A Novel Welfare Reform Idea

The recent Sharon Jasper racist conniption fit, immortalized by web video, combined with her Times-Picayune complaints about how poorly the taxpayers have treated her has been the talk of N’awlins. This message board comment was, I think, the most interesting response:

This New Orleans leech is tired of “living in a slum” @ TigerDroppings.com
How about, we combine unemployment benefits with various welfare programs while simultaneously abolishing minimum wage?

Perhaps this could work, by not having these checks sent to individuals, but would only be collected through employers. The government would pay a share of the employee’s salary, scaled according to the business’s paid wage. The more a business pays, the lower percentage the government pays.

Such a system would mean businesses can reap the benefits of cheap labor for jobs they otherwise would not bother to create, have an incentive to hire legal US workers, and would be part of a scaled wage system for welfare workers that encourages productivity and performance. This is the holy grail of good government – it’s the friggin triple crown!

There are obviously many jobs that Americans won’t do for low wages. For example, Mom & Pop Grocery store pays an illegal alien to sweep floors for $5 an hour. If they won’t hire an American for $5.85, they certainly won’t do it for $7.25. But the above proposal would allow them to hire someone to do it at a cost to their business of only $3.62 an hour. A modified welfare/unemployment program would chip in the other $3.63 per hour.

So Mom & Pop could still hire an illegal alien, but why when a US citizen will be paid more money for the same job at half the cost to Mom&Pop?

As the wage rate increases, the business share to government share ratio can be scaled toward a higher percentage of business pay as it gradually overtakes the government share until full business employment (100% of wage paid by business) is reached. For example, when an employee is earning $10 an hour, the business is paying $8 of it and the government is paying $2.

So the business providing the supervision still determines the wage based on the employee’s value as they do now. The business continues to do what they do best, the government does nothing but write a matching check that gets smaller as workers become more skilled and more valuable, while the worker starts learning about relative value and the rewards of doing incrementally more than they are currently doing.

Add to this an elimination of automatic citizenship for children born from non US citizens, and we’ve taken away some of the most significant incentives which encourage illegal immigration – without raising the cost of labor to businesses.

I think the average welfare recipient received about $11,000 a year (before the min wage rate was increased) in benefits for not working. That comes out to about $5.28 an hour for 40 hours every week. So the above proposal is even less expensive to the taxpayer.

Would such a proposal be better than the system now in place? Or worse? What about long term effects?

Now, miss Sharon would make a terrible Greeter at Walmart, but I’ll bet she could sweep on aisle 9. If/when Ms. Sharon proves to Walmart that she isn’t even worth the cost of a dollar per hour, I’ll bet Ms. Sharon’s church (Holy Name of Victorius Jesus Antioch Greater Mount Olive Gethsemane Lord and Savior Zion of Unified Calvary Ministries) would gladly serve themselves and their community by offering her a paid position to help them serve her community. With a large portion of their payroll being members of the congregation, the competition amongst them may start providing lessons on relative value based on pleasing the boss man.

That’s not a half-bad idea, really. Of course, the potential for abuse is HUGE. I’m not sure how it could be avoided, absent expensive and excessive oversight by the government into small business. It also has the potential to make the welfare class as vulnerable to unscrupulous employers as illegal aliens. Then there is the flip side of that – a welfare recipient could make false complaints against an employer who is already too vulnerable to government interference. But it still may be an idea worth developing.

I think we do owe Ms. Jasper a debt of gratitude. Thanks to her wonderful performance as an entitlement spokesmodel, a lot of people are talking about welfare and public housing reform. While the 1996 welfare reforms were good*, they have not been made permanent law, and they could be improved upon. Reminders like this of the results of allowing the poor to be warehoused, breeding a culture of dependence and hate, move us closer to reforms that truly help people for the long term.

*A post on those changes is upcoming.