Fixing the Social Welfare System Will Require Creativity

This post was written by Emily Volk, a participant in the 2017 Values & Capitalism Summer Honors Program and a student at Baylor University.

Nothing is ever black and white. On a many different types of issues today, society is learning that most things cannot be boiled down to one of two options. So why are we seem to be doing that with our social safety net systems?

In today’s discussions of welfare, supporting work, and taking care of the less fortunate, two systems are primarily talked about. The first is the Earned Income Tax Credit (EITC) which is what America has today. Based on the amount of income and number of dependents a person has, an individual with a relatively low income is provided aid at varying levels until they reach an earning cap at which they are no longer eligible for benefits. The proposed alternative is the Universal Basic Income (UBI). In trying to solve the problems currently experienced under the EITC, the UBI seeks to get rid of all government welfare systems and instead replace them with a set amount of money given to every individual each year to offset their costs of living and allow even those without jobs to get on their feet and begin the job search. Unfortunately for the UBI, while it solves the EITC issue of over-reliance on government programs such as SNAP and housing assistance, while decreasing the likelihood of fraud, it does not bring forth an all-encompassing fix to the issue of poverty and social welfare spending.

The problem that we are currently seeing in this two-idea competition for solving the welfare problem is that neither one actually fully does what it sets out to do. In other words, neither one actually solves the problem of poverty. While proponents of the EITC tout the fact that the current system has worked so far, they fail to mention that the current system is likely unsustainable as the population grows, and that it can also have negative effects on the national workforce as people learn to live within the welfare system itself. Of course, the program has done wonders for those individuals that have used it to get back on their feet after a job loss or unforeseen complication, but it can also be used to cover up the problem of the residual poverty in America. Even with the EITC, people can continue to be supported by the welfare system, and never a real chance to escape poverty.

Alternatively, champions of the UBI would be quick to point out ways that their system could fix these issues. By giving each individual a certain amount of money each year, all other welfare programs could be eliminated and any uncertainties about the necessary amount of yearly spending could be taken out of the equation. Additionally, the system is praised for its promotion of social and individual responsibility by forcing those who would otherwise wholly rely on welfare to find additional income or face the consequences, while also making those who may not usually concern themselves with the poor far more aware of the poverty around them. However, the system is not all positive. One major issue is that of funding as, in order to provide each person with an amount that can feasibly offset living expenses, the amount needed may well exceed the amount that can be transferred from the discontinued welfare programs. If this is the case a rise in taxes or inflation could be close at hand. The idea of shifted social responsibility is also problematic as the UBI system takes a rather optimistic stance on man’s willingness to help a fellow man in need. Let it be clear that I have full faith that individuals would be willing to assist those around them to a certain degree, but if we transitioned from our current system to the UBI, there would still be a large number of people that would need additional assistance and it is likely that the amount of help provided by the rest of society would not be enough to offset that disparity, leading to worse poverty.

Herein lies my own personal confusion. In a country that prides itself on problem solving and choice, a country in which people crave access to hundreds of different models of cell phones even though they all do the same thing, why are we limiting ourselves to two models of welfare? Why are there more options for breakfast cereal than there are for helping the less fortunate and strengthening the economy? It seems to me that the country’s economic future demands more thought and options than my morning bowl of cheerios.

In response to this question, the popular thought is to begin to combine the two ideas. Perhaps we could scale back our welfare programs and implement a small yearly stipend that is given to every American. While this may or may not be a better system than the one we already have, I believe we need to think outside the box we have created for ourselves. Maybe the answer to the problems of welfare and poverty lies beyond either the EITC or the UBI. Perhaps it lies in increased technical training or new types of mandatory education. Maybe it consists of new redistributive taxes or no taxes at all. I’m not saying that any of these options is the correct answer, but I am asserting that whatever the right fix is, we won’t find it by continuously mulling over the same programs and hoping that something new magically appears.

Instead, it is time for America to get creative again and begin to explore alternative ways to solve the problems with the safety net system that we have muddled through for some time. We live in an era where we can make milk out of every nut imaginable! Surely we can use that same ingenuity to find a new way to structure welfare and help our fellow humans escape the confines of poverty.

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