Bryan Caplan  

Why I Don't Hate Why Americans Hate Welfare

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I suspect a lot of my friends would hate Martin Gilens' Why Americans Hate Welfare. Gilens takes a stab at the question: Why doesn't the United States have a European-style welfare state? And his answer, to put it crudely, is racism. But unlike most people who feel this way, he has some data to back up his allegation. A few highlights:

1. Agreement with the view that "blacks are lazy" is a strong predictor of support for cutting welfare. About 35% of people who strongly believe that blacks are very hard-working want to cut welfare; about 65% who strongly believe the opposite want to cut welfare.

2. People who over-estimate the percentage of welfare recipients who are black are substantially more opposed to welfare. 64% of people who (wrongly) believe that most welfare recipients are black think that most people on welfare do not "really need it"; 50% of people who (correctly) believe that most welfare recipients are not black think the same.

3. States where a higher percentage of the poor are black spend less on welfare, controlling for income and education. One study estimated that if all the poor were white, AFDC benefits would be $2000 more per year than if all the poor were black.

I find these results fairly plausible. But as a firm believer in the view that no one deserves welfare, I am unperturbed. (Unlike Arnold Kling, I am no Bleeding-Heart Libertarian). Poor Americans of all races ought to emulate immigrants - take low-skilled jobs and try to work their way up. Instead of comparing themselves to native-born Americans who earn more than they do, the American poor should compare themselves to unskilled workers who weren't born here. At least the American poor don't have to learn a new language and leave their homes in order to move up in the world.

Incidentally, I strongly suspect that Gilens' results would generalize to immigrants. If Americans think immigrants get a lot of the benefits of welfare, they won't want to spend as much. As a defender of immigration and an opponent of welfare, I call that a happy coincidence.


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COMMENTS (19 to date)
Ronnie Horesh writes:

Seems to be an inconsistency in your reasoning. Many would regard immigration as at least as much an imposition as taking away tax dollars for spending on welfare.

Al T writes:

I'm not sure how he demonstrates that racism is the cause. Those statistical correlations are interesting but in the end they are just that, no more no less, correlation does not equal causality.

How do we know that Europe is less (or more) racist than America?

Boonton writes:

The analysis makes sense, if you live in a hetrogenuous culture then its easy to project welfare as belonging to 'those people who aren't like me'. It's interesting that very few people see either social security, medicare, or farm subsidies as welfare. It's even hard to get people upset by corporate welfare despite the fact that it's probably more expensive than welfare for the poor AND there's no one outside of some protectionists who really believe corporations deserve welfare.

Randy writes:

Interesting. It just doesn't seem "right" to accuse the needy of being in any way responsible for their own problems - and yet rational debate on the subject of welfare is impossible without doing so.

Lancelot Finn writes:

I can answer Ronnie Horesh. Immigration is not an imposition in at all the same sense as tax dollars for welfare, because immigrants (as a rule) come to work, and don't ask for handouts from the state. It is immigration restrictions that are an imposition, a state intervention that deprives us of beneficent commercial and other interactions with people born elsewhere.

Great essay, and I am pretty much in agreement. I wonder if I could interest people in a recent post of mine about immigration. I offer a proposal (briefly in the original post, in more detail in the comments) to permit unlimited immigration but to tax it. An immigrant labor surtax will be channeled to savings accounts for all American-born children, enabling them to stay afloat in the more competitive labor market that immigration will cause. I'd love to find out what you think of it.

Randy writes:

Lancelot,

I too am in favor of unlimited immigration, but I think the end result will be simply a bigger economy, and a bigger labor market. The United States is hardly full up (if you've ever driven across it, you know what I mean). The "more competitive labor market" you describe is a temporary dislocation.

The bottom line on immigration is that there is no way to stop it short of truly Draconian measures. We don't have the guts. So we might as well learn to live with it.

Ronnie Horesh writes:
I can answer Ronnie Horesh. Immigration is not an imposition in at all the same sense as tax dollars for welfare, because immigrants (as a rule) come to work, and don't ask for handouts from the state. It is immigration restrictions that are an imposition, a state intervention that deprives us of beneficent commercial and other interactions with people born elsewhere.
Lancelot, I am not talking about an economic imposition. Many are quite upset when the ethnicity of their neighbourhoods changes. Many migrants too would probably prefer to stay at home and are driven to the west by our illiberal trading regime, which makes it impossible for their countries to prosper. Now that is an economic imposition.
Ann writes:

"Many migrants too would probably prefer to stay at home and are driven to the west by our illiberal trading regime, which makes it impossible for their countries to prosper."

Do you really think that our "illiberal trading regime" is the number one reason why countries aren't prospering? If countries would adopt international best practices in the areas of government, regulations, financial markets, economic systems, political systems, etc., they would prosper. Trade helps, but much of that benefit is because it forces countries to compete.

Countries know in general what they need to do - strengthen the rule of law, get rid of corruption, improve education, health and infrastucture, and give people a chance to get ahead at home. But they don't want to reform because vested interests are benefiting from the current system even though it hurts the country overall.

If developing country governments would simply adopt modern technology in terms of legal, political, financial and economic systems as quickly as they adopted electricity, automobiles, cell phones or personal computers, then we could allow unlimited immigration without being flooded.

David Thomson writes:

I really could care less if a lot of people dislike welfare due to racism. Welfare benefits tend to destroy the self respect and desire to succeed of those on the receiving end. That’s enough for me.

Adolph Hitler liked dogs and intensely despised smoking. Shucks, are we suppose to start kicking Rover and smoke three packs of cigarettes daily to prove that we are not Nazis?

Mr. Econotarian writes:

I think we need to consider what is welfare.

The European welfare state goes far beyond simple income redistribution, and on to labyrinthine labor regulations and socialized medicine.

I wonder, if Europe stuck to income redistribution and instead liberalized labor, medicine, etc., would they end up with the same GDP growth (3%) the US has today.

Redistribution, in itself, doesn't cause any loss of societal wealth, it is only in the manner it is achieved (deadweight loss due to labor taxes, etc.)

Lancelot Finn writes:

Ronnie has a point that some people resent it when the ethnic composition of neighborhoods change. This can sometimes be a very sad phenomenon, leaving people to feel like strangers in neighborhoods where they have lived for decades. But other people (like me) find it exciting and enjoyable. Who's side should we be on? To call welfare an imposition is straightforward: I am being taxed to pay for it. With ethnic shifts in neighborhoods, we have a redistribution of utility among individuals because of the externality effects of living in close proximity to foreign-born people-- a much less straightforward case.

And I second Ann in thinking that scapegoating our "illiberal trading regime" for slow growth in poor countries is implausible, although certainly I would like to change some things about it, e.g. scrap agricultural subsidies.

While I'm glad that Randy agrees with me about open borders, and I also agree that the effect would be to grow the economy and the labor market, I don't think it's realistic to deny that many American workers would suffer declining wages because of it. It's impossible to know how many people would come to the US if we opened the borders, but I expect the number would be huge. If the population of the US rose by 100 million in 10 years after such legislation, I would not be surprised. And I don't think the "dislocation" would be "temporary." As long as a large gap persists between wages in the US and wages in the rest of the world, open borders will create strong downward pressure on the wages paid to unskilled labor in the US as foreigners come in to take the jobs. That's why I think open borders should be accompanied by policies that provide American-born workers with financial and/or human capital so that they can stay afloat in the transformed economy.

By the way, a friend of mine mentioned that an anti-immigration demonstration may take place in April in Washington, DC, and if so, he and I would like to organize a counter-protest. Would anyone like to participate? E-mail me if you're interested.

Ann writes:

I, too, would love to see agriculture subsidies drastically reduced. I wasn't speaking in favor of trade restrictions, just questioning whether we can blame the problems of poor countries on them. And isn't the US better than most wealthy countries in terms of being open to trade?

Lawrance George Lux writes:

Europe was the land of the Jewish Holocaust, a history pogroms, and Debtor Prisons. They do well at ethnic cleansing as well. The actual American history on adhoc hanging of Blacks is less in number than the average daily count of hangings in Nazi-occupied Poland. But some of Our more Conservative libertarians probably think the Holocaust is a fiction.

There is also the fact that immigration only holds back Wage demands by about two years. Modeling the statistical Age of Welfare recipients indicate We are importing future Welfare Costs. Most here would rant against the concept of a Living Wage, but is the Economy in Reverse, or going forward. lgl

Empowerqueen writes:

Lancelot & Ronnie,
Out here in reality where we can testify not to theory but to fact. The imigrant that is here in our country legal is not a welfare case however the illegal imigrant is definately here for anything they can get for free. This is why we have a heavy concentration of the imigrant population in the liberal states that have instituted the public policies they feed upon. As for a need to make severe changes to the system I do declare there is a better way. A National Housing Lottery!
With every one million in voluntary tax collected five million in economic growth is created. Not only here in America but in Mexico, Africa, Israel, Brazil, Russia etc.. A world without the need for welfare. It is a self sustaining economic engine that is greater than the homestead act!
Grace be with you all
KLAW

Ronnie Horesh writes:

Granted, the west's trade barriers may not be that significant - to us; but they are highest for agriculture, textiles, clothing and footwear, precisely those goods most likely to help third-world countries onto the first rung of development. We put up barriers to their exports, but encourage their best-qualified, brightest and most ambitious people to leave their families and cultures. Of course good governance is important; but what is the west's record on that? Forget history: look at what we do today: we prop up their corrupt thugs (the US and France are as bad as each other), and sell them weapons. If we really cared we wouldn't do either.

jim linnane writes:

AFDC is history now. Its replacement is supposed to be temporary. When people compare European 'welfare' and US 'welfare' are they comparing the same things? Welfare in the US is commonly understood as AFDC-style cash payments to families with children to support. Europe, as i understand it, has generous unemployment benefits. In Europe, as I understand it, one's unemployment benefit is pretty close to one's former wages, and the time limit, if there is one, is years. And Europeans now certainly are complaining about foreigners, not because they are ambitious immigrants taking jobs, but because they are on 'welfare' and of a different race or religion. AFDC started in the 1930s to help families of fathers who died or deserted, something that was happening in every state at the time. After WWII mechanization of agriculture drove many African Americans northward. The return of soldiers from the war, racism, and resentment of 'immigrants' from the South made it very difficult for African Americans to find employment in their new homes. A 'culture' of welfare started because, in part, families with live-in fathers were not eligible and working for wages meant loss of benefits. Bottom line is that it is a good reason to make welfare a temporary help for poor people who should be working if they can.

Ann writes:

"Of course good governance is important; but what is the west's record on that?"

Relatively good, and improving. Developing countries only have to follow, they don't have to lead, and simply adopting current best practices would make a huge difference for them.


"Forget history: look at what we do today: we prop up their corrupt thugs (the US and France are as bad as each other), and sell them weapons. If we really cared we wouldn't do either."

I agree totally. Bush's State of the Union indicates that he's trying to change this approach. The "realists" (i.e. defeatists) say that we can't really help anyone else and should just focus on our own short term interests without ever thinking about the future. But long term, we're all safer if developing countries get their acts together, so that all people have basic human rights and a chance to earn a good living.

And I would love to see our agriculture subsidies drastically reduced. I especially like the way Bush is doing it - putting a strict overall cap, so that no one gets more than $1 million a year, or even $360,000 a year, in farm welfare. I'm writing to my senators and congressman to support it!

scottyn writes:

If Americans think immigrants get a lot of the benefits of welfare, they won't want to spend as much.

I agree with you and the the study. But each additional immigrant (on average) raises the votes for socialism in the long term. If the average Americans wants to cut back on welfare because it helps those un-like him, then wont the average immigrant want more welfare because it helps those like him (racially, ethnically... etc)? The two effects are opposing. Who's effect will win out in the end? California is one case study. Will it ever be anything more than a democrat lock in (Arnold is a special case that California Republicans have only 1 of). I believe hispanic immigration is why California is a democrat lock-in today.
California has long passed the point of diminishing returns from your effect, and america will soon too.
In summary: Immigration moves the nation to the right only as long as there are enough "natives" to overwhelm the effect of immigrants voting disproportionately for the left.

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