From: cbbrowne@csi.uottawa.ca (Christopher Browne)
Subject: Re: Negative Income Tax (Was: Social programs)
Keywords: welfare poverty social programs public finance
Organization: Dept. of Computer Science, University of Ottawa
Date: Mon, 4 Jan 93 16:15:08 GMT

In article <93010221546@rwsys.wimsey.bc.ca> root@rwsys.wimsey.bc.ca (Superuser) writes:
>I got stuck on welfare for a time. I got off "a bit-at-a-time". Eg.
>
>Year 1, I managed to work some casual jobs for probably 60 days out
>of 365.
>
>Year 2, I made a goal to work the majority of the work days in the
>year. I worked 123 out of 200 workdays.
>
>Year 3, I had a full time job.
>
>There is not much incentive in the present structure. In fact, I felt
>like I needed to hide from welfare the idea that I might be able to
>work (in case I really couldn't, as I suspected). 

I'm starting to feel a little like Steve Potter in that I'm going to
say Yet Again:

Not only is there "not much incentive" in the present structure, there
is in fact actual DISINCENTIVE.  If you make enough (between about $7K
and a bit past the "upper end" of welfare), then you actually get LESS
than you would on welfare.

>I am also extremely
>dubious of some of the 'training' programs offered through the welfare
>agencies. They are often not worth the effort in terms of the occupational
>possibilities.

University programs are sometimes of questionable value; I don't doubt
that some of the "welfare training programs" may be worthless, or
perhaps even counterproductive.

>But your args suggest an idea to me. It's based on the notion that the 
>longer a person stays on welfare, the harder it is to get off. A graduation 
>of welfare rates could be offered. When you first get welfare it is at a rate 
>that will allow you some diginity as well as some food, but it declines month 
>by month to a bottom. Each time you take a job, even a short one, it begins
>to rise again. Whether it comes by way of NIT or monthly trips to the
>welfare office is yet to be decided. 

It probably doesn't matter, just so long as the "money redistribution
function" has the appropriate characteristics.

>Now, I'm not sure about these numbers, but here is an idea for someone 
>living in Vancouver who does not work.
>
>Month   Amt.
>1	$1000 (maximum obtainable from public coffers under any circs)
values omitted...
>10	$600
>.	.
>.	.
>Now, the rule about work should be that each 10 hrs of work in a month
>allows total income to increase to the next higher $50 increment. (total
>income includes net income from work). 
>
>This means if you've been on welfare for a year without working you will
>be getting $600 per month. But if you go out and do 4 x 8 hour shifts in
>a month, receiving say $7 per hr (net), you will pocket $224 from your job,
>and the 32 hrs will put your allowable income (in the first month of work)
>up by $150 to $750. You cheque from welfare will be $750 - $224 = $526.
>If you do it a second month, you go up to $900 allowable income. On the
>third month, you'll hit allowable of $1050, and 4th month $1200, but
>maximum from public coffers is $1000.

I would suggest a different way of evaluating things:
1) Don't play with "hours worked."  It's only got a fairly indirect
relationship to actual value produced/dollars earned.  Base it all on
actual dollars EARNED.

Otherwise, there will be lots of "games" (better known as frauds)
played with the scheme.  An employer that actually has to PAY the
employees will be less likely to do fraudulent things.

I can think of ways of turning your scheme into "free labour" for an
employer.  That's not what you meant to do.

2) Keep the system REAL simple.  Your system degrades income over
time.  To those that may be significantly less educated, this may get
VERY confusing.

The "Chris alternative":
Just change the rule that subtracts employment earnings
dollar-for-dollar off of the welfare payments.  Change it to something
like $0.35 for each dollar of earnings.

>The point is to get people to work as much as they can, and to encourage
>it to become a habit. Whether the scale runs from $600 to $1000 as I have
>suggested, or it somewhat different, the point is that it offers incentive
>in both an upward AND a downward direction. There can be different scales
>if need be, for visably disabled people, and those who are not.

Good point.  Not all people that are on welfare are there because they
don't want to work.

- I've an uncle who used to work on oil rigs.  He was involved with
cleaning up after oil drilling operations.  The use of the various
chemicals has messed up his skin, so that he can't do the work he's
TRAINED to do.  And he's only a couple of years from retirement.  The
WCB claimed it wasn't work related, so there's no disability pension.
Of course, the rashes cleared up nicely after he stopped working.

- I've got a friend that has MS, and is incapable of most sorts of
work.  She's virtually incapable of walking, has great difficulty
lifting things.  This means that working on an oil rig is out :-).
However, the "obvious" alternative of office work isn't much better,
as MS has adverse effects on memory and overall physical coordination.
There isn't much that she CAN do.

These are just two examples of "welfare situations" where incentive is
pretty much irrelevant.  In both cases, they'd LOVE to be working, but
just CAN'T.  There's probably lots of other cases like these.

What (ideally) the welfare system ought to do is to discriminate
between cases where welfare is truly necessary, and cases where people
need some encouragement to get off of welfare.  Doctor's certificates
are probably at least a partial answer to this; what's missing at this
point is the will/method to actually act on this information, and do
some "encouraging."

>Once your total income reaches the poverty line, you will hit a ceiling
>where you'll loose welfare dollar for dollar. (There is probably a better
>way to handle this withdrawl of benfits).

"Dollar-for-dollar" is the barrier that keeps people on welfare, since
it's actually WORSE than dollar for dollar when you consider other
taxes.  THIS is the enemy that most needs to be destroyed.

-- 
Christopher Browne                |     PGP 2.0 key available
cbbrowne@csi.uottawa.ca           |======================================
University of Ottawa              | Genius may have its limitations, but
Master of System Science Program  | stupidity is not thus handicapped.
Newsgroups: soc.culture.canada,can.politics