Monday, July 28, 2014

No Surprise here: Big Business Loves Desperate Workers

We don’t think enough about the economic functions of social welfare policy, or about the relationship between the safety net and labor markets, and this hinders our ability to make sense of why some people fight so hard against programs that aid poor and low-income people: We mistake them for anti-welfare ideologues, and dismiss them as cruel or ignorant, but there’s an economic logic to their activism, one that’s revealed if we look at the relationship between welfare and work from both the employee’s and the employer’s perspective. Let me explain.
Imagine that we have two workers, worker K and worker O, each with two young children.
Worker K is laid off when the company “downsizes.” K is nervous, but has some savings, is eligible for Unemployment Insurance benefits, Medicaid, food stamps (SNAP) and TANF, has access to free local day care and lives in a Section 8 apartment, with their monthly rent tied to their income.
While K is not living as well as when working, if K were eligible for all of these programs, which would be highly unusual, K will...

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