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Ehis Odijie

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The Solution to Welfare Crisis

The problem

There have always been storms of argument regarding welfare. I think everyone would agree that there is a problem with the welfare system – an enduring problem from the inception of the current welfare paradigm. To turn to some of the nagging problems:

A. It is sometimes more profitable to stay at home and receive welfare payments than go out to work and receive less payment.

B. Some welfare programs encourage divorce.

C. There is a relationship between teenage pregnancy and welfare. At least in the UK a teenage mother gets rewarded for getting pregnant outside matrimony. This includes free home and constant pay from the government. Yes, you heard that right! This is an incentive for fatherlessness.

(If you need sources for any of the above claims - please inform me)

There is a problem here. . . . .

My solution

I stand on the principle of ‘welfare for everyone or welfare for no one’. In my opinion, this is the only way to solve the problem of incentives. A standard libertarian would prefer welfare for no one. I think that is not practical so I would go for welfare for everyone.

We could have a system of 10000 pounds negative tax income tax payable to everyone within a system . . and also a flat tax income tax of 25 per cent (the currency and figures are for analysis).

If you decide not to work you’d receive your 10000 pounds and do whatever you like with it. A salary of 20000 pounds will be taxed at 25 per cent – and so is a salary of 1000 pounds but everyone will receive the negative income of 10000 pounds.

Millionaires on 10 million income will have to contribute 25% to the system and get a negative income tax of 1000 pounds. The same rule for everyone . . . . This way the system will do away with the problem of incentive because it will be senseless for anyone to choose joblessness. More, we can then do away with all the welfare programs and bureaucracies.

If you have a different view please share.

Topics: Crisis childwelfare social welfare
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    Mitch Skiles

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    Aug 20 2012: The problem with welfare in America is that there is no incentive to get off of it. I have an idea though. GDP is determined by the country in which the final good was produced. Therefore, if we bring manufacturing back to the home country, GDP would be increased for that country (an incentive for the government). So government should take welfare money and contract business who are outsourcing their manufacturing jobs to regions where the pay is cheaper. The companies could continue to pay, let's say $2 an hour, and the welfare money could make up the additional $6 to meet minimum wage (or more). Than everyone on welfare can be given a job which does not require an education. They gain valuable work experience to help improve their chance of getting a future job, they continue to make the money needed to support their family, laziness is no longer created, and the standard of living in the entire nation would be improved.

    • Noah Crossfield

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      Aug 20 2012: I do enjoy your fresh outlook on the issue, but it seems that your remedy would not completely solve the problem. It seems like a great motivator, but what about those who are unable to work because of medical conditions? What about those who choose not to work? Also, what about larger families? Minimum wage is relatively not much compared to the standard of living in America. This is why some people choose to receive welfare as opposed to work; welfare pays more than some jobs. That being said, it is still incredibly difficult to pay for a larger family through only a minimum wage job. I enjoy your idea though. It is a step in the right direction, but this debate is very complicated. It is very hard to "fix" poverty because there are so many factors in it. I believe that one of the biggest reasons the welfare system has not been changed resides in the fact that removing benefits can be very devastating. It is a lose-lose situation. If we continue the path we are on, we go further into debt, but if we start removing benefits, we hurt those who are most vulnerable.
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        Mitch Skiles

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        Aug 20 2012: Thank you for bringing that up! I was referring those who are able to work and choose not to. Those unable to work and have large families need welfare, and they generally don't abuse it. But if someone is too lazy to get a job even though they are perfectly able, well that doesn't make much sense. However you made an excellent point that the incentive is to remain on welfare because it pays more than minimum wage jobs. Maybe there could be a system to apply for government aid while working (Think work-study for college financial aid) that helped out those people who need a little bit more than minimum wage. I realize this brings up the issue of equality, but don't you think it's at least a little bit more fair when then person collecting welfare now has to work just as much as the person who doesnt need welfare because they have secured a minimum wage job. Very complicated issue indeed

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