A better way than welfare


We all want a society in which we can get more work done with less.

Unlike our ancestors, who had no choice but to toil in the fields, many of us spend our working days in comfortable climate-controlled buildings. This positive development occurred primarily due to two factors: increases in productivity and the division of labor. We should continue to welcome further developments in this area so that people are able to produce more with less, leaving more time for leisure, family, education, or creating new inventions.

However, unlike the healthy process of productivity and labor improvements, a new, potentially harmful type of labor phenomenon is occurring: The government is paying people not to work. This has happened for decades through many well-meaning but largely ineffective social welfare programs. But it has significantly intensified in the aftermath of COVID-19 lockdowns. The government has passed several rounds of stimulus packages to give additional unemployment benefits to millions of people.

While few are opposed to reasonable unemployment benefits in cases of true hardship, the COVID-19 benefits go far beyond that threshold. They pay millions of people who are perfectly capable of finding a job and working to stay home and stay out of the labor market. Through this, the government has managed stealthily, or perhaps not so stealthily, to introduce a preliminary version of Universal Basic Income. This oft-touted idea proposes to pay citizens a guaranteed monthly stipend without the requirement to work. It is intended as a way to improve quality of life and reduce poverty, at least according to its proponents. The scientific literature is mixed on the efficacy of UBI, but one troubling development following the provision of generous COVID-19 benefits is that employers are having nearly unprecedented difficulty in finding workers.

Pointing to extra government payments as a cause, Federal Reserve Chairman Jerome Powell recently remarked, “Enhanced unemployment benefits may be a factor limiting job growth.”

While many industries have been badly affected by the pandemic, the restaurant industry has been particularly hard hit. A recent Department of Labor report indicates that there are 930,000 unfilled restaurant jobs as owners struggle to compete with the enhanced unemployment benefits. Although the Federal Reserve expects labor shortages due to COVID-19 enhanced unemployment benefits to be short-term due to the September expiration date of those benefits, many voices are pushing to establish UBI permanently.

Indeed, history shows that once such benefits are initiated, they can be nearly impossible to retract; President Ronald Reagan remarked, “The closest thing on Earth to eternal life is a government program.” The long-term impact of taking millions of people out of the workforce is yet unknown. But we can be confident that there will be repercussions for social stability, crime, and economic growth.

So, what’s the right path forward?

As the consolidation of resources in the hands of the few accelerates, as leaders continue to sell out our industries, and as financialization continues to strip our industrial base of productive value in return for short-term profit, there will be more calls for policies like UBI to address the economic malaise. Nevertheless, we must reject the seemingly easy answer of UBI for a number of reasons. Not the least of which is that UBI might harm those it purports to help. UBI could permanently undermine the concept of meaningful work.

Instead of trying to turn citizens into permanent wards of the state, policymakers should focus on solving the root cause of our current labor problems. We should reduce the burdens on finding meaningful work and alleviate poverty by increasing productivity, spurring entrepreneurship and innovation to birth new products and new industries. We should adopt technology that helps us get more done with less work and protect American industries and intellectual property.

To do anything less will push America further down the road of dependency on China. It will push people further down the road of despair.

Ben Carson is the founder and chairman of the American Cornerstone Institute and the former 17th secretary of the Department of Housing and Urban Development.

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