Work . . . Or Else

            In the Conservative Reform Network’s latest report on alleviating poverty through work, Michael Strain, director of economic policy studies and resident scholar at the American Enterprise Institute for Public Policy Research writes:

A job is about more than a paycheck.  It is about more than productivity and adding to the national income.  Working is central to the flourishing life.  One of the things sound public policy does is to help provide the conditions under which our fellow citizens can flourish, realize their whole human potential, and lead lives of dignity.  Public policy, then, is properly interested in helping to create a vibrant labor market.

            Strain also notes a decline in male labor participation that began in the 1950s.   “If fewer men are participating in the workforce because relatively more men would rather spend their time on other activities than in the past,” he says, “then the nature of our concern will be different than if fewer men are participating because firms don’t want to hire as many.  In the first case, we are witnessing a decline of labor supply; in the second, falling labor demand.”

            According to Strain, “A decline in the number of workers accompanied by an increase in wages implies that we are seeing a reduction in labor supply.  A decline of workers accompanied by a decline in wages implies that the demand for workers has fallen.”

            It’s a familiar fact by now that inflation adjusted wages for men without college degrees have stagnated or declined relative to the late 1970s.  That implies to Strain that our unemployment problem is demand driven. 

            For Strain, the likely causes for this inadequate demand for labor include “the changing nature of technology and its ability, through machines and software, to replace certain types of workers, along with the impact of globalization on the U.S. labor market.”  In other words, unemployment arises, not from lazy workers who prefer to do something other than work with their time, but from a paucity of appropriate work for the people looking for jobs.

             Strain presented his findings on a panel hosted by the American Enterprise Institute. He offered several solutions to unemployment, but, oddly, aside from “work-based learning programs” such as apprenticeships designed to give workers the skills employers need and will pay for, most of his other proposals are ultimately solutions tailored to labor supply problems.  Strain suggested, for example, cutting payroll taxes to increase wages and thus, the incentive for people to go to work.

            If low labor demand is the key problem, it puzzles me that co-panelists Kiki Bradley of Chartwell Policy Solutions and Robert Doar of AEI argued that the best way to reduce poverty is to include the same kinds of work requirements that the federal Temporary Assistance For Needy Families (TANF) program has.  TANF is what replaced “welfare as we know it” in 1996.

            Though it is undoubtedly a way of reducing the number of people receiving public assistance, cutting off cash assistance payments to people who fail to meet statutorily imposed work requirements is not an appropriate solution to a flagging demand for labor. Eliminating public assistance to people who do not meet statutorily imposed work requirements is a punitive solution to problems on the labor supply side of the poverty equation.  It’s a way of incentivizing work, not of producing jobs beneficiaries can actually do.

            According to Bradley and Doar, TANF was wildly successful in moving people from welfare to work.  Figure 1, a chart prepared by the Congressional Research Service, shows why they think that the work requirements in TANF reduced unemployment and thus why all public assistance programs should emulate it.

Figure 1

            Figure 1 shows the number of families receiving “welfare” from 1959 until 2014.  That number peaks at around 5.1 million families in 1994 and then fell sharply until 1999 when the U.S. experienced a relatively brief recession.  After 1999, the number of welfare families continued to decline, but at a much slower pace.

            TANF replaced “welfare as we know it” in 1996, and it wasn’t fully implemented until 1998.  But, as Figure 1 shows, the sharp decline in families receiving cash assistance under the TANF program actually began in 1994, at least two years before TANF’s work requirements could have produced any effects.  And the steep downward trajectory of the line didn’t resume after the recessions, despite the fact that the TANF law required the federal government to begin penalizing any state that failed to continue making progress in moving TANF recipients off public assistance rolls and into work or work preparatory activities.

            Doar and Bradley see in Figure 1 what they want to see.  They assume that the big decline in the number of welfare families is the result of TANF simply because it occurs after TANF's work requirements were adopted.  That’s an example of  a logical fallacy known as post hoc ergo propter hoc ("after this, therefore because of this").

            Participation in TANF is sensitive to a number of factors.  Economist Jeffrey Grogger, for example noted that the overall level of participation depends not just on how many people leave the welfare rolls, but also on the number of people who sign up for it at any one time.  In an interesting research paper, Grogger shows that about half of the decline in the level of TANF participation flows from a reduction in the number of people who applied for it.  Grogger says that this reduction had far more to do with the availability of the Earned Income Tax Credit and the general improvement of the labor market that took place between 1994 and 2000.

            I don’t think that anyone disagrees with Strain when he identifies work as crucial to individual flourishing.  I also don’t think that anyone would disagree with the proposition that even if work weren’t important for individual flourishing, society is better off when people are engaged in economically self-sustaining labor rather than dependent on others.  That’s why I agree with Strain’s argument that “public policy . . . is properly interested in helping to create a vibrant labor market.”

            But, if we’re going to use public policy for this purpose, we ought to use the kinds of policies best suited to accomplish our objective as well as metrics that tell us whether we have succeeded.   Having fewer people receiving public assistance isn't the same thing as having more people gainfully employed.  To reduce poverty (and move people “from welfare to work”), we’re probably far better off investing in education and training as well as in jolting the economy with federal spending on appropriate projects than we are in threatening people with starvation or homelessness for their failure to pursue pointless activities that lead to non-existent jobs.

Why Republicans Warm To Donald Trump

          

   While Donald Trump has directed much of his vitriol at Muslims and Hispanics since he became a candidate for the Republican presidential nomination last summer, he hasn’t said much about African-Americans. 

            Aside from an awkward moment at a rally in Redding, California in which he pointed out a single African-American in the crowd, Trump has been rather subdued on the subject of relations between blacks and whites.  He spoke approvingly when a crowd of his supporters “roughed up” a “”Black Lives Matter” activist at one of his rallies, but his comments were more focused on the fact that the activist was disrupting the rally, not on race relations in general or on the “Black Lives Matter” movement in particular.

            In February, The Huffington Post posted an article purporting to give 10 examples of racist behavior on the part of Mr. Trump.  While it includes Mr. Trump’s infamous inquiry into whether President Obama was born in the United States and his failure to disavow, in a forthright way, the support he is receiving from white supremacist groups, most of the examples involve clearly racist things said or done by others on his behalf.   The article also includes his notorious comments about Muslims and Latinos.

            In fact, though African-American commentator Tavis Smiley has called Mr. Trump a “religious and racial arsonist,” he’s also noted that Mr. Trump has a large number of elite African-American friends who seem genuinely to like him.  And, given tensions between blacks and Hispanics over competition for low wage jobs, conversations with average African-American voters have lead Smiley to believe that blacks don’t think anything Mr. Trump has said or done is “necessarily or automatically disqualifying.”

            On the other hand, Mr. Trump has publically disagreed with comments the late Justice Antonin Scalia made about African-Americans during oral arguments in an important affirmative action case . Scalia, Trump said, was “very tough to the African-American community.”

            That’s why new data from the American National Election Study is so interesting.  Completed by 1200 adults in late January, it included a battery of questions designed to measure what political scientists call “racial resentment.”  Racial resentment or “symbolic racism” are “racist attitudes that are expressed in a way that is seemingly neutral, but still animates racial anger.” The concept is helpful in measuring racism, particularly because it has become unacceptable or “politically incorrect” to express opinions that are outwardly hostile toward members of various racial groups.

            One of the questions in the battery, for example, asks people to agree or disagree with the following statement:

It’s really a matter of some people not trying hard enough; if black people would only try harder they could be just as well off as whites.

Agreeing with statements like these leads to high scores on a scale of racial resentment that runs from 0 to 100.  High scores on the scale indicate high levels of racial resentment.

            I used the scale to predict the level of warmth respondents felt toward Mr. Trump and several other presidential candidates, measured by “feeling thermometer” questions also included in the survey.  After controlling for race, educational attainment, gender, family income and “born again” status, I found that levels of racial resentment influenced how warmly Republicans felt about eight of the candidates campaigning for their parties’ respective presidential nominations.

            As Figure 1 shows, racial resentment had the largest effect, among

Figure 1

Republicans, on feelings of warmth toward Donald Trump.  For every 10 point increase on the racial resentment scale, Republican respondents feelings of warmth toward Donald Trump’s increased by almost 7 points as measured on the 100 point feeling thermometer.  Ted Cruz was the only other Republican presidential candidate who benefited from increasing racial resentment.  For him, that increase was half of what it was for Donald Trump.

            Racial resentment didn’t affect levels of warmth felt for Marco Rubio, Ben Carson or Carly Fiorina in any statistically significant way.  And for Jeb Bush, increasing racial resentment led to the same kind of effect—a reduction in warm feelings--as it did for Hillary Clinton and Bernie Sanders.

            For the sake of comparison, I also calculated the extent to which resentment of political correctness—one of Mr. Trump’s key campaign themes—affected warm feelings among Republicans toward him and to the other 7 presidential candidates.  Republicans who thought Americans had become too politically correct didn’t feel any differently about Donald Trump than Republicans who felt that current levels of political correctness were more or less appropriate. 

            For Republicans who object to current levels of political correctness, the largest statistically significant effect was to increase feelings of warmth for Ted Cruz by 20 points and Carly Fiorina by 30 points.  Those same feelings about political correctness decreased any warmth Republicans felt toward Hillary Clinton by over 20 points.

            There are two takeaways from this analysis of the ANES data.  The first is that race continues to be an animating factor in Republican politics, even if the front-running candidate has not made a campaign issue of it the way that, say, George Wallace did in the 1960s.  Some Republican voters apparently hear, in Trump’s call to “make America great again,” a chance to return to a time when whites were dominant and people of color “knew their place.”

            The second is that there are clear lines of cleavage in the Republican coalition on the issue of race that may be subsumed in the more general cultural conservatism espoused by politicians such as Ted Cruz.  It may be that racial and social conservatives—voters supporting Donald Trump and Ted Cruz—are beginning to part ways with the socially and racially tolerant Republican voters who are more interested in economic and national defense policy.  This parting of the ways may be the precursor of a new and viable center right American political party capable of attracting some of the voters the Republican party currently repels.