The voice of young liberal democrats


Welfare Doesn’t Work by georgeinwashington
November 8, 2007, 5:21 am
Filed under: America | Tags: , , ,

Newsnight’s feature on the US welfare system painted a picture of society in the States that is completely unrecognizable to anyone living here and the suggestion that a similar system should be implemented in the UK, is quite frankly criminal.

In the states the federal minimum wage is $5.55. There are 40 million people without health insurance and 9 million of them are children. 24% of the US workforce earn less than poverty level wages. In Washington DC, where I live and the Nations capital, the murder rate is around 15 times higher than London and the infant mortality rate is double that of Cuba. One third of DC residents are functionally illiterate and 1 in 20 are infected with HIV.

Why anyone in their right minds could even advocate introducing a welfare system that has clearly failed is beyond me.

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6 Comments so far
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My wife is American, was uninsured, worked in health care and is dismayed at the failures of the British system.

The US system has massive problems, but they are different to the ones you suggest.

The minimum wage acts as a barrier to work for the least productive. Contrary to what its supporters claim it reduces the income of the poor. If you want to help the poor try CBI or negative income tax. Also, consitutionally, I don’t believe that the Feds have the right to set a minimum wage, of course the constitution means very little today.

The health care system provides better quality of care for almost everyone. Those 40 million uninsured are made up largely of people who choose to be. The problem in the US is not that its a private system, its that its not a free market system and government interference has caused that (look at the Cato institute’s work for example – also many economists have looked into this).

DC’s problems are down to government failure, partly caused by the fact that it is federally governed, partly due to the idiotic decisions of local politicians, many of them meant to help the poor.

That poverty level doesn’t include benefits, and it is relative anyway. If people are starving then that is a problem. If they can’t afford the latest Nike’s or a flat screen TV then its no problem at all.

The US needs welfare reform. Health insurance needs to be decoupled from employment. Costs need to be transparent to the patient (no more $40 glasses of orange juice).

The post you link to mentions Wisconsin, not DC, as someone who lives in the US you should realise that states still have some rights (despite the best efforts of the Feds) and do things differently.
Reforms like those the US went through in the 90s are necessary in the UK to get people off benefit and into work so they can become functioning members of society. That is what the reforms of the last Liberal government attempted, its what we should be doing now.

So stop your ‘the American system is evil’ nonsense and take a cold look at it. It is failing in DC, aspects are failling in most places, but so is the British system. We need to look at what works, and much of the US system does.

Comment by Tristan Mills

The American system isn’t evil, just crap. The healthcare system in Britain may have problems but it is still free at the point of use – if you take out dentistry, whose practitioners should all be locked up until they agree to either (i) pay back all of their state funded medical training costs (ii) deal with NHS patients.

I grew up in a less well off part of south London where you might expect healthcare to be bad but I have always had a perfectly reasonable experience. I may sometimes have had to wait for four hours in casualty but I still got good care and it remained free.

I’ll take our flawed system over America’s any day.

Comment by wit and wisdom

I can’t comment on the competing views of the U.S welfare system as I have never lived in America and don’t have an in depth knowledge of the system. However, when it comes to Britain, I would question your blanket assertion (Tristan) that simply replicating US welfare reforms over here would get people off welfare and into work overnight.

My reasons for this are first, the massive difference in size of the voluntary sectors in the US and the UK as pointed out in the Newsnight article, and second, the difference between the US and UK job markets. America has a multiplicity of booming sectors with a relatively equal share of the labour force. In the UK, 81% of the labour force is employed by the Service sector. The service sector requires specific skills and often a substantive education.

In short, if you haven’t got the skills or qualifications to work in a bank or a PR firm, you’ll most likely end up working in Tesco or McDonalds. This isn’t meant as a criticism on thos who do take this route, but a criticism of the lack of choice available and restricted opportunities, not to mention the difference in wages which ultimately contributes to London fast becoming a city where half the population can’t afford to live.

This is only reinforced by a highly selective education system which automatically endows the rich with far greater opportunities for a prosperous and successful career, thereby further restricting social mobility which surely is the key to a prosperous and truly meritocratic free market economy.

It seems to therefore that to do away with our welfare system before dealing with these problems. Would be disastrous. At the moment, I still prefer the devil I know.

Comment by londonliberal

Tristan,

Whilst I agree that DC is a harsh comparison, I am afraid I can not agree on much else. How can you possibly say that most of the people who are uninsured in the States choose to be. 9 million children did not choose to be uninsured. Furthermore surveys consistently say that it is the high cost of health care and not choice that make it unavailable to the 47 million people (I was slightly wrong when I said 40 before) without health coverage. Think about it, 47 million people is approaching the population of England. Do you really think a population group the size of a medium sized country would choose not to have health insurance?

Dispite the difficulties of the DC government the problems I cite are urban rather than place specific. Milwaukee, a city in Wisconcen posts a poverty rate of 17.5% and this is raised to 30% of those under 18. The Federal poverty level by the way is $9,570 if single. In a four person family its 19,350. As the average cost for medical coverage is 11,000 for a family of four it is easy to see how it becomes unaffordable if your employer doesn’t cover you. It certainly isnt enough to buy the latest flat screen TV

Crime and social deprivation are there also, The Milwaukee Sentinel Journal recently reported that growing up in black Milwaukee was slightly more dangerous than a Marine’s tour of duty in Iraq.

I think the US is great for many things, otherwise, I wouldn’t be here, however the performance of the welfare system is not something that we should be looking to emulate.

Comment by georgeinwashington

London Liberal,

You are right, the size of the not for profit sector makes a huge difference here. I wrote a post about how it affects university education on this blog also. However I am confused about your assertion about the service sector. Tescos and McDonnalds are the service sector.

Comment by georgeinwashington

George,

My point is simply that in such a system where one sector dominates so much as in the UK, people effectively have to choose between working in JP Morgan and working in McDonalds and of course that choice more often than not is predicated on a person’s education and personal connections which depends on their background. As a result, many lose out on the McDonalds jobs, as such roles will go to those willing to work for the lowest salary, and lose out on the JP Morgan jobs because they lack the qualifications. Sunsequently, social mobility grinds to a halt and the wealth gap spirals out of control.

Comment by londonliberal




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