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[Jimmy]

If you think welfare is the answer to the problem I'd disagree. If the statistics are anything to go by, there's a significant trend in the USA towards the welfare lifestyle.

Here's the breakdown of the benefits of welfare vs. work for disposable income in the USA last year.

Spoiler (click to show/hide)

And here's the result:

Spoiler (click to show/hide)

For every 1.65 persons working a job, a person is getting government funded welfare. If you get more income from staying home, why would you work some horrible minimum wage job, or push yourself into debt studying for a degree to have a higher paid job for the same net disposable income?

Frankly it's an unsustainable model. We need less welfare and more incentive to work and pay taxes.

[Max White]

Well the difference is that we have a minimum wage that you can actually live off for a start, and secondly we have a system of declaring income to ensure we don't actually get welfare cliffs.
Your argument is invalid, because we already have countermeasures in place.

Edit: Actually, you want to know just how stupid your argument is Jimmy? Reudh here is looking hard for a job and can't find one. The problem isn't willingness to work, it is the fact that it is hard to find a damn job. We don't need more 'incentive to work', that isn't the problem at all! We need more jobs and more support for people looking.

[Jimmy]

You think so?

Spoiler (click to show/hide)

Push to full-time work punishes single mums

Single mothers who have been forced on to Newstart and accept a full-time minimum wage job are losing so much money in government benefits they are effectively earning $7.42 an hour for the transitional hours to full-time work.

An explosive new study by the National Centre for Social and Economic Modelling at the University of Canberra, and obtained by The Weekend Australian, compared the financial situations of 16 hypothetical families of low and middle income.

NATSEM found that as the single parent on Newstart moves to a part-time minimum wage position they keep 62c in the dollar and work for an effective $9.90 per hour. Their financial position is 45 per cent better than the no-job alternative, shifting them out of poverty and even beyond low-income status.

But NATSEM principal researcher Ben Phillips says the incentive structure shrinks when they move from a part-time position to a full-time minimum-wage position. In this case, his analysis finds single parents keep only 47c in the dollar as they start to pay income tax and lose much of their allowance.

Compared to the part-time minimum wage scenario this family's standard of living is 23 per cent higher and the parent's wage is effectively $7.42 an hour for the transitional hours to full-time work.

"The attractiveness of these extra hours will likely diminish further where childcare is required," Mr Phillips said.

In this scenario, these people, largely women, get the $15.95 an hour from the minimum wage but lose $8.53 in fewer benefits and income taxation, leaving them with a net hourly rate of $7.42 over the additional hours 19 to 38 as they transition from part-time to full-time work.

They get $20,318 a year in benefits mostly from Family Tax benefit A and B and a little Newstart as a full-time minimum wage worker.

"The recent change that started in January this year to reduce the taper rate of the NSA for single parents has certainly improved the incentive structure, but it remains that the incentive to work under the Newstart payment is less than that of the more permanent parenting payment -- the opposite of what should be the case," Mr Phillips said.

Under the previous regime when they were on the parenting payment, the mother kept 73c in the dollar of earned income in taking a part-time minimum wage, and her disposable income increased from $35,820 to $47,366 -- about $5310 higher than an equivalently employed single parent on Newstart.

In shifting from a part-time to a full-time minimum wage position, the single parent on a parenting payment faced a similar effective tax rate to the NSA single parent in losing 47c in the dollar but was $5360 a year ahead of the NSA equivalent.

Mr Phillips found that the single adult or family in by far the worst position is the single person on Newstart, who would need an extra $140 a week to lift them out of after-housing poverty.

After paying a modest rent of $150 a week, the single Newstart recipient is left with only $23 a day for other expenses.

The analysis also finds that singles and couples with children where the parents are on Newstart are also under the poverty line.

The study finds that while the recent policy change has improved the effective tax rates for those families on Newstart they still face steep average tax rates in moving to part-time or full-time work.

Edit: full article quoted for any who get stuck behind the paywall on the Australian site.

[Max White]

Can we not post links to new sites that require you to pay for the view? Find something objective and open for me to read.
EDIT: Or that, hold on a second for me to catch up.


Jimmy, did you read what I just read? I mean correct me if I am wrong, but the implication of that article is that people moving into some brackets don't gain as much as others, but there is always a gain rather than the formation of a cliff as you described.

EDIT HARDER: In fact your graph even support this. In all cases the person on minimum wage is getting more than the person on NSA.

[Descan]

The answer is not "more welfare". It's not "less welfare" either. It's "Smarter welfare"

As I said before but you ignored, they did an experiment in Dauphin, giving everyone 60% of then-poverty level income. Very few people stopped working, and those that did were teenaged males and new mothers. The males went to school, and the mothers spent more time with their kids. And even then, it was only a few percentage of those demographics, 4% at most for the women.

What DID happen is that high-school attendance went up, health-care visits (therapy and hospital) went down, and quality of life in the town went up.

Extrapolated out to the entire country (of Canada), health-care costs saved alone would equal 4 billion dollars. There is little added bureaucracy because it's not means tested, you just apply and get it. And other means-testing welfare systems can be abolished, saving more money.

Even if it were to cost more, which while I doubt it, is possible, that money used would have greater results than what is currently happening. It would be more efficient, would not lead to lower work levels, and would save money in a lot of different areas.

[Note: Everything after here is speculation. With the implication that everything above here is -not- speculation. Because it's not, it's concrete data. Look up Mincome.]
And that's not even counting the kind of power it would give the average worker. If you could stop working because of maltreatment or safety hazards at work and not starve within 2 months, quality of work environments would almost increase, hell income might even increase if workers had more clout by being able to quit more easily as incentives for employers to not be assholes.

In case it's not clear, to me, most welfare as it exists is good in intention, but becomes corrupted and stupid in implementation. Arguing to me by saying "But look at what all this welfare is doing! Income cliffs!" is worse than useless, because it gives a basic-income argument more weight and doesn't actually argue against what I've been saying.

[Reudh]

Well, considering that it's gotten to the point that without a job, I cannot afford to educate myself, even with the commonwealth supported place, I need either a job which is seeming near impossible (Every week, I hand out 100+ resumes.) or to be declared independent by reason of it being impossible to live at home, which would be fraud.

I really don't want to quit uni because I can't afford it. I have an assignment due this week that we get from a book I can't afford to buy. If Centrelink would listen to the populus that it's damn near impossible to get a job at 18-24 without pulling strings or being a friend of a friend, then I might be able to claim a livable amount.

What part of "I can afford $6/week." do you not understand? Ignoring my scholarship, I get $6/week. Including it, I'm lucky to get $60. Considering that my books cost $200 and if I don't do ANYTHING but pay for train in a week, I'd have to wait seven weeks before having enough money to buy a book, by which time I'd already be failing.


I'm studying in a field, which in America is glutted, but in Australia is in dire need. I am studying biomedical science as an undergraduate to get into Medicine postgrad. The industry is in such dire need that the government PAYS for people to move out to areas that need doctors.

[Reelya]

If you think welfare is the answer to the problem I'd disagree. If the statistics are anything to go by, there's a significant trend in the USA towards the welfare lifestyle.

Here's the breakdown of the benefits of welfare vs. work for disposable income in the USA last year.

Spoiler (click to show/hide)

And here's the result:

Spoiler (click to show/hide)

For every 1.65 persons working a job, a person is getting government funded welfare. If you get more income from staying home, why would you work some horrible minimum wage job, or push yourself into debt studying for a degree to have a higher paid job for the same net disposable income?

Frankly it's an unsustainable model. We need less welfare and more incentive to work and pay taxes.

That's not a fair reading of the statistic: "For every 1.65 persons working a job, a person is getting government funded welfare."

Most  welfare recipients in the USA at least, actually have jobs, as your first graph indicates, many, many people with non-zero income get welfare assistance, so the 2nd image's claims aren't very helpful - which programs are they considering "welfare"? Also, are pensioners / medicare recipients, considered welfare recipients? You know, America has no long-term federal unemployment benefits, the way Australia does. Food vouchers is all most people get.

[Jimmy]

It's the fact that welfare is front-loaded with benefits that reduce effective gain as taxable income increases that I'm pointing out. Do you get more money if you work more hours? Sure, because we have means tested welfare, you get to keep some of that money you're earning. However the flaw is that you get to keep effectively less and less the more you work.  As the article said, you're looking at about a 23% increase or approximately $150 extra a week from working 18 hours to working 38 hours a week. Average cost of daycare in Australia is about $30 a day out of pocket expenses after government subsidies are added. So if you move from doing two days to five, you get to keep about $60 of the money you earn.

Why not reward efforts to create higher amounts of taxable income instead of steadily reducing the incentives?

Australia did some experiments with economic stimulus too. Particularly during the 2008 global financial crisis, the Rudd government said "here you go folks! Our shout!" Results? Didn't really change anything. We avoided the worst of the global financial crisis because our dollar was strong against other global nations (anyone else remember when the Aussie dollar would buy US 50 cents? Now it's dollar for dollar). Aussies had a small increase in consumer spending but most just carried on as per normal. It was the Australian investors that started to buy up overseas companies and a sharp increase in Australian exports that kept the cash flowing into this country, not an increase in employment or decrease in health care costs. [Source]

If your goal is a university education, expect it to cost money. Frankly I wouldn't whine about the state of Australia's university fees, given that you can let the government foot the bill for your course in full, no interest, via HECS. I did Uni, lived in a horrible dirt-cheap flat, no car, no money, no computer, no phone line, borrowed textbooks from the Uni library, worked a nasty part-time job and lived for four years on $30 a week of groceries. Guess what? I got a degree. You sacrifice now for the future rewards.

[Reelya]

Australia did some experiments with economic stimulus too. Particularly during the 2008 global financial crisis, the Rudd government said "here you go folks! Our shout!" Results? Didn't really change anything.

Then you're saying tax breaks didn't help stimulate spending? Since the Rudd government gave some of the money back to every taxpayer, it was effectively a short-term income tax break.

From the article:

Single mothers who have been forced on to Newstart and accept a full-time minimum wage job are losing so much money in government benefits they are effectively earning $7.42 an hour for the transitional hours to full-time work.

You know, they're complaining here about a reduction in the welfare provided to single mothers, not an increase. They're getting less welfare under the NSA than they were under the single-parent pension. Which is basically saying, they used to get welfare even when they were working 38 hours per week, but that's been removed. Isn't that the same as you were advocating?

If your goal is a university education, expect it to cost money. Frankly I wouldn't whine about the state of Australia's university fees, given that you can let the government foot the bill for your course in full, no interest, via HECS. I did Uni, lived in a horrible dirt-cheap flat, no car, no money, no computer, no phone line, borrowed textbooks from the Uni library, worked a nasty part-time job and lived for four years on $30 a week of groceries. Guess what? I got a degree. You sacrifice now for the future rewards.

So you accept that government subsidies / welfare are useful in some contexts?

[Max White]

Government had a plan to avoid recession. End result: Nothing, we only achieved the desired result. Wayne Swan was later recognized as worlds best treasurer by Euromoney for his part. Clearly he had no idea what he was doing.

It wasn't all the training that made our runner win, it was the fact that he went the fastest!

[Reudh]

If your goal is a university education, expect it to cost money. Frankly I wouldn't whine about the state of Australia's university fees, given that you can let the government foot the bill for your course in full, no interest, via HECS. I did Uni, lived in a horrible dirt-cheap flat, no car, no money, no computer, no phone line, borrowed textbooks from the Uni library, worked a nasty part-time job and lived for four years on $30 a week of groceries. Guess what? I got a degree. You sacrifice now for the future rewards.

I don't mind the uni fees. What I'm saying is I have almost zero welfare, and no job. Moreover, I'm not whining, I am explaining my point of view, and it's quite frankly, unnecessary and inflammatory of you to say that I'm whining.

I do borrow textbooks from the uni library. I live at home, thankfully, but they can barely afford to support me. I would gladly work a nasty part-time job if anywhere would hire me. I would be happy to do all that you did, IF I could afford to. I cannot afford to live in a horrible dirt-cheap flat, hence I live at home and commute 80km so that I may study.

[Jimmy]

The economic stimulus package didn't make any significant change in the lower income brackets. What did happen was that the upper income brackets used their capital along with the favorable economic climate to strike out into weak foreign markets and generate strong trade profits. The government guaranteed bank deposits and wholesale funding, and this along with our banks being sensible enough in the first place not to copy America's toxic loan market meant there was plenty of capital to go around instead of being pulled out and stuffed into pillowcases (or offshore tax havens). The Reserve Bank started accepting mortgage backed securities as collateral from banks for repurchase agreements, meaning banks could confidently offer mortgages in a period where all anyone heard on the news was how evil they were and how they would destroy the economy. Then the Reserve Bank lowered interest rates, further stimulating the mortgage economy. The middle class confidently started sinking their cash into mortgage loans again, the banks kept generating capital, and investors utilized this capital to strengthen Australia's global position.

So does accepting welfare make me a hypocrite for thinking it's flawed? Hardly. For example, my situation meant I was living on an income well below the poverty line without work. Damn good incentive to get a job and pay some tax while I was studying. On the other hand, HECS is inherently flawed in execution regarding the payback scheme. For example, if I finished my degree, then married and never worked again, I'd never pay back a cent of HECS, which is taken purely from an individual's taxable income, not their spouse's. That's one loophole that needs plugging right there.

And hey mate, don't take me wrong, I respect you for getting the guts up to apply yourself to get a degree instead of going on the dole. My horrible flat was a 2 hour commute to Uni each direction, but it was walking distance to my part time job (a half hour walk each way, but still, work's work). It's ultimately a question of how much you sacrifice. There's gotta be work somewhere. I was lucky enough to get a job out of a work placement I did during my degree for some on-the-job experience, but my sister didn't have that kind of luck. She scrubbed toilets part time at the local shopping mall while she studied.

[Max White]

For example, my situation meant I was living on an income well below the poverty line without work. Damn good incentive to get a job and pay some tax while I was studying.

...

I want you to think very carefully about this statement, and how it might actually be applied to a lot of Australians trying to study right now. Seriously, try not to miss the irony.

You apparently think the problem is willingness to work. That is incorrect.

[Jimmy]

Sorry, guess I'm missing it? A lot of students live below the poverty line when they study?

Isn't that kind of the point? While your mates from high school get full time jobs, go out every weekend, drive cars and have fancy phones, you're lucky to have train fare at the concession rate. You buy your clothes from the op-shop. You know six recipes with 2 minute noodles as the main ingredient; two of those have noodles as the ONLY ingredient. You turn down trips to the movies with friends because you can't afford the ticket. Any free time not spent in lectures is spent studying, working or sleeping. And you do it for years.

Then you graduate, you get a job that pays twice what your mates from high school make, and you finally get to enjoy yourself. If it was easy everyone would do it. You sacrifice a few years of comfort in exchange for future security.

The basic government welfare gives you enough not to starve for awhile. It doesn't mean you get a free pass at an all-expenses paid lifestyle. You're given so pitifully little that working is basically your only option, and if you can't find work while you're studying, tough. Life's not fair, not everyone's a winner, and you're not the only one that wants that job. It's dog-eat-dog. The unemployment rate in Australia is 5.4%. So if you're the one guy in twenty that didn't get that job, what did the other nineteen have that you didn't? Figure that out and you're laughing.

[Max White]

The basic government welfare gives you enough not to starve for awhile.

Well, considering that it's gotten to the point that without a job, I cannot afford to educate myself, even with the commonwealth supported place, I need either a job which is seeming near impossible (Every week, I hand out 100+ resumes.) or to be declared independent by reason of it being impossible to live at home, which would be fraud.

Evidently, Jimmy, you are wrong about that.