Can Welfare Actually Create Incentives to Fail?

Thomas Sowell - Welfare
Thomas Sowell - Welfare

Thomas Sowell debates the dynamics of welfare with Pennsylvania Secretary of Welfare, Helen O'Banion (1980)


Thomas Sowell is simply one of the most brilliant minds of the 20th and 21st centuries. When the issue at hand is social welfare programs, his intellectual mastery is always on full display.

Flashback to 1980: In a debate with the Pennsylvania Secretary of Welfare, Sowell makes the case that the welfare system actually subsidizes and incentivizes failure. The way he describes the fundamental flaw of the system is on point.

What the welfare system and other kinds of governmental programs are doing is paying people to fail insofar as they fail they receive the money and so far as they succeed even to a moderate extent the money is taken away.

No one begrudges the safety net, but while the idea behind providing financial assistance during lean times may be benevolent, the long-term consequence of the approach is that people in lower income brackets no longer look for more meaningful and higher paying work. After all, if one is able to take in the a certain amount of money while on social assistance and required to work very little, why would he have any reason to seek out a job that would require more hours for the same amount of income?

This incentive system also exists in other areas of life as well, not merely in assistance to needy families. As Sowell further explains, school systems experience the same predicament.

This is even extended into the school systems where they will give money to schools with low scores. Insofar as the school improves its education, the money is taken away so that you are subsidizing people to fail in their own private lives and become more dependent upon the handouts.

Our country was founded on the idea that all people should be able to work and advance in the world, and that governments should be instituted to foster their ability to produce. A system that acts contrary to that must be corrected.

It will take making the moral case for even further welfare reform, possibly even policy initiatives like wage subsidies that could incentivize people to work. But one thing is for sure, and Dr. Sowell made it abundantly clear: we cannot allow ourselves to maintain a welfare system that harms poor people by incentivizing failure and non-work.