Even if this is not the case, the state and society must be impartial in granting compassion.It is unjust to treat a person who has made an effort the same as a person who has not.This injustice not only demoralizes those who benefit from it, but also outrages those who do not.

At some point in this century—it’s hard to pinpoint now—so many Western policymakers started talking and acting as if it was “the system” rather than individuals—or even luck—that made some poverty.We are thus caught in the trap of thinking that poverty - and there is no need to enter the minefield of relative and absolute poverty - is a "problem" of economic policy that can only be addressed through the redistribution of wealth and income in a variety of flexible ways. "solve".So we come back to the belief that poverty is a cause, not an effect, of irresponsible or deviant behavior.

Most people who speak this language do so for noble motives.No one has more noble motives than Keith Joseph, whose speech as Minister of Social Welfare to the Association of Preschool Playgroups in June 1972 is the most unconventional statement about this approach.Drawing on research at the time, Keith argued that a "poverty cycle" was at work, whereby "the problems of one generation seem to recur in another".This claim by Keith breaks important new ground, as it draws attention to the effects of "bad parenting of children" not only on these children, but on their children as well.But Keith doesn't ask whether the state, through its welfare policies, undermines individual responsibility and self-help, like a third bad parent at work.Indeed, while he is advocating for parents to educate their children better and to practice more family planning, he also advocates that the government should intervene through different welfare and possibly tax break programs.It would be nice if a sharp analytical thinker like Keith was doing the analysis right and prescribing the wrong medicine (as he later admitted), and he illustrates how, on both sides of the Atlantic, governments of the right and the left are serving us right now. The problem creates conditions.The right has focused on "targeted" welfare, giving benefits to those whose behavior is most likely to be adversely affected by the welfare.The Left increased the overall burden on Social Security benefits, putting the benefits in a bind, and even then "poor" taxpayers had to contribute to them.

Much less research has been done on the issue of dependency benefits in the UK.We know what we have done to increase the size and speed of our social security spending, and have seen what has happened in the United States, so we should expect the same undesired gains from the British government's social policy. See the consequences.In fact, we've already achieved that—and it has contributed to the development of the third problem, the weakening of the traditional family.