How a broken welfare system keeps people trapped in dependency


It’s a natural human impulse to want to help those in need. For many people, it also seems logical to use the mechanisms of government as a primary instrument of aid. Expansive welfare states have destructive unintended consequences, however, keeping people trapped in a cycle of poverty and unfulfilling lives, argue authors Phil Harvey and Lisa Conyers of the DKT Liberty Project in a new book, The Human Cost of Welfare: How the System Hurts the People It's Supposed to Help.

Watch an introduction to The Human Cost of Welfare:

“The fact that welfare might actually be harmful to those it is meant to benefit dawned gradually on us,” the authors explain in the book’s introduction. “Living and working with the poor in many parts of the world, we found it easy enough to see that humans everywhere were happier when they were self-sufficient. Only over time we realized that people receiving welfare payments in the United States often seemed less satisfied with their lives than many people in developing nations who were getting no financial aid and who were doing backbreaking work to survive. Given such enormous expenditures and such minimal results, we started wondering how the richest nation in the world could better address the issue of work—indeed the necessity of work—as a component of human happiness, even while providing significant help to its neediest citizens.”

In practice, welfare systems often have perverse incentive structures that discourage recipients of aid from trying to seek employment opportunities because benefits disappear once they start working. Harvey and Conyers propose an array of alternatives that encourage productive activity, including removing financial penalties for welfare recipients who work, requiring work in order to receive benefits, establishing wage subsidies for low-income workers, privatizing the welfare system, helping employers create job opportunities for beneficiaries, and more.

Watch an interview with Phil Harvey and Lisa Conyers on ReasonTV

“This book is valuable for many reasons,” writes Jonathan Rauch, senior fellow at the Brookings Institution and contributing editor for The Atlantic, in the book’s foreword. “Although the authors have a point of view, they are careful with the evidence, offering an accurate and comprehensive account. … Another virtue of The Human Cost of Welfare is that it lets us hear the voices of the people welfare serves. Often those voices are strikingly clear and candid. No expert could explain as well as this mother in Oregon how Medicaid’s benefits cliff pushes her into the gray economy: ‘I just do babysitting out of my house, for cash, for neighbors, and I rent out my garage to a guy who works on motorcycles on the side. That is all cash I don’t declare, so I have some income, but I don’t have to report it and lose my benefits.’”

The Human Cost of Welfare includes the personal stories of welfare recipients from throughout the United States, based on more than 100 interviews with “men and women who feel trapped by our current welfare system.” Their narratives paint a vivid portrait of a broken welfare system that prevents people on a massive scale from working, gaining productive skills, improving their lives, and building a brighter future for themselves and their families.

“Highly readable and thoroughly researched, this book reveals the tragic secret of our welfare state: It is hurting the people it is intended to help,” said Peter Goettler, Cato Institute president and Atlas Network board member. “The Human Cost of Welfare then provides practical suggestions for righting this wrong.”