Competing Paternalism and RI’s Death Spiral

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Kevin Williamson gives some interesting thought to getting people from welfare to work.  The contrarian hook is that he’s coming out in favor of more employer paternalism and perhaps even something resembling the old company-town model.  But the upshot is an encouragement to out-of-the-box thinking.

Why not, for example, change the structure of unemployment insurance?  Rather than have a possible total on which the person can draw down until it runs out, let the person get some percentage of any unused balance as a lump-sum check after he or she finds (and holds) a job.  Now, I can think of a number of potential pitfalls to such a policy, but it has some beneficial features.  For one, it could flip the natural human impulse to strive for the biggest nut one can get; whereas, now, the unemployed person can feel as if he or she is losing out on “free” benefits by finding a job too quickly, that person would, instead, feel as if he or she is losing a bonus with each week’s small check.

Williamson’s focus, though, is the possibilities of the large check.  A person could pay off a lot of debt with a big check, including debt that he or she accumulates while preparing for, easing into, or relocating in order to find new work.  This brings to mind a quick item I posted in 2007, titled “Go West, Young Welfare Recipient.”  At the time, employers in Montana (among other places) were raising low-end salaries quickly because they couldn’t secure enough workers, so I suggested that we should stop contributing to low-skilled workers’ inertia in our struggling Ocean State economy and instead direct them west.

Williamson likewise takes for granted the desirability of having people relocate for work.  That’s where I think he misses a big, important piece of the puzzle.

As I observed a few weeks ago, with reference to Lawrence, Massachusetts, governments and their economic satellites are deeply invested in the notion that nobody should move beyond the reach of their own paternalism.  This paternalism may be expressed in charitable terms — “People shouldn’t have to leave their homes in order to make a living!” — but it’s ultimately self serving.  If Rhode Island were to have fewer needy people for any reason, but especially because they moved to other states with jobs on offer, then Rhode Island’s government-and-service complex would have to shed jobs and power.

Once again, we come to the same ol’ prior problem.  We need government that responds to the real needs of the people who live within its boundaries, not the institutional needs of the government, itself.  Unfortunately, those who prioritize the latter have much more incentive to be politically active, and the system has therefore become rigged.  As a result, people who are unable to make Rhode Island work for them and who don’t want to become dependent on government become the ones to leave the state.

This is what people mean when they talk about “a death spiral.”



  • Terry Gorman

    Great article. Especially the last paragraph !!

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