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Comment by blowski | Hacker News Reader

> When you are poor in Germany you can drastically improve your cash flow by not living in one of the expensive cities. Living out in the country in a small village will enable you to stretch your welfare checks compared to living in Munich, where most things and most people around you are much more

You're right, but that's the start of welfare dependency. If you have kids, you probably kill their life chances as well. I'm talking of the UK, rather than Germany, but I imagine the same is true anywhere in the rich world.

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IMO "welfare dependency" is by and large a myth. The vast majority of people want to work, want to make money, want to be self-sufficient, and want to participate meaningfully in society. A few people I know who are arguably dependent on government provided benefits (in the US) are that way because they're physically ill, have inadequate or no access to health care, and literally cannot work as a result. The others are full-time employees who work 40 hours a week but are paid wages that can't possibly support their family's existence.

I didn't mean to imply that people who are 'welfare dependent' are workshy layabouts, far from it. I meant it in the 'non-pejorative' sense of "somebody who is dependent on welfare for a majority of their income for a significant period of time". That might be because of illness, or some other reason - I make no judgement.

So, going back to the original comment, moving to a small village to make your benefits go further makes it harder to find a job. Thus, you remain on welfare for a longer period of time. On the other hand, if you stay in the city, you're more likely to get a job, but it's also harder to eat and find good accommodation.

So these things are difficult. It is clearly a big social problem that people have to face these kinds of difficulties.

Agreed but when you have a generous system sometimes it's just easier to stay on benefits and putting off developing career etc. Of course we should help people who cannot be self sufficient. Those who can should be given very clear incentives (and prodding) to join the workforce.

The disincentive to work has more to do with the welfare trap that removes benefits quicker than they are replaced with income. That can happen with any level of generosity in benefits.

Yeah I can illustrate a personal example. I lived with my dad who'd been ill for years and on welfare. His income was supplemented to about 950 euros or so a month, however, if I had a part-time job making 350 euros, he'd only receive 600, because the household income was 950.

So here I am, a poor student paying my own way through college with no support from my parents, working part-time and going into debt, and they slam this on me. So I was forced to financially support my parents because there's no way to pay rent, food, insurance etc on 650 bucks. After many calls it turns out there was no solution, the -benefits was 1:1 with the +income I was earning.

This created an incentive for me to stop working. If I earned 100, my dad got 100 less, if I earned 600 my dad got 600 less. It'd only make sense for me to work if I quit college and got a job that paid more than he'd get in benefits, such that if I made 1k a month, my dad would get 0, I'd give him 950, and keep 50 bucks a month for working full-time at minimum wage.

So I stopped working and started desperately looking to move out (so that my income was no part of the 'household' income of my dad's place). Eventually did, got a job again and finished uni.

Anyway it's just one of many bad policy planning examples that look sensible in general... which is, if you're working, you don't need benefits anymore. And if you're living with people who are making all kinds of money, there's no need to depend on the state anymore, so they're counted as part of your income that the benefit requirements are tested against.

Then there's indeed examples where benefits are replaced quicker than income. Worse than 1:1. Like when you make 900 bucks, you get an exemption from a municipality tax of 150. But if you make 901, you pass the threshold, such that your effective income dropped to 751 by earning 1 euro extra, which puts you in a nasty situation in a country where rent, insurance puts you at 750 already and there's nothing left for food, culture or connectivity.

This also creates a really, really strong incentive to look for a job that pays you under the table.

Each unreported euro earned is effectively worth two euros (the euro earned plus the euro lost to clawbacks) in addition to any unpaid taxes.

Not the kind of incentives a rational policy maker should strive for exactly.

Why didn't you take Bafög?

This is just an example of welfare policy issues in general, when edge cases creep up that cause all kinds of problems. It's not a German example however, never lived there.

I did receive cheap student loans by the way, but I don't want rack up lots of debt so I liked to work part-time where I could. And even with loans covering tuition fees, for the two of us to live on 950 euros a month (or even 3 when my brother lived with us) is not a great deal even if I didn't have any college costs, or had all of them covered by a state program.

I don't know about IkmoIkmo, but I think there are some cases where it's hard to get for some silly reasons.

> That can happen with any level of generosity in benefits.

Yes, the effective marginal tax rate is important here. (And another argument in favour of giving anyone a universal basic income, and just using the normal tax system to claw back benefits from people who earn enough.)

An even better system is to just tax land. There are no disincentives with that at all: the supply is fixed.

Definitely agree, and that is part of my point. Under many welfare states, you're worse off (utility and something monetary-wise) after you try to enter the labor market, since you're suddenly working 40 hours a week for almost the same amount of money you got for working 0 hours a week.

One of the major problems I see is that people are generally bad at distinguishing "can't" from "won't". Things like major depression (which, for anyone unfortunate enough to experience it, feels as physical as being chronically poisoned) have a way of turning in to "you're just being lazy".

I agree mental health issues like depression are disabilities that can prevent one from keeping down a job. We should support and treat people with depression as a society.

But I think at least for mild depression, living off welfare and not having a job can make things worse and spiral into major depression.

From personal experience living in Scandinavia, anxiety and depression are known as easy reasons to get on disability pay and stop working. Of course these are real issues in many cases. But there are people who don't suffer from them and use them as an excuse to get government pay.

Provided a doctor was required to certify that the health condition existed and was disabling, I'd consider myself unqualified to second-guess the existence of a diagnosed health condition. I'd be interested in data over anecdotes – everyone seems to have the latter.

This assumes there is a workforce with openings to join. That is becoming an increasingly more difficult problem for many people. It also assumes that it is good for everyone to join the workforce—which itself intrinsically ignores reality, in which there are simply not enough jobs available to reach 100% employment.

There is an odd mental hang up, especially in the US, that invariably and automatically views people who receive social benefits in a viscerally negative light, demonizing them in the public sphere and consciousness. This is, to me, an odd choice versus choosing to recognize as a social positive that there are benefits that can be designed and operated correctly to ensure we do not allow people to fall below a minimum living standard.

If we want to realize a society in which every able-bodied member is employed in the workforce, I do not believe we can do so without significantly altering the expectation of full-time employment as a standard. I also seriously doubt we can achieve full employment without realigning the world of business and work toward achieving social incentives first, instead of profit incentives.

You need high labor force participation to make a system that can support a strong welfare state. Scandinavian countries have arguably the best welfare states in the world, but they also have the highest labor force participation rates in the world. Indeed their benefits like maternity leave help increase the rate, but I don't think they could support their strong welfare programs with less people working.

Have a look at New Zealand. The current government is slashing the welfare system yet several key figures (no pun intended - PM is called Key) grew up in state housing in a welfare state. They benefitted from the system and have risen to the top of it.

Sounds like the Australian government's ongoing siege of the tertiary education system, when they were the last group to enjoy a fully state funded university education.

Damn hypocrites.

The current NZ government is not slashing the welfare system.

I call BS - they're not keeping up with real inflation (rents in particular are going up far faster than nominal inflation), people are living in cars because Key's people are pandering to those who are raking it in from the property bubble rather than looking aftyer those who really need help

The current government took office in 2008. The following numbers are NZ Government fiscal spend on Social Security and Welfare in $NZmillion for each financial year starting two years before the present government took office. Source http://www.treasury.govt.nz/government/data

  2006  16,212 
  2007  17,266 
  2008  18,420 
  2009  19,844 
  2010  21,142 
  2011  22,029 
  2012  22,148 
  2013  22,737 
  2014  23,308 
  2015  23,881

Budget 2016 schedules a further modest increase in this spend. All in an environment of historically low inflation. This is entirely consistent with the nature of this government which is characterised by a steady-as-she-goes approach, with tweaks and priority adjustments much more the order of the day than dramatic policy changes.

You do not get to call steady, modest increases in real expenditure "slashing the welfare system". Sure we have a housing problem. You could make an argument that the government should be taking drastic action to address that problem, but you cannot argue that failure to take any such drastic action is the same thing as "slashing the welfare system"!

And you absolutely do not get to "call BS" when someone points out a simple statement of fact.

They are shifting people off benefits and cutting their entitlements whilst deriding beneficiaries at every opportunity. State housing is being sold off (or they are attempting too, but judging by Friday's news that they have botched it, it isn't easy to find a buyer) and much is sitting empty. Welfare recipients do not receive enough to cover living costs, and payments have not kept up with inflation at any stretch. A welfare recipient is vastly worse off now than 10 years ago. I can't tell from those figures (on mobile and the linked site behaves badly) but do they include state pensions? Also, are you sure they are right? The figures are in millions?

America too.

Paul Ryan, who never met a welfare program he didn't want to cut, received social security payments after his father died at age 16.

What a preposterous argument, that having ever received government handouts somehow disqualifies you from thinking the programs are a bad idea.

I pay plenty of money in taxes. You can bet that if I ever qualify for handouts, I'll be cashing them. You would be stupid not to.

I'm in general anti benefits myself, but I think the payments received by a minor on death of a parent are one of the most fair, and best investment for society. They're pretty hard to game (you'd have to kill your own parent to get that money) and they prevent a child from slipping into desperate poverty and crime.

I wasn't commenting on the specifics, just on the general line of attack. I'm inclined to agree with you.

So your motto is "Fuck you. Got mine." right? Should get a bumpersticker printed up!

Okay, from now on anyone who uses Facebook can't criticize Facebook. Same with Spotify, Twitter, and Apple products. Not one peep! Come to think about it, that would stop a lot of the whining around here so maybe it'd be a good thing.

Further, any advocates for higher tax rates should immediately begin to voluntarily pay the higher tax rates that they advocate for. You are allowed to donate extra money in taxes to the government if you'd please. So I demand that people put their money where their mouth is.

And while we're at it, I'm sick of these affirmative action advocates at elite universities who always want to give up other people's spots. All affirmative action advocates should immediately give up their positions at elite colleges and well-regarded employers, to make space for less-privileged people.

Can you see how this is not a reasonable line of argument?

“Move somewhere less expensive” (= rural) is terrible advice, and I’m not sure how it gets bandied about so much.

Ignoring the often prohibitive costs of moving itself and possibly needing to buy a car for local transport, for example, the last thing an unemployed person needs to do is move away from the available jobs.

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