With all the debate over how to help the poor climb out of poverty and ensure that they have equal opportunities to thrive, it’s important to make sure that our welfare programs actually work. At the core of that debate is this question: To increase their economic opportunities, do the poor simply need more money from government?
The answer to that question is “no,” according to Scott Winship, a senior fellow at the Manhattan Institute for Policy Research (and my former colleague).
“There’s a dominant perspective that says that the reason we don’t have as much opportunity, as much mobility as we do today is because people at the bottom don’t have enough money, or the programs, the institutions that we have to help them, are not funded enough,” Winship said Thursday. “I would argue that because this is the dominant perspective, this is actually why we’ve not made much progress in increasing opportunity in the United States.”
Winship pointed out that federal spending per person on the poor was six times higher in 2008 than in 1968, in real terms. Since the 1960s, poverty has been reduced, but economic mobility has stalled, implying that opportunity is no greater or worse today than it was before all that federal spending. Winship said:
“The chronically poor … do have background characteristics that are both related to their poverty. Therefore, if we address the poverty we’re not necessarily addressing the fundamental issues that are barriers for their kids’ mobility. … Just giving poor people more money isn’t necessarily addressing some of these core issues.”
Winship was speaking at a Thursday event about economic opportunity and mobility co-hosted by the Manhattan Institute and the Center on Budget and Policy Priorities. Jared Bernstein, formerly the chief economist and economic adviser to Vice President Joe Biden, also spoke on the panel.
While the two agreed on the common goal of increasing economic mobility, Winship and Bernstein strongly disagreed over the causes of immobility and how to fix them.
“[Winship] puts too much weight on individual behavior, aspirations, and personal qualities and too little on labor market conditions, the absence of strong labor demand, long-term wage trends — themselves related to increased inequality,” Bernstein said. “This disagreement is as old as poverty itself.”
One of Winship’s preferred methods of increasing opportunity is to block-grant means-tested welfare programs to state governments, a reform similar to what was proposed in 2014 by then-House Budget Committee Chairman Paul Ryan, R-Wis. Winship says opponents of block-grants fail to recognize how successful the block-grant welfare reforms of the 1990s were. “Poverty among kids and among single parents declined after we did that,” Winship said.
“Scott’s proposal to block-grant the safety net … would fail to tap the mobility-enhancing elasticities,” Bernstein said. “Rep. Paul Ryan’s idea to try to block-grant as just a pilot in a few states was bad enough, Scott’s idea to go national with safety net block grants is downright scary to me.”
Despite their major differences, Winship and Bernstein agreed on a few things. They both agreed the earned income tax credit should be expanded, although there was disagreement about exactly how to do so. They also agreed that the federal safety net had decreased poverty, although Winship disagrees with Bernstein’s assertion that it has improved opportunity.
The two also agreed on the need for criminal justice reform. “The issue of what we do with ex-felons in particular is incredibly important,” Winship said. He went on to say employers should be disallowed from checking criminal backgrounds until late in the interview process, rather than putting a box on job applications that asks “Have you ever been convicted of a crime?”
