Why Big Business Loves Desperate Workers how a strong social safety net can make us all more free

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https://www.commondreams.org/view/2014/07/17-2



We don’t think enough about the economic functions of social welfare policy, or about the relationship between the safety net and labor markets, and this hinders our ability to make sense of why some people fight so hard against programs that aid poor and low-income people: We mistake them for anti-welfare ideologues, and dismiss them as cruel or ignorant, but there’s an economic logic to their activism, one that’s revealed if we look at the relationship between welfare and work from both the employee’s and the employer’s perspective. Let me explain.

Imagine that we have two workers, worker K and worker O, each with two young children.

Worker K is laid off when the company “downsizes.” K is nervous, but has some savings, is eligible for Unemployment Insurance benefits, Medicaid, food stamps (SNAP), and TANF, has access to free local day care, and lives in a Section 8 apartment, with their monthly rent tied to their income.

While K is not living as well as when working, if K were eligible for all of these programs, which would be highly unusual, K will be able to get by. K can pay the rent and buy food and remain insured and with some belt-tightening, will be okay for a while.

Worker O, by contrast, is fired, even though O didn’t do anything wrong. O is therefore ineligible for UI. O has no savings, cannot afford insurance, even with a subsidy through the Affordable Care Act, is not eligible for Medicaid or food stamps or TANF, has no reliable, affordable day care, and has no access to a housing subsidy. As a result, O is in trouble, and is desperate and perched on the edge of homelessness.