Should We Just Have "Assistance"?
One of the difficult balances to achieve in the area of politics dealing with “social services”, and with bringing a proper Catholic understanding to how we as Christians should strive to shape such policies, is knowing how we should balance efficiency with proper concern for human dignity and human pride. I see this as being particularly the case when it comes to some of the large scale assistance programs which form part of our “social safety net” in the United States. Many of these are, it seems to me, essentially welfare of “assistance programs”, yet are cloaked in the form of all-encompassing “savings” or “insurance” programs.
For example, the purpose of Social Security was clearly to assure that the aged are not relegated to poverty once they are no longer able to work. In the past, this was done through private savings, the help of one’s children, and the help of one’s community. However, these mechanisms often fell through, and so people often found themselves in poverty in their old age. Thus was created the Social Security system, which collected money via a payroll tax and “saved” it to fund retirement payouts after age 65. Medicare, which is designed to assure that the elderly can afford medicare care is much the same.
Unemployment “insurance” is funded via a system where employers pay an extra tax/fee which is a percentage of their total payroll, with modifiers which reflect how many of their employees have ever collected unemployment. Because unemployment is theoretically “insurance” rather than a hand out, you don’t qualify if you were a contractor, or were employed for less than a year at your last job, or we terminated “with cause”, etc. This, combined with the fact employers have to pay higher rates if there are claims against them, strongly incents small companies to falsely claim that someone was fired rather than laid off — a charge it’s hard for the ex-employee to fight, and which denies them unemployment benefits. (I’ve known a couple people who have been victims of this gambit.)
In each case, the fiction of making this something other than a social service for those who need it increases expense and/or reduces help to those in need. Social Security and Medicare pay out benefits even to people who are already very well off on their own. Structuring unemployment benefits as “insurance” blocks some of the unemployed from coverage (and often those who were working part time or for less than a year will be the most economically precarious) and encourages employers to falsify reasons for termination.
I think there are two reasons we have the non-welfare structure for these programs:
1) At the time they were created, there was a stigma associated with “assistance”.
2) People imagined that having everyone receive benefits, whether they needed them or not, would create a sense of egalitarianism and make the programs easier to sell to the voters.
Number two I’m basically going to ignore, because I don’t think that we should necessarily shrink from helping those in need while recognizing that we ourselves do not need similar assistance. If there is an egalitarianism to a millionaire and a retired steel worker both collecting their $2000/mo in Social Security, I think it is frankly a rather false egalitarianism.
Number one, however, I think deserves a certain amount of thought. We have an innate human desire to support ourselves and our families. The dignity of work is a value built deep into our psyches, and we are unwise to knowingly break down that desire of people to support themselves. Thus, I think there is more than pride at work here. Even if, in all reality, current tax payers are simply having their payroll taxes used to pay for the currently retired, the idea that one is “saving” via Social Security does give more a sense of supporting oneself than simply being given a check every month because one is old and has few savings. There is, I think, a worth to the fiction that Social Security and Medicare are paid for by the contributions that one made oneself while working — even if it is just that: a fiction.
But is that fiction worth the inefficiency that comes with not means testing these retirement programs? And is the fiction that unemployment is actually “insurance” that our employers buy for us really worth denying benefits to many of those who would benefit most from them?
I’m not sure. There are those conservatives and libertarians who argue that a free society is best served by a small, efficient and means-tested welfare state. And there are those who argue that anything that involves the state giving money to people necessarily breaks down the bonds of community and the self respect that comes from work. Thoughts?