Welfare: A subtle destroyer of the human spirit?

Albert Hirschman called it the perversity thesis — the claim that an "attempt to push society in a certain direction will result in its moving all right, but in the opposite direction". The best example of thesis is in arguments against cash-transfer programs for the non-working poor.

It’s the perversity thesis that informs Iain Duncan Smith’s recent rhetoric on welfare reform. In 21st Century Welfare, the UK Secretary of State for Work and Pensions writes:

The benefits system has shaped the decisions of the poorest in a way that has trapped generation after generation in a spiral of dependency and poverty. This has cost the country billions of pounds every year in cash payments and billions more in meeting the social costs of this failure.

The only way to make a sustainable difference is by tackling the root causes of poverty: family breakdown; educational failure; drug and alcohol addiction; severe personal indebtedness; and economic dependency.

These problems are interrelated and their solutions lie in society as a whole. However, we must recognise that the benefits system has an important role to play in supporting personal responsibility and helping to mend social ills.

So according to Duncan Smith, by trying to help people without jobs and money, the government has only made the problem worse. Welfare has deadened the desire to work and created an ever growing population of lotus eaters — people who behave as if they are drugged. And that’s exactly how Franklin D Roosevelt described cash handouts to the unemployed. In his 1935 State of the Union address, he said: "dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit."

The argument that policy makers need to be cruel to be kind has a long history. It begins with an assumption about human nature. In his Memoir on Pauperism, Alexis de Tocqueville insisted:

Man, like all socially organised beings, has a natural passion for idleness. There are, however, two incentives to work: the need to live and the desire to improve the conditions of life. Experience has proven that the majority of men can be sufficiently motivated to work only by the first of these incentives. The second is only effective with a small minority. Well, a charitable institution indiscriminately open to all those in need, or a law which gives all the poor a right to public aid, whatever the origin of their poverty, weakens or destroys the first stimulant and leaves only the second intact.

According to Tocqueville, the deadening of the incentive to work is only the start of the problem. Ultimately, giving money to poor people threatens civilisation itself:

The number of illegitimate children and criminals grows rapidly and continuously, the indigent population is limitless, the spirit of foresight and of saving becomes more and more alien to the poor. While throughout the rest of the nation education spreads, morals improve, tastes become more refined, manners more polished—the indigent remains motionless, or rather he goes backwards. He could be described as reverting to barbarism. Amidst the marvels of civilisation, he seems to emulate savage man in his ideas and his inclinations.

For some reason, many conservatives seem to think that dark skinned people are especially susceptible to the corrupting effects of well meaning attempts to lift them out of poverty. In the US modern debates over the ‘underclass’ often assume it’s a problem concentrated in black communities.

So here’s a question of Troppo readers — What evidence is there that income support has drug-like effects that undermine people’s ability to actively pursue their own self-interest? Is this something we can test empirically or is it always going to be an article of faith that people are allowed believe or reject depending on which political tribe they belong to?

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Island View
10 years ago

I posted on a similar theme yesterday in response to Gary Johns’ nasty little piece in the Oz. Of Poverty and the Northern Territory Intervention

Following the “success” of the NT Intervention expect to see more cruel-to-be-kind policies from Abbott (to be quickly adopted by the ALP)

Patrick
Patrick
10 years ago

I think Tocqueville was rather wrong! Two factors seem important to his analysis.

The first one is that to the extent that only a proportion of the population are motivated by additional luxury, that proportion is presumably almost all non-poor.

A more important factor might be the extent to which poor people really believe that they can improve their lives through work. A well-paid professional rarely doubts what s/he can do with an extra $x dollars, nor what they must do to get it.

In such clarity and so seemingly accessible, one could imagine that the trade-off would often seem compelling.

I’m not sure, however, that this debate is really apposite the plight of aborigines in Australia!

Richard Tsukamasa Green
Richard Tsukamasa Green(@richard-green)
10 years ago

I remember writing an essay in university about the possibility of a backwards bending labour curve where increased wages lead to less work – in more jargonless speak, where people get enough money to buy the stuff they want from less work, and then choose more leisure because they prefer it to more consumer goods. There’s a long list of experiments to try and figure out if this happens in real life, notably among taxi drivers in New York and Singapore.

What I liked though is that the argument was frequently used many decades past to argue against minimum wages and more interestingly, increased wages for native labourers in French African colonies (melanin induced lethargy again).

We do live in a world where it has been argued that those with little need even less to prise them from their hammocks, whereas those with plenty need large tax cuts simply to stave off idleness.

Tim
Tim
10 years ago

Perhaps someone should look at the effect of the handouts given to Wall Street firms in the wake of the GFC. Don’t recall there being too much concern that sort of corporate welfare was going to lead to a deadening effect on work…?

conrad
conrad
10 years ago

I think the first quote:

“The only way to make a sustainable difference is by tackling the root causes of poverty: family breakdown; educational failure; drug and alcohol addiction; severe personal indebtedness; and economic dependency. These problems are interrelated and their solutions lie in society as a whole.”

shows how deluded many conservatives are, even when they can obviously recite the reality. What I’d like to see is some sort of estimate of the size of the effects here. If it turns out that economic dependency is but a small part of the picture (and lets face it, how many people want to be poor all their lives?), then people are just complaining about trivialities at the expense of the important stuff.

I could also add a further politically incorrect factor to that list, which is that some people are just born unlucky. If you’ve got a verbal IQ of 75, for example, it’s very unlikely you are going to have a very easy life, especially now a big propotion of jobs for people digging holes are gone, no matter what theories of motivation etc. people wish to apply to you.

murph the surf.
murph the surf.
10 years ago

The last few threads about inequality have been fascinating – both for what they postulate and how detached from reality most of you seem be ,to me anyway.
How on earth can Don Arthur ask “So here’s a question of Troppo readers — What evidence is there that income support has drug-like effects that undermine people’s ability to actively pursue their own self-interest? Is this something we can test empirically or is it always going to be an article of faith that people are allowed believe or reject depending on which political tribe they belong to?”
Come to Kempsey and ask the teachers, the DOC’s workers ,the housing agency staff , the police and any resident you bump into and they might provide you with data for your empirical evidence crunching models to churn over.
Is it an article of faith? No it is right before our eyes , permeates our lived experience and while so many work against it’s destructive effects how much better to have detached data processors telling vus we are all deluded.
Fraud.

John Turner
John Turner
10 years ago

I recall a reputed conversation between Aneurin Bevan and a coal miner during a UK coal crisis fifty years ago.
The miner was reported as an excellent miner but with poor attendance.
Bevan, as Chancellor, was visiting the mine and asked, “Why do you only attend work four days per week?” and the miner replied, “Because I cannot live on the money from three days!”

derrida derider
derrida derider
10 years ago

Murph, you’re mistaking cause and effect. So only the underclass get welfare – who knew? It’s called a targeted system – if it were otherwise you’d be whinging about “middle class welfare”.

But are they getting welfare because they’re in the underclass or are they in the underclass because they’re getting welfare?

Internationally, the size of an underclass is inversely proportional to the generosity and coverage of welfare, and the underclass existed prior to the welfare state. So it should be obvious that they’re mainly getting welfare becauae they’re in the underclass, not the other way around.

That you think these people are scum is neither here nor there – the question is whether welfare is making them more or less scummy. And I don’t think it does a lot either way – the causes and cure for scumminess lie outside the welfare system. Meanwhile at least it gives their kids some food, reduces the propensity to crime and begging, and gives a safety net to the many non-scum who fall on hard times. All of which is why the welfare appeared not long after universal suffrage was gained.

TimT
10 years ago

Nah Tim, concern about billions of dollars of government support for unproductive large banks/car manufacturers/whatever is a common theme in US conservative talk.

TimT
10 years ago

Isn’t ample evidence of dependence on welfare to be found in communities of the generationally unemployed?

Andrew Norton
10 years ago

There was a cultural revolution in Western countries where people began to place more emphasis on material acquisition and personal advancement. Keith Thomas’s book *The Ends of Life: Roads to Fulfillment in Early Modern England* is very interesting on this. Of course the Clive Hamiltons of the day denounced it. But as technology and trade made improving personal circumstances possible for more and more people, the idea took hold to the point that (as in this post) we see departures from it as abnormal and requiring explanation, such as the welfare state.

That said, I have a pretty Tory view of human nature on these things. Welfare certainly isn’t the only cause of social dysfunction, but if you pay people without very attractive alternatives to do nothing, nothing is what a large proportion of them will do.

I think Noel Pearson is pretty compelling on passive welfare being a disaster in indigenous communities, interacting with a lack of local economic opportunties and a still substantially pre-modern culture.

Alphonse
Alphonse
10 years ago

“drug-like effects that undermine people’s ability to actively pursue their own self-interest” or the bracing effects of the unemployed conning thieving begging or mugging a livelihood?

I’m all for self-reliance, but I’ll still go with social security, soporific or not.

conrad
conrad
10 years ago

Murph,

Speaking of the type of groups you’re talking about, I’ve worked with people that can’t read no matter how hard they try and learn (and most of them would like nothing better than to be able to — even the 8 year olds), and it’s pretty obvious why many of them end up or will end up on welfare, and, as far as I can tell, causation pretty much points one direction. Some people are just unlucky.

Russell
Russell
10 years ago

“What evidence is there that income support has drug-like effects that undermine people’s ability to actively pursue their own self-interest?”

One thinks of the Rothschilds and other wealthy families where inherited wealth (something got for nothing) led to decadence and decline. On a somewhat smaller scale I can think of two friends who came to grief with credit – which seems like something for nothing: they kept buying and buying stuff … one had to sell her house and move to cheaper accomodation.

On the other hand, recipients of the disability pension don’t sttract quite the same amount of concern for their likely corruption – because they’re not dodging an obligation to reciprocate with work? Once we complete the process of moving people from unemployment benefits to disability benefits we may hear less of this ‘welfare corrupts’ complaint.

derrida derider
derrida derider
10 years ago

Yes Russell – it’s the old conservative nostrum isn’t it? Don’t give the poor money because it demotivates them, but make sure you give the rich money because that motivates them. It puts you in mind of the JK Galbraith line about “the timeless quest of conservatives everywhere – to find a higher justification for selfishness”.

BTW Andrew, I don’t find Pearson persuasive at all. He makes the same mistake -“degraded people get welfare, therefore welfare causes degradation”. Never mind that the degradation long preceded the welfare. He’s on firmer ground when talking about the lack of economic opportunity, and the way that lack of opportunity gives people no incentive to better themselves. But that’s not a welfare issue.

Peter Whiteford
Peter Whiteford
10 years ago

If you look at the latest HILDA Report, in 2007 about 29% of the working age population received some welfare payments in the previous financial year (down from 34% in 2001). However, only around 10% of the working age population received more than half their income from welfare payments and 6% received more than 90% of their income from welfare payments.

Between 2001 and 2007 about 19% of the working age population recived more than 90% of their total income from welfare in at least one year, but only 1.9% of the working age population received 90% of their income from welfare in all seven years.

So quite a lot of people are welfare reliant at least for some period but very few are welfare reliant for very long periods.

Now people who leave welfare have a reasonably high chance of coming back on at some stage; within two years about 34% of those who left payments in 2005 were back on in 2007 – but this had fallen from 45% five years earlier.

This suggests to me that other factors apart from the existence of the welfare system affect welfare reliance – like the state of the economy, living in very remote areas with limited job opportunities and your level of education, as well as ill-health of various sorts.

Badly designed welfare policies I think can have a negative impact, but it is important to note that this is not the same effect on everyone. I think that the UK system for example has worse features than Australia – basically it doesn’t pay at all to work less than 16 hours per week – and it is interesting that the Welfare Reform document that Don linked to actually proposes to make the UK welfare system much more like Australia’s.

Tel
Tel
10 years ago

Man, like all socially organised beings, has a natural passion for idleness. There are, however, two incentives to work: the need to live and the desire to improve the conditions of life. Experience has proven that the majority of men can be sufficiently motivated to work only by the first of these incentives. The second is only effective with a small minority.

Duh! If I had plenty of free income I would never be idle, I’d be doing heaps of stuff, the stuff that I enjoyed doing because it suited me. An economist might call me idle but with plenty of free income I could say, “Stuff the economists!”, which no doubt is what any mildly intelligent person would do which is do doubt why regimes don’t give mildly intelligent people such opportunities. Thus necessitating the massive inefficiency that we live with on a daily basis.

While I was running around busily suiting my fancy, I’d be generating valuable economic activity — enjoyment for myself. Happily, it would not be taxable economic activity, nor would it be statistical economic activity, because I wouldn’t be telling anyone what I was up to.

If Tocqueville is right, why do so many people work full time?

In many industries employers tend to push their valued employees to work full time… crazy though that is. Also, when it comes to buying a house, you tend to be competing against the next guy who wants to buy the same house.

Why don’t they take Clive Hamilton’s advice and ‘downshift’?

Errr, the gradual shift toward increasing part time work started several decades before Clive Hamilton woke up and paid attention. Although I sincerely pity anyone who attempts to follow Hamilton’s advice on any matter whatsoever, to be fair it must be said that Clive Hamilton never pretended to be doing anything more than documenting an existing ‘downshift’ trend (even when he managed to document the start date of this trend wrongly).

Yes Russell – it’s the old conservative nostrum isn’t it? Don’t give the poor money because it demotivates them, but make sure you give the rich money because that motivates them. It puts you in mind of the JK Galbraith line about “the timeless quest of conservatives everywhere – to find a higher justification for selfishness”.

Unlike socialists who quest to find a higher justification for running everyone’s life… but the rich really don’t need anyone to give them money, they are excellently adept at taking it. Consider the big bankers for instance, you might think they were recently “given” bailouts but you would be quite wrong — they successfully took the proceeds of a well executed shakedown, threatening to smash the economy if the loot wasn’t handed over. Needless to say, at least in the US the economy is headed for a crash anyhow but there will be more shakedowns before it’s over.

Here’s a modest proposal:

Anyone applying for any kind of welfare gets a randomised factor generated which stays with them their entire life via the magic of central-government database. The factor might be somewhere between -5% and +5% which is an adjustment to all government payments made to that person (multiplier for the “correct” valuation), and it also magically applies to all taxes paid by that person (should they ever get off welfare).

People who never apply for any sort of welfare automatically get the neutral factor of +0%

We keep statistics for a few generations to correlate our new random factor against lifelong improvement from the time the person first applied for welfare (and I guess we might be able to use the neutral factor people as a control group, but that’s arguable).

Hey, there’s a reason I’m not running for PM :-)

rog
rog
10 years ago

Tel, are you saying that wealthy people are more active or pursue more pleasure? The terms are not synonymous.

Paul Bamford
Paul Bamford
10 years ago

Duh! If I had plenty of free income I would never be idle, I’d be doing heaps of stuff, the stuff that I enjoyed doing because it suited me…

While I was running around busily suiting my fancy, I’d be generating valuable economic activity — enjoyment for myself.

There’s the premise for a new reality TV show hidden in there: “Paris Hilton for a Day”.

murph the surf.
murph the surf.
10 years ago

DD,
you are 100% wrong and throw in a few insults to boot in your estimation of my thoughts.
These people aren’t scum – the lovely term for you to try and pin on others but are the brutalised victims of a system that tries to help but fails.
This blind adherence to doctrine is the very weakness that distorts efforts to improve things.
While the middle classes receives various forms of support that is a separate debate.The welfare recipients in Kempsey are failed because the system judges that they have been given all the support that they deserve and yet they still don’t reform. Part of the failure is a consequence of compassion exhaustion and the grinding down of the spirit of those workers who try to enhance the efectiveness of the support.
No where have I mentioned that welfare should be cut – it is plain to all but the self absorbed that the system you support is crap and isn’t achieving anything other than keeping a self interested group in it’s preferred position.
By all means give more but try to develop more effective systems .I can’t offer any concrete plans or thoughts here, I’m not a specialist in this area of work but if these people administering the welfare were doctors all their patients would be dead.
But hey, don’t worry DD you know you are right even as the people you profess to help spiral into ever deeper depths of despair- they just don’t know how lucky thy are .

Alphonse
Alphonse
10 years ago

Murph,

About your medicine analogy. DD’s point is that welfare is largely palliative. Curatives largely lie elsewhere (economy, education, health, etc)

conrad
conrad
10 years ago

“it is plain to all but the self absorbed that the system you support is crap and isn’t achieving anything other than keeping a self interested group in it’s preferred position.By all means give more but try to develop more effective systems .I can’t offer any concrete plans or thoughts here,”

I’ll admit, I don’t think the current system is crap (it’s much better than many places), and I don’t think I’m self absorbed either — and curiously the group I think benefits the most from self interest is the group you deem isn’t related (I think they are — it’s basically wasted money that could be put to better use).

Try thinking about the last sentence you mentioned — the reason you can’t offer concrete plans is because there are no simple solutions to be had, so there’s no point just getting angry about it. For example, let’s say you take a bad case from Australia’s most notorious welfare dependent recipients — say, a 22 year old male that has been sniffing petrol for the last 10 years. This person’s brain will be basically cactus, and they won’t be good for much at all. Would you like to give them $230 a week or pay 10 times more when they go to jail instead (and wreck other people’s lives)? You might like to think of this as damage limitation rather than helping people, and whilst damage limitation is going on, you can try and think of solutions that would probably take decades to implement.

Peter Whiteford
Peter Whiteford
10 years ago

Also to clarify what I was saying.

Rather a lot of people receive welfare over their potential working lives, but only a very small proportion stay on welfare for very long periods. In addition, the proportion who receive any welfare (apart from family payments) or who are long-term welfare recipients has fallen very significantly over the last 10 years or so – for most age groups it has close to halved.

Now this must mean that the welfare system itself is not the only source of the problems in Kempsey. Perhaps welfare facilitates inaction by some people so that they don’t surmount their problems, but there are other people who receive welfare and do surmount very similar problems.

The other thing we do that could be addressed is that current housing benefit policies either tend to concentrate people with problems in public housing areas – which is a consequence of increasing targeting of public housing to the poor; and we now provide inadequate rent assistance so that people in the private rental market are less able to afford to live in places where there are greater job opportunities.

Labor Outsider
Labor Outsider
10 years ago

The problem with this debate is that it is focusing too much on a binary welfare good/welfare bad and not enough on how the design of welfare affects work incentives and hence poverty traps. Most importantly, it is possible to have both reasonably generous welfare systems and strong work incentives if you get the design right. I recommend that people read the OECD’s Benefits at a Glance publication (and associated research) to get a better sense of what works and what doesn’t.

murph the surf.
murph the surf.
10 years ago

The argument has to move to examine alternative startegies as LO suggests but I am heartily sick of the relfex defensiveness of those supporting what some here have termed a palliative response.
As an outside observer I don’t see a broad distinction between those welfare efforts aimed at education or skills enhancement and the more direct forms of financial support.It is all welfare up here.
This might seem an extreme set of cases to those from elsewhere but this valley is full of third and fourth generation welfare dependent families.
So don’t bother to try and startle me with examples of intellectually impaired drug users- try having them in a family of 9-10 some of whom are being fostered , others victims or the offspring of incest and anyone over 8 needing to be able to fend for themselves.
What was Don Arthur’s question again?
Perhaps all those working to try and help the disadvantaged are truly motivated by a generous and ample supply of love for all and a moral obligation to work for equality of opportunity but it looks like a lot of arsecovering and blame shifting to me.

murph the surf.
murph the surf.
10 years ago

No I’m not saying the welfare programs aren’t making a difference .
They are supporting and maintaining dysfunction.The people trying to help become overwhelmed and give up.
Do you think this acceptable?
It is hard to imagine why other methods aren’t given a greater opportunity to make a long term positive difference.Regardless of how that positive change comes about the current state of affairs should be seen as aa well intentioned failure.

murph the surf.
murph the surf.
10 years ago

No.They need to change and as I said above I’m not the person to ask this question of.One thing Troppo and LP have taught me is that public policy formulation and implemenation is very difficult but also requires very subtle work.
LO cited work from elsewhere and most of my response is at the automatic assumption that a challenge to the orthodoxy is dismissed , perhaps only in part , because it comes from the conservative side of politics.
Your specific question needed a reply and it seems to have disquieted some readers that I think welfare has failed and has induced a profoundly negative situation in Kempsey.

Mel
Mel
10 years ago

Don says: “So here’s a question of Troppo readers — What evidence is there that income support has drug-like effects that undermine people’s ability to actively pursue their own self-interest? I”

Seek and ye shall find. This is from the SBS indigenous program Living Black:

“While cannabis use is declining amongst the general population, it’s on the rise in Indigenous communities.”

“Experts say while cannabis use nationwide has decreased over the last decade, in Indigenous communities it’s been steadily rising. According to the latest national data, released in 2005, almost a quarter of Indigenous people over 17 were regularly using cannabis. This compared to 11% of non-Indigenous people over 14. Teenage boys and young men are most likely to take up cannabis. Alex – not his real name – is 21. He’s been smoking the drug since he was 11. He spends around $250 a week on his habit either by using his Centrelink pay cheque or by doing odd jobs. ”

“JOHN CHARLES: You’re more or less involved in a group and you’re, you’re stuck in that circle. And when it’s your pay day you’ve got to more or less shout your mates and then you’re stuck in that circle, and then everybody knows when it’s the next person’s payday. ”

http://news.sbs.com.au/livingblack/high_art_564342

And here is Noel Pearson on the ABC’s Australian Story:

“When we say that things are serious in Cape York, we don’t say it lightly. We have 93 percent of our people who live on welfare. There is a terrible health situation in Cape York. Alcohol and substance abuse is killing our people. And in confronting this issue, we as leaders have had to be honest with ourselves, and have had to firstly admit that we need to talk about grog and those hard issues that primarily policy makers and other indigenous leaders and governments are frightened of raising in the public. So we’ve undertaken a tough and relentless campaign to admit to the Australian public that we have a situation in Cape York that is caused by our own doing. ”

“We’re now at a stage where we’ve got to take action, because foetal alcohol syndrome is a widespread problem now.”

http://www.abc.net.au/austory/transcripts/s723570.htm

A few minutes googling and you’ll find the same story repeated time after time after time.

Mel
Mel
10 years ago

One more interesting data point:

“It has been estimated that the prevalence of FASD [Foetal Alcohol Spectrum Disorder] in Australia is 0.06 per 1000 live births, and even higher in Indigenous populations at 8.11 per 1000 live births (Elliott, 2008). ”

http://www.druginfo.adf.org.au/newsletter.asp?ContainerID=foetal_alcohol_spectrum_disorder

Indigenous kids face 135 times greater risk of developing FASD than other Australian kids. With outcomes like these I think it’s hard to argue that the current system isn’t broke, at least in relation to Aboriginals.

conrad
conrad
10 years ago

“I think welfare has failed and has induced a profoundly negative situation in Kempsey.”

I’m not sure welfare has failed — this would imply that the situation was better beforehand. Were the people you are referring to better off before welfare? Even if it did fail, the problems it causes go one way — at least with this group, welfare causes the problems but taking it away doesn’t necessarily fix them.

murph the surf.
murph the surf.
10 years ago

There should be somewhere and somehow a more suitable response than that posited by Conrad ie take the welfare away and things won’t be any better.
That is not a satisfactory option under any decent plan – the implementation of assistance just needs to take other froms with other methods being employed.
I deplore the local politican’s response – the rather glib String-em Up Stoner.
As an example his plan to help the local crime problem is basically more incarceration.
The local supporters of Stoner think this is wonderful but this failure to address the complexity of the problems in welfare dependent populations makes the necessary adjustments more difficult to advance or even for the general population here to consider.
This feeds into another failure- the disenchanted general population will need to be part of any comprehensive plan to improve things but they are being alienated by the crime and destruction of their property. One survey of population growth for NSW showed no expected growth in this shire till 2030.This being a beach side area on the east coast if any of you want a bargain here is the place to look.
There shouldn’t be any sympathy of One Nation style politicians but intransigence about how welfare measures are the best of all possible options fails everyone.

conrad
conrad
10 years ago

“That is not a satisfactory option under any decent plan – the implementation of assistance just needs to take other froms with other methods being employed.”

I think that other stuff needs to be done also — but I don’t see taking away welfare doing any good. Actually, for the most part, I basically agree with LO, and I think that just getting rid of disincentives and having reasonable training schemes are good for a fair chunk of people on welfare (probably most looking at the stats from Peter Whiteford) — but those policies would basically target people who want to get off anyway and just don’t due to poor government policies acting against them (EMTRs etc.). I don’t see why these couldn’t be fixed, apart from dithering political parties.

Alternatively, if you are looking at the bottom of the barrel, which appears to be what you were first complaining about, then I believe almost nothing is going to work, and you probably want to think of policies that will fix things up in 30 years from now (i.e., a generation — possibly more). If you want to go slightly up from the bottom of the barrel, then take Peter Whiteford’s suggestion and increase rent assistance. You could then get rid of all public housing. Slightly off topic, but it’s curious that they are still building big ugly concrete blocks for public housing, even though this will no doubt cause problems for decades.

Paul Bamford
Paul Bamford
10 years ago

it’s curious that they are still building big ugly concrete blocks for public housing

They are? Which they and where are these blocks going up? Just curious.

Andrew Norton
10 years ago

Yes, public housing is one aspect of the welfare state where governments now minimise past mistakes by try to mixing public and private housing. Though the actual remaining public housing estates and towers are worse than they were.

conrad
conrad
10 years ago

“Which they and where are these blocks going up? Just curious”

The one that I noticed was next to Moorabbin station in Vic — This is in my electorate so I already knew about it, but I had never actually seen it since it is at the opposite end to me and I never had any reason to go down there. It’s still in construction, but it already looks like a big concrete block, and to make matters worse, it’s basically on a major road.

Paul Bamford
Paul Bamford
10 years ago

conrad,

Are you sure that what you saw in construction was public housing? I’m a Melburnian too. Although I don’t livew in Moorabbin, I do have a Melways and access to Google Maps and it seems to me that with all the construction that’s already around Moorabbin Station, there just isn’t room for a 1950’s style Housing Commission people battery.

Also, while a lot of policies of the previous ALP State Government have been rolled back by the Baillieu government, getting a major construction project – such as building a people battery – up and running involves a considerable lead time. Rolling the policy on grazing in Alpine National Parks was an easy one – all the Libs and Nats had to do was strike out some legislation and regulations. Rolling public housing policy back to the Bolte era, so that a people battery could go up next to your local railway station wouldn’t be so simple. Besides the lead time involved in project planning, there’d be a shitload of political obstacles to get over. Starting with the inevitable “we don’t want these riff-raff in our community lowering our property values” protests and building from there.

Mel
Mel
10 years ago

I think all discussions about welfare should be prefaced by an acknowledgment that our economy, and that of like countries, only rarely approach full employment. As such, it doesn’t necessarily impact on our economic performance or tax burden if there is a residual rump of “welfare bludgers”.

Let me give a simplified example, if an economy averages ten people in work, three people out of work and only one job vacancy at any one time, it really doesn’t matter if one or two of the folk out of work are not seriously interested in finding a job.

Indeed, given that “too many people chasing too few jobs (1)” is the norm, the willingness of a certain number of people to be “bought out” of the active job seeker market by a welfare pittance could be construed as a blessing. Surely it is a better outcome for the status quo than a restless army of riotous reserve labour.

(1) The graph in this link demonstrates the rarity of full employment during the 20th century in Australia- http://www.melbourneinstitute.com/wp/wp97n24.pdf

conrad
conrad
10 years ago

“Are you sure that what you saw in construction was public housing?”

It could be a developer building something in a building in a place that’s almost the same as where the public housing is supposed to go (I was just getting my car serviced, so I wasn’t exactly looking for it). It isn’t exactly a 50s style block, but it isn’t exactly wonderful.

Peter Whiteford
Peter Whiteford
10 years ago

“In February 2009, the Commonwealth announced the provision of additional funding for social housing under the Nation Building – Economic Stimulus Plan.

Funding of $5.238 billion was allocated to the Social Housing Initiative over three and a half years from 2008-09 to 2011-12 for the construction of new social housing (in two stages), and a further $400 million over two years for repairs and maintenance to existing social housing dwellings. ”

I think that the increase in the stock of social housing in the last couple of years was greater than in the previous decade.

Julie Thomas
Julie Thomas
10 years ago

This is a great discussion. Sorry to come in so late.

It seems to me that the original question assumes that people receiving income support know what is in their own self-interest. But surely a lot of the long term unemployed never did know what is good for them.

The capacity to work toward one’s self-interest is predicated on an understanding that one has a choice about the future. But some people because of inherited brain chemistry and vulnerabilities, the wider social and cultural environment, the family environment and culture in which they were raised and of course the effects of luck or chance, are unable to see that they do have a choice.

Andrew Norton
10 years ago

There are supposed to be mixed public-private developments on old housing commission land. There has been one promised just near me for a long time. Hopefully one day it will go from being a picture on a sign to reality.

FDB
FDB
10 years ago

“But some people because of inherited brain chemistry and vulnerabilities, the wider social and cultural environment, the family environment and culture in which they were raised and of course the effects of luck or chance, are unable to see that they do have a choice.”

Julie, isn’t it possible that people born into mental illness, systemic substance abuse, violence and crime do not have much of a ‘choice’? What does choice mean in the context of such a person? They certainly can’t ‘choose’ to give themselves all the opportunities for an easy life I was given.

Seems like you’re saying people can choose to completely reinvent themselves and transcend their real circumstances, if only they could ‘see’ how much choice they’ve got. That’s just la-la land.

Peter Whiteford
Peter Whiteford
10 years ago

Don

There are many people much more expert about housing policy than me.

The Henry review recommended that there should be a convergence of assistance for people in public housing and people receiving rent assistance – where convergence appeared to involve an increase for private renters but a reduction in assistance for public renters. But it was one of those recommendations of the Review that was not spelled out in detail – at least publicly – so it is difficult to assess the impact of their proposals. I think, however, that this has been a longstanding argument with the Commonwealth Government arguing this way and State Governments being very wary.

The most common argument against increasing rent assistance is that the money allows private landlords to increase their rents. Having said this, landlords appear to have increased rents despite rent assistance only being indexed to the CPI.

I am inclined to think that a real increase in the rates of rent assistance and the thresholds so that those with higher housing costs rather than those with low costs are targeted for help would be worth thinking about. Also, I think that an expansion of community housing (run by not for profit organisations) would be part of a response. but as I said there are lots of people around who know more about this than me.

Andrew

details of the social housing initiative can be found at
http://www.fahcsia.gov.au/sa/housing/progserv/social_housing/Pages/default.aspx

Julie Thomas
Julie Thomas
10 years ago

FDB

Sure the choices for some are very limited – that is a problem.

My point was supposed to be that people on income support may have no idea that they can choose to actively pursue their own self-interest; they have something like ‘learned helplessness’.

I was attempting to argue against the idea that welfare creates a lack of motivation and failure to act in ones self-interest.

But I was also wondering about the whole idea of ‘self-interest’. It seems to me that the assumption that some people have – that all good and decent people can and will act in their own self-interest – is flawed and bears no relation to the reality of human behaviour.

Paul Bamford
Paul Bamford
10 years ago

My point was supposed to be that people on income support may have no idea that they can choose to actively pursue their own self-interest; they have something like ‘learned helplessness’.

I was attempting to argue against the idea that welfare creates a lack of motivation and failure to act in ones self-interest.

Way to contradict yourself – one of the best ways to acquire a bad case of learned helplessness is to fallout of the workforce into the clutches of Centrelink.

Just what is it that you’re trying to say in your comment at 45? That people who end up on welfare for long periods are just genetically and psychologically unfit for anything else? It sure as hell looks like it.