Alternative to government welfare

The institutionalists are essentially providing an explanation for the failure of the market to eliminate inefficient discrimination. Simply put, its the nature of social relationships which stops the profit motive from working as it should.

But you have to go further than that. Becker refers to the prejudice of the individual, but- to maintain discrimination- there also has to be market power. If not, then the non-prejudiced will necessarily make more profit and (eventually) drive the discriminators out of the market

But there isn't a homogeneous subconscious prejudice! In terms of the theory, you'd need that homogeneity deriving a specific form of 'statistical discrimination' (with the inefficient discrimination reflecting the distinction between objectivity and subjectivity). No such homogeneity exists and therefore we would be back to the non-discriminator necessarily making more profit as they can use resources more efficiently

 

Yes, sometimes legislation to address a known problem backfires. As I noted though often those that oppose it are the very people that were the reason behind the problem that made the legislation necessary. Of course sometime the legislation is just bad legislation to begin with.

Anyone of any race or of either gender can file a lawsuit based upon discrimination but they require compelling evidence that discrimination took place. Fewer than 1% of cases of discrimination meet the criteria to even file a lawsuit and even then many fail to establish that discrimination actually occurred.

Over 70% of all private employment is in enterprises with less than 50 employees and they don't typically have an HR department. It is also literally impossible to establish statistical evidence of discrimination by an enterprise with less than 50 employees as the sample size isn't large enough. As noted though in the small minority of enterprises that have an HR department there is a grave concern related to discrimination lawsuits so the policies are establishes so that those businesses don't provide a "smoking gun" that establishes that discrimination occurs. They will not, for example, send a memo that states, "Hire Joe because he's white" because that would be a smoking gun in a lawsuit.

They're more concerned with the potential for lawsuits than they are with the discrimination itself.

Small enterprise is virtually immune to discrimination lawsuits unless they actually document that their decisions are based upon racial or gender considerations alone. The owner of a small company could literally come out and tell a black person they're not being hired because they're black and as long as this is in private without a witness there isn't grounds for a lawsuit.

Jackie Robinson was not only one of the greatest players ever in baseball he was also a unique person in that he was willing to accept the abuse of racists when he entered the major leagues. Hiring someone that is so superior to virtually everyone else did not represent "equality" and even today there remains discrimination in sports. How long was it until a black quarterback started in the NFL when there were unquestionably very qualified black quarterbacks. Even today the black quarterback is the exceptional player that typically has to be better than their white counterparts.

Perhaps, over time, the market will correct inequities but how many hundreds of years must we wait for that to happen and what do we do in the meantime? Until the "market" corrects the inequalities we need to mitigate the effects of the inequalities.

I don't like Affirmative Action, for example, and I merely point out that to end it all we need to do is eliminate discrimination that drives the need for Affirmative Action to mitigate the effects of discrimination.

I don't like welfare programs so I point out that all we need to do is reduce or eliminate the poverty that drives the need to mitigate the effects of poverty.

This issue is really quite simple. Address the problem. Welfare assistance doesn't do anything to eliminate poverty and is limited to mitigating the effects of the poverty. Address the poverty and the need to mitigate its effects disappear.

 

Agreed. Since the problem is often government, heather through bad schools, unsafe neighborhoods, or back firing legislation. Social security is the worst one of them all. Especially against black Americans.

I put my reply in your quote. Too hard going back and forth on the phone. Please excuse the numerous typos and the mess auto correct made of them.

 

This becomes circular logic in condemning government. Government cannot "fix" a problem of generational discrimination against minorities based upon invidious prejudice that results in denial of equality in opportunity. Denial of equality of opportunity results in a loss of motivation to succeed through traditional means such as education and employment. If the students aren't motivated then any school becomes a "bad" school. If traditional success is denied then individuals will seek alternatives where they can succeed such as the black market and black markets creates crime resulting in dangerous neighborhoods as gangs form to protect their black market turf. Because the traditional means of success are denied then it lead to a breakdown in the social structure of "two parent" households as the "man" that is the traditional supporter of the family cannot be expected to fulfill that role when they can't get a job.

Then we call upon government to fix the problem and condemn it when it can't. At best government can attempt to mitigate the effects of the problem but mitigation is a poor substitute for eliminating the problem and many of those efforts will miss the mark.

This whole issue becomes even more distorted because those creating the problem refuse to accept responsibility for their actions and do everything possible to misdirect others with propaganda based upon half-truths and false conclusions to believe that the problem is the people that are being subjected to the prejudice and discrimination. For example they blame the blacks for the problem of "black crime" instead of blaming the invidious discrimination and denial of opportunity that leads to criminal activities. If the discrimination didn't exist then there wouldn't be a crime motive but that fact is generally lost.

Social Security was a case of the government not addressing the problem but instead addressing the symptom of the problem. It adversely affects every working American because it's a welfare program instead of a program where the government could have actually addressed the problem identified in the 1930's. The problem was that individuals did not build assets (wealth) during their working careers that would provide income during retirement. To address the building of assets during the working career of the person we need to start on "day one" of that working career and then build assets over the entire working career. Had that been done in the 1930's we wouldn't have a problem today. Today we have a far greater problem than we did in the 1930's because today we need to address those that have already been sucked into the "welfare" system. We have to "cover" the benefits already promised for up to 45 years while we also build personal assets (wealth) for those embarking on their working years today. We can make the change but we must accept the transitional costs that the change mandate. I've estimated that to be about $40 trillion, or an average of almost $1 trillion per year, but in truth the cost of transition starts out high, then gets higher, and then diminishes over time until it virtually disappears.

I've made pragmatic suggestions to do this but I've never seen any Republican proposal that accepted the high costs of transition that would require an additional revenue of about $1 trillion per year that can only be provided by a $1 trillion tax increase. Instead, at best, we get proposals for "privatization" based upon reducing poverty level Social Security welfare benefits that will only result in Social Security retirees to obtain more (general fund) welfare benefits just to survive. Creating more poverty by reducing Social Security benefits, like Paul Ryan has advocated, is about the stupidest proposal I've ever read because it just creates a need for more "welfare" to mitigate the effects of the poverty.

 

There is no real difference between general fund and soc sec fund. Slashing government spending is the only way to do it. Paul Ryan has a draw down approach, it isn't just lower payouts. I prefer replacing it with a version of the negative income tax tied to median income. Have you seen that thread I had? I keep shilling it search box "negative income tax"

Governments discriminatory laws and failure to protect property and individual rights is what got us here in the first place, and there backwards poverty laws perpetuate the issue to some degree. They are not the answer to fixing poverty in the black community as they have clearly demonstrated. More black kids in jail, murdered at a young age, and unemployed then when they started. Millions more can't live a normal childhood because of unsafe neighborhoods. For children born into poverty in Detroit today it is even worse then back in the day when the AFL CIO was assaulting them.

Vouchers, privatizing the projects, negative income tax, and removal of all special labor taxes plus tax free enterprise zones (all taxes) for 10 years will do a lot more then the current plan.

 

Do you disagree that a persons willingness to accept public assistance is dependent upon societal norms and the relative status of their peers? I'm not attempting to reject the neoclassical approach, only the notion that it's universally applicable.

Odd, broad brush rejection of what I believe to be a tautology: Everything is dependent on the circumstances of time and place.

I think (and believe this to be a supportable position) it depends on the job, many folks at the bottom of the income distribution work in jobs that are unsatisfying and are quite literally an exchange between leisure and a paycheck, while others find their work engaging and a fulfilling part of their lives. Regardless it seems wholly separate from the point I was trying to make that if A) you're free of societal pressures and B) your job prospects are comprised of unsatisfactory and unfulfilling jobs that opting to be on public assistance may be your best alternative if said assistance is generous relative to your alternatives.

I'm open to other possibilities however, so explain to me how a very generous welfare system encourages people to A) re-enter the workforce and B) remain in the workforce if wages are similar to said public assistance? Are menial jobs so fulfilling that it'd be worth sacrificing huge amounts of leisure time? I simply don't understand the incentives of this scenario.

 

This is just a reference to social capital and how that, for example, impacts on the indifference curve. You're still within the confines of the neoclassical orthodoxy and therefore its labour supply assumptions.

You're really suggesting some form of non-pecuniary benefit. Of course that would suggest that wages in 'good jobs' will necessarily fall. Its much more than that of course. At the very least it refers to how monopsony conditions would occur even with perfect labour market knowledge. At worst it destroys the neoclassical approach. We cannot assume a trade between two goods. The green economist, for example, adapting alienation analysis would link it all to firm size, describing the inefficiency generated through economies of scale and division of labour.

That's the problem: you've attacked the neoclassical approach but you haven't realised the consequences for economic study. Where do heterodox schools, for example, support the welfare work disincentive model? Its much more complex than the prance given on this thread

 

I would highly recommend reading the tax laws related to FICA/Payroll/Self-Employment taxes and Social Security/Medicare. FICA/Payroll/Self-Employment taxes can only be spent to fund Social Security/Mediare or loaned to the US government to use for general expendatures where general taxation doesn't provide enough revenue to pay for general expendatures. The problem really started in 1986 under Reagan when the FICA/Payroll/Self-Employment taxes were increased to cover "future expendatures" taking Social Security/Medicare off of the "pay as you go" tax foundation it was created upon. This created "surplus" annual revenue that was borrowed to cover the loss of revenue from the Reagan era general tax cuts. It created the "rob Peter to pay Paul" finanicial accounting of the US government but all of this spending of borrowed funds needed to be paid back when the expendatures for Social Security/Medicare started spending more than the revenues being collected.

What "conservatives" are complaining about today is that the time has come to pay for the general tax revenue shortfalls that started under Reagan where the government had to borrow from the Social Security Trust Fund to pay for the general expendatures of government. If the general taxation would have been high enough then we wouldn't have had to borrow from the Trust Fund.

Of course if the excess revenue wasn't loaned out then it could only have been "saved" in coinage (i.e. American Eagle coins) which would have increased the "value" of the Trust Fund over what the extremely low interest rates the government paid on the borrowing of the funds.

What Paul Ryan is doing is trying to place the burden of prior Republican general fund tax cuts that resulted in a failure of general taxation to pay for general expendatures in the past on the workers of America today that will be retirees in the future that paid excessive FICA/Payroll/Self-Employment taxes since 1986 above what was required to fund Social Securty/Medicare (until recently) on a welfare program that was established as a "pay as you go" basis. The Paul Ryan proposals result in a future reduction in the average $15,000/yr benefits that are already poverty level (albeit not "official poverty level" benefits that are manipulated by politicans to distort how much poverty actually exists).

We've already had hikes in the retirement age and while people do live longer they're still fundamentally "worn out" from work by age 65. I'm 64 and have had a desk job for years and I know my body is, to some degree, "worn out" and I even can't imagine how a laborer like a construction worker can work to the age of 65 and Congress wants them to work even longer today.

The Republicans need to stop trying to screw the workers of America by reducing benefits that are already what can be considered to be poverty level or below on the average. I don't like the Social Security welfare program but it's what we have and because of what it is the problem with Social Security does not have a "spending" problem but instead it has a "revenue" problem. Even someone receiving maximum SS retirement benefits, if that's all they have, is going to live in poverty in the United States today. When we look at the fact that the average American only has about $100,000 at retirement age then we know that they're going to basically live on Social Security and they will live in poverty. Those are the people that Ryan Paul, Rand Paul, and the Tea Party Republicans are targeting with their proposed cuts to Social Security.

I'll respond on that thread.

No, what got us here in the "first place" was "white Christian male supremacy" in the United States. It is the root of the problem related to discrimination and oppression based upon the invidious criteria of race, ethnicity, gender, religious beliefs, sexual orientation, etc. and that is a problem is with "Americans" and not the government per se but it is also a problem the government cannot prevent from happening. The government cannot legislate away individual prejudice. Admittedly the government, in trying to address the real problem of "white Christian male supremacy" in the United States has been ineffective often because it fails to acknowledge the actual problem. While it attempts to mitigate the effects of the problem the problem itself is beyond the ability of government to address. Of course the government can make the problem worse as well such as with taxation that disproportionaly affects those adversely affected by the invidious discrimination and oppression. This just adds "insult to injury" when the poor face the highest tax burden relative to income which is well documented in the United States.

 

Social security since it started basically was used to pay for general expenses, like WW2 etc... It would have ran out of cash and been paid back with printed money or big taxes from the people who pay for it in the first place if the reagan reforms didnt happen Since they set payout rules and money is fungible it doesn't matter what is on paper, it has always been treated just as if it were general fund money for all intents and purposes.

I will get back to the rest later, but they haven't screwed anyone out of soc sec except to the extent they spent new debt money. Besides, those seniors are passing that debt to kids to pay off and are not asking to Paul's their share of the interest before they go. How much more worker revenue and for how much longer? Don't make a bad deal worse for the new generation, the last was told that social security was a hoorible plan to begin with. They should have listened not passed on their problems. Today's seniors are the richest in history without it.

In any event we both agree I think the program should be scrapped?

As to the race issue. Has the culture come around faster now that the government doesn't discriminate or when it did on the books? Culture moved government I think you will see. MLK wasn't a politician. Laws keep people apart, they were not the way to deal with racism then, not are they the way to deal with them now.

 

This is false because the taxes were being totally consumed to fund expendatures for Social Security benefits during WW II. There weren't excess revenues being generated from FICA/Payroll/Self-employment taxes until 1986. Prior to then it was strictly "pay as you go" without any accumulation of excess revenue.

 

The problem identified in the 1930's where 1/2 of the people don't invest enough to accumulate enough wealth (assets) to provide income during retirement still exists because Social Security didn't address that problem. Instead it addressed the "symptom" which was the lack of income with a "pay-as-you-go" welfare program. The problem has not nor will it go away because 1/2 of the People are still financially irresponsible. If we ended Social Security today roughly 1/2 of the people too old to work would end up being homeless and starving to death. Only if Social Security becomes a mandator privatized investment program will the "problem" be resolved and that requires up to 45 years to fully implement. There are high transitional costs associated with this transition that would require new taxation to fund but basically that taxation ceases to exist by the end of the 45 year transition.

I have stated repeatedly that the problem of racial and gender discrimination is a problem that we, the People, need to address. The problem is that so many simply refuse to acknowledge the problem exists. This is especially true for "conservatives" that statistics show are the greatest single group expressing prejudice. We've shown them study after study and they just deny the conclusions of the studies. If they don't recognize they have a problem then they won't address the problem. I should also note that Democrats also have this problem although only 1/2 as many Democrats express anti-black racial prejudice when compared to Republicans. The problem exists across all political ideologies and living in denial is not going to fix the problem.

It is not a problem the government can fix. It is a problem that only we can fix. The best government can do is to try and mitigate the effects of the problem until we, the People, fix the problem. We could agree that the government isn't all that good at mitigating problems it can't fix but it does have a role and responsibility to try.

 

Ok, so why then did you insist that I needed to reject the neoclassical approach to suggest what I did? Your previous comments implied that if sociological conditions were considered then I'd be forced to "reject the whole neoclassical approach" perhaps you'd like to expound upon that.

A fact of the matter for those who not only work, but enjoy the work they do.

Potentially, but this would depend on many factors, such as the societal benefit of certain jobs (e.g. doctors and lawyers) or the relative difficulty of the job (e.g. software engineers). So while they may derive some compensation outside of the pay check, their pay remains high because of either the demand for their services or their relative scarcity.

Green behind the ears or green in the colloquial reference to environmentally conscious persons? I'm unfamiliar with the term.

Firm size would fail to explain a great deal of behavior, for instance, why would a software developer relinquish a higher salary, security and benefits at a fortune 100 company to invest his time and energy in a start-up? Maybe all I'm trying to say is that it isn't black and white, some folks do crappy jobs for a paycheck and hate every moment and some people work because they love what they do and both of those are scattered across the distribution.

Certainly, we're (with some exceptions) laymen engaging in dialog for various reasons, some to convince, others to learn while others motives remain unclear. Most unclear of all is what good it does to point out to a crowd of amateurs that they are, in fact, amateurs; but since we're making declarations of that which is plain to see, the sky is blue and the grass is green.

 

I stated that, to question the comment that more generous welfare and slower benefit withdrawal can actually increase work incentives., you'd ultimately have to reject the neoclassical approach. All you've done, however, is come out with comment consistent with the neoclassical approach.

Again, all you've done is make comment over how the indifference curve is formed. That isn't particularly interesting.

Which, if market forces operate, should lead to wage reductions (given the worker acquires utility from the non-pecuniary benefit)

Societal benefit is irrelevant to the comment, unless of course you're referring to public sector employment where social norms may be applied because of a lack of competition (and increased bargaining power). The relative difficulty of acquiring a job is also a red herring. That would restrict supply and impact on wage, but my comment of course assumed ceteris paribus (i.e. wage reductions because of non-pecuniary gain)

Green in terms of political economic school of thought, encompassing environmentalism but- given the analysis into sustainability- also a focus on big business.

You didn't respond: Where do heterodox schools support the welfare work disincentive model?

 

Wages in good job would fall? People with fulfilling jobs add value and know it. We are much more likely to push our wages close to the value we generate, because we can change employers more easily than we can be replaced.

What gibberish

That is an answer? ROTFL

The cultural melting pot that is the US is largely free of societal pressure when it comes to accepting public assistance. The large family mentality that had allowed socialism to work in Europe doesn't exist in the US. European's are finding immigration, from radically different cultures, is having the same effect there.

 

Of course. The trade-off between pecuniary and non-pecuniary gains is well known and also a crucial part of the orthodox approach that Anikdote would have to dismiss.

I don't expect a right wing authoritarian to understand the labour market. They'd have to admit their authoritarianism. You're not going to say anything remotely useful

 

It's no different than any insurance. I think it can be made better as a non-profit. You put the profit motive in there and people get greedy and suddenly theres all sorts of fine print that eliminates you from collecting.

 

We're not talking about flexible work hours that an employers can use to augment pay.

I enjoy engineering, other engineers doing the same work don't - do I get paid less because I enjoy what I do?

I understood the words, and your crude attempt to sound intelligent by using uncommon terms. In this level of conversation, the only difference between non-pecuniary and non-monetary is your sense of self importance.

What "useful" information does this statement contain? Lots of buzz words, no details.

Are the consequences too complicate to provide?

Why do you limit your discussion to heterodox schools, are mainstream economics outside your comfort zone?

 

Anikdote was certainly referring to non-pecuniary gains. Its essentially the reverse of compensating differentials analysis.

You're actually trying to refer to monopsony through heterogeneous worker preferences. That can't be used to dismiss the orthodox labour supply approach. It can, mind you, help us understand why wages will not necessarily reflect productivity (e.g. its been used within minimum wage analysis)

I'm using the neoclassical economics vocab as the discussion is about the neoclassical approach. You may not understand that, but that isn't interesting.

You've quoted a question. Anikdote has essentially maintained the neoclassical labour supply approach. We know that can't be used to support the simplistic work disincentive hypothesis (given more generous welfare can eliminate the corner solution problem associated with unemployment traps; i.e. it can induce work incentives)

You're not making sense again. Its not difficult: Anikdote has been informed that the neoclassical approach to labour supply cannot support the simple disincentive hypothesis. He therefore has to find an alternative approach. He hasn't come up with one. He'd perhaps have to go with the Marxist version of the shirking hypothesis (but that will be a slightly different understanding of incentives, given it will refer to those in work)

 

Not Amused, the fortunate few could than avail themselves tax deductions to fund charity devised primarily for their own benefits without regard for the truly needy residing close enough to commute. I'm,referring to the working poow that collect garbage or perform other tasks lesser paying jobs for the benefits of the more financially favored. Of course such a community has a great need with more expensive and convenient amenities. This in effect places a greater burden upon the other tax payer’s. The cleaning ladies have every right to avail themselves of the yacht dock’s amenities; (if they reside in within the favored community).

Respectfully, Supposn

 

Always find it interesting that for some the answer to issues with any program is to throw the entire program away and build a new unproven system instead of simply correcting the flaws with the current system.

 

The consequence of ideological grunt I'm afraid.

 

I've asked myself that question many times and the best answer is that she will still be unemployed AND will be $100,000 in debt AFTER she goes to school. The University of Phoenix is now the largest school in the nation in terms of enrollment. Have you seen some of the monuments they have built for themselves? Education is a scam.

 

The rate of return shows otherwise. The problem is when people think its a purely supply side issue. When that happens we just get better educated unemployed

 

The rate of return is getting skinnier and skinnier. And the education buildings just keep getting taller and shinier. There must be big money in it or every other tv commercial wouldn't be from ITT Tech.

 

Prove it!