Work, Risk and Reward

The Abode of McThagThe correlation we have is that the massive spending engendered by LBJ and continued for the past 53 years have done nothing to reduce the poverty rate and that millions more people are living in poverty than were before we began this massive expenditure.

I'll throw my own causitive relationship in here. The rate was coming down from 1959 because the economy was expanding. The Economic Opportunity Act removed literally millions of able-bodied and capable workers from the labor pool and had a mainly deleterious effect on poverty because it established a floor to compare entry level work against.

Why get a job that doesn't pay substantially more than doing nothing? Especially when the money to not work was substantially reduced in response to any, reported, legitimate income.

I'll take this one step farther. If you can't improve your position in life by working a legitimate job for fear of reducing your welfare benefits, but you still want to improve your position in life, what career paths are open to you? Illegitimate ones. That means crime, whether theft, smuggling contraband (ie, drugs), or low-skilled under-the-table labor that isn't reported to tax agencies.

Sure, working in the criminal sector bears a substantial risk of being caught, convicted, and put in prison. But it also bears a substantial potential upside: successful criminals star in Hollywood movies or have careers as rap artists or get away with successful complex heists that result in billions of dollars in loot. No, not really, but that's what Hollywood sells as the upside to a life of crime. I happened to be browsing Netflix last night, and there must have been two or three separate file projects about a widow whose husband ran a drug business and how she had to take it over when he died. Two or three different ones just about that one scenario. Quite a few others about the more broadly viewed drug trade, even more about various heist movies, and so on.

Sure, on one level it's just entertainment. On another, what do the options and incentives look like for a man or woman on welfare considering what they can do to improve their lives? Work hard for years, keep their nose clean, go back to school to learn a skill (and what if their experience of the school system tells them they don't learn very well?), get a job (possibly hampered by criminal history), pay taxes... or make a few quick criminal scores and relax until you need to make the next few quick criminal scores?

The incentive structure is all screwed up.

This entry was published Thu Apr 27 09:53:04 CDT 2017 by TriggerFinger and last updated 2017-04-27 09:53:04.0. [Tweet]

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