OPINION | Welfare Walls, Not Welfare, Discourage Work

The character of the work-shy welfare recipient, perpetually dependent on government, is one of the more perpetual hate figures of political discourse in the developed world. Whether the “welfare queen” that Ronald Reagan rode to success, the ever-present “benefit scroungers” of Britain, or, indeed, the “gold-plated health benefits” for “bogus refugees” in Canada, the sense that someone is unduly profiting from the public purse runs deep. In this way, at least some degree of anti-welfare rhetoric is less driven by loathing of the poor per se, than it is by anger at generous MP pensions or contract procurement corruption. It’s a sense that government spending isn’t doing what it says on the label, the public may even agree with the stated objective, but rather is simply a way for individuals to feather their nests on the public dime. 

Numbers on welfare fraud are, as any social policy researcher will tell you, vanishingly minor, especially when compared to tax evasion, but vivid individual stories have a tendency to stick in the public mind more than these impersonal figures. Further, as anyone who’s ever been on social assistance will tell you, it would take a certain kind of masochism to deliberately put oneself through that sort of intrusive bureaucratic wringer for the pittance of assistance on offer in the presence of better options. The cynical observer may conclude that the majority of people are simply totally indifferent to the plight of the poor, but the evidence both in terms of public opinion and policy design points to a subtler conclusion, one which speaks to the dangers of program designs working at cross-purposes.

In surveys, there is a consistent strange split in public perception towards social programs which believe the government should “do more to help the poor”, and express dissatisfaction with current anti-poverty efforts, whilst also believing that spending on “welfare” should be curtailed or made more conditional. There are a number of lenses through which to interpret this initially curious finding. One could query with the way “welfare” has become particularly associated with discriminated racial minorities, or ask what sort of “help”, exactly, the people answering that question would want administered. One could also ask what, exactly, “welfare” means in this context. Is it any government cheque? Hardly likely, as no one in the political mainstream seriously proposes doing away with Old Age Security, Employment Insurance or the Canada Pension Plan. Is it only means-tested benefits? Perhaps, but only the most two-dimensional Dickens knock-off would want to abolish state support for the severely disabled. 

No, what is meant by “welfare” is social assistance, general relief from destitution for the “able-bodied” poor. The resistance to expanding social protection, or even more radical steps such as instituting a basic income, effectively comes from this impression that programs of this specific type encourage those who could work to not do so. This is why, especially following federal cutbacks and block granting of social transfers in the mid-90s, criteria for receiving benefits was made substantially stricter and accompanied by mandatory participation in work-oriented activities (job coaching, volunteer work, etc.). The question of whether or not so-called “workfare” arrangements are, in and of themselves, advisable or defensible is not a question I will not attempt to answer here. Anecdotally, most individuals I have known find much of the activities involved, particularly the resume and interview skills portions, redundant and infantilizing, though there is evidence of some specific work training initiatives linked to social assistance designed at the local level being effective.

The Policy Details Matter

In any case, at the same time as this push towards work within the welfare system was occurring, a mandate for cost-control pushed more and more benefits behind the “welfare wall” and instituted steeper benefit clawbacks for persons who were moving from social assistance into work. What many people who either have not used social assistance or don’t study it as a matter of public policy may not realize is that “welfare” is not simply, in most cases, cash benefits, though these are the most visible elements. Rather, a certain group of in-kind benefits are also attached to being on the welfare rolls in most provinces, most prominently including drug and dental insurance and child care subsidies. Critically, going off the system, the ostensible goal of get-tough workfare policies, means losing these in-kind supports entirely. Further, clawbacks begin at very low earnings levels (currently $200 per month in Ontario), thereby discouraging outside income beyond this point. Many welfare recipients, given these factors, make the entirely rational calculation that getting a job, particularly one which is entry level or part-time, will leave them little better off, and indeed may worsen their financial situation if they face high medical or child care costs. This is not laziness, this is simple economics; Adam Smith would be proud.

Do cash transfers, in and of themselves, make people lazy? The answer, from repeated studies of a number of programs in a number of countries, including Canada, is a resounding no. The evidence does, however, show that poorly designed welfare programs, particularly those with high benefit withdrawal ratios, do lead to work distinctive under misguided efforts to control costs. Ultimately, the solution, as Food Banks Canada recently called for, is some kind of guaranteed minimum income program, without the stigma and bureaucracy of welfare as we know it, combined with disassociation of the other benefits into broader health and workforce development initiatives. However, though interest in this approach is growing, it would be naïve to say it isn’t a political hard-sell in the current reality. A broader coalition needs to be built around the basic income strategy, in particular in pushing for pilot programs providing evidence to counteract the myths about basic income’s likely effects.


In the interim, though, some less radical fixes should be entirely possible. Protected earnings limits should be substantially raised, and fewer in-kind benefits immediately phased out behind the “welfare wall”. A conversation needs to be had in broader terms about an anti-poverty policy package unrelated to social assistance per se which tackles both in-work and out-of-work poverty. This would include wage subsidies, raising the minimum wage past the poverty line, and fostering a more pro-worker public policy environment generally. Over the longer-term, the drug and dental portions of benefits should be transformed into general low-income programs unrelated to the receipt of welfare (in fact, they should be a part of public health care available to all, but that is a slightly different matter).

To their credit, the Ontario government has moved in this direction for those receiving disability payments, via the Extended Supports initiative, but has not done similarly for Ontario Works recipients. The Sheikh-Lankin review, a document of infinite wisdom for social policy wonks, recommended eliminating the OW-ODSP distinction entirely, but the chances of the government taking this task on are slim. At the very least, harmonizing some of the more impactful rules between the programs would be a stat.  In short, we need to decide whether we want to do social assistance cheaply or whether we want to do it right; too often, it seems, we profess to the latter whilst living by the former.

The views, thoughts, and opinions expressed in this article belong solely to the author, and do not reflect the views of Conversationally Speaking Magazine
Carter Vance
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Carter Vance is a graduate of Carleton University's Institute of Political Economy. He has worked as a Policy Analyst and Researcher for a variety of government and non-profit organizations in Canada, the United Kingdom, Dominica and Indonesia. His research interests include social welfare policy, energy and natural resources policy, industrial development and political economy. His work has previously been published by the Macdonald-Laurier Institute, Jacobin Magazine and the Vimy Papers, amongst others.

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