TEN IDEAS: Incentivize People to Abandon Government Assistance
Here is one of the most bothersome statistics about our economy: The bottom three-fifths of income earners all share about the same standard of living.
Why is that bothersome? Because most people in this category are scraping along to achieve this quality of life, working multiple jobs and taking overtime shifts. On the other hand, others are resting back, not maximizing their potential, and allowing government to pick up the slack.
I don’t blame the latter category of folks. I blame the system.
The system gives no incentive to move from one group to the other. Why work two jobs or take overtime shifts, when you can receive the same standard of living without doing so? Why go the extra mile to contribute to the economy if you lose a dollar of benefits for every dollar of income? It’s a perverse incentive that needs cured.
I have a cure.
My fifth policy idea is to invest a portion of the government benefits that a person gives up by working extra jobs/hours into a 401(k) retirement account for the benefit of that person. This would be a limited-time benefit, which can only be exercised once, which can be forfeited if the person later decides not to work (without good reason), and which is gradually reduced as time passes. But the amount involved will be a significant motivator (consider, as one example, someone who leaves Medicaid after accepting a job that provides healthcare benefits).
If this plan is adopted, we have mostly eliminated the perverse incentive to not work. If adopted, we have activated a not-insignificant swath of new workers. If adopted, we have provided a person, who otherwise likely would not have retirement savings, with a nice start to a retirement account. If adopted, we have taken a bite out of the vicious cycle of generational poverty. If adopted, we will ultimately reduce government entitlement spending.
This is one of many ideas I have to eliminate generational poverty, which I see as the biggest lasting problem facing our nation and state. This is an issue I feel very passionately about, and I think we can get broad bipartisan support for.