Doctors Prescribing A Work Ethic

Matt Nolan has an interested blog about doctors being asked to join in the effort to move beneficiaries from welfare to work.

His post reminded me of an interesting (WARNING!) Daily Mail article about the consequences of an entitlement mentality.

The recently implemented changes to benefits are claiming success after essentially booting off people who no longer qualify.┬áThere is hardly any support for people down on their luck, I share Matt’s frustration around who to vote for. I don’t want to be a rational non-voter but that’s my only option!

The reason we have a basic level of distribution is because some people will always be down on their luck. They might be there through no fault of their own or from making dumb choices, but welfare is the only solution because hardly anyone cares about their own flesh and blood anymore.

This problem will become worse and will lead to major social unrest in the future. This is because the increasing rate of job polarisation means most new jobs will be part-time and low to medium skill with low rates of pay because a lot of people simply cannot become software developers or medical technicians.

I’m a fan of a negative income tax or guaranteed minimum income. In exchange for firing 6,000 people at MSD and all the other administration costs of NZ Super, “Jobseeker’s Allowance”, WINZ case managers, student allowance, DPB and other benefits (except for war pensions!), just give everyone a flat $9,000 a year.

These attempts to micro-manage how welfare spending is distributed are based on ideology not logical thought processes. When will some whinging farmers have their drought bailout money cut off because they’re sitting on multi-million dollar assets? Not under any government in New Zealand that runs an NZ Inc strategy hinged to Fonterra.

Doctors shouldn’t be used as tools in some ideological nonsense. Most beneficiaries are on a benefit because they have no other source of income or they have a lot of life debt that requires support. The rate of benefit fraud is actually a rounding error relative to the size of the welfare budget.

Matt is correct in thinking that reforms like these are targeted at the middle class – who think they’re hard done by when they get a lot of benefits. Most will send their kids to university with at least a student loan and some will even qualify for Working For Families.

The cognitive dissonance is kind of like superannuitants thinking they “earned” their NZ super because they paid their tax, when most will actually receive more than they paid in tax if they ever paid tax at all because of longer lifespans!

Pretty much every Kiwi who thinks they’re a hard working taxpayer is full of it. The bottom 80% of the income distribution will probably “break even” with the taxpayer by the end of their life. Think about all of the money spent on their education, their share of infrastructure spending, their share of super payouts, any hospital stays and a whole plethora of other benefits they would have received just because they were a New Zealand resident.

As technological unemployment rises, more and more people who thought they were hard working ubermenschs will find out that they’re not. They’ll find themselves unemployed and running out of their redundancy money because they bought a depreciating asset for $1 million with 10:1 leverage with a residential mortgage on a floating rate.

These people would correctly be peeved off if their local GP, treating them for depression or anxiety, starts asking them about their work ethic.

“But I bloody worked for 15 years before I lost my job!”…

Read more:
The Irony of Post-GFC New Zealand

The irony of post-GFC New Zealand is that a Keynesian fiscal stimulus characterised by enormous levels of deficit spending and...

Licensed Occupations And Income Inequality

One of the features of the Journal of Economic Perspectives is the Recommended Reading section. Aaron Edlin and Rebecca Haw...