Greg Barns has a piece in today’s Herald-Sun (not online, sorry), which makes the traditional leftist argument against US welfare reform. These kinds of opeds – a hardy perennial in the Australian debate – make the essentially correct point that welfare reform was a tough love approach. But they also make three standard errors.
1. They focus on time limits, and ignore the massive expansion of the US EITC, a wage subsidy to low-wage workers that now amounts to $35 billion per year. That’s a bigger transfer to the poor than anything in Lyndon Johnson’s war on poverty.
2. They ignore the increase in labour force participation, which was substantial, particularly for single women.
3. They’re muddy about the counterfactual, tending to imply that the status quo is just fine (ie. that our current approach to the Disability Support Pension is the best solution).
US welfare reform was no panacea, but like US foreign policy, it’s easy to over-simplify it from the other side of the Pacific.