Sometimes I see people who refuse to use coupons in stores because they think it's beneath them (even if the coupon is right in front of them in a display for what they are buying).
Then there is the craziness that you are immediately ineligible for foodstamps the very day you get a job, regardless if you do not get a paycheck for a couple more weeks.
I realize the need to prevent fraud but there has to be some kind of balance to allowing someone in a bad situation to keep a little dignity.
Then there is the craziness that you can buy things like candy with foodstamps but not vitamins.
On the contrary, that would be counterproductive.
At low levels of income, there is virtually no relationship between earnings and consumption. So if a person's utility function is proportional to consumption, with a slight disutility for working, they will choose not to work.
This happens in the US up to the $30k/year level - i.e., a person earning $0k/year and a person earning $30k/year will consume roughly the same amount of goods and services.
http://crazybear.posterous.com/why-the-poor-dont-work
However, if you make receiving food stamps/welfare/etc unpleasant (i.e., more unpleasant than actually having a job), you would encourage some people to work for a living instead.
The modern welfare system does not allow non-disabled people to draw an infinite amount of assistance - it's very restricted and for a finite amount of time. They must constantly show real proof they are looking for work and even with part-time jobs their assistance is immediately scaled back.
Assistance shouldn't be a punishment, it should be care and kindness while someone gets back on their feet. You aren't going to make assistance less attractive than a minimum wage job, it's impossible.
They must constantly show real proof they are looking for work and even with part-time jobs their assistance is immediately scaled back.
This is simply false. The vast majority of the poor are not looking for work, nor are they working. Nevertheless, they consume an average of $30k/year.
Did you even bother to read my link?
You aren't going to make assistance less attractive than a minimum wage job, it's impossible.
It's hardly impossible, but I agree that a lack of dignity is probably insufficient to push more than a few people over the threshold. That doesn't mean we should skew the incentives even more toward couch surfing and away from work than we already do.
Furthermore, it is likely that in many cases the very poor don't work because they are unable to -- mental illness is a commonly cited factor, but these days it's hard for anyone to get work -- particularly those lacking high school degrees, for instance. If someone cannot work for such a reason, then by attempting to punish them for not working you simply reduce their already-slim ability to contribute to society.
Edit: removed rudeness
In reality, humans rich and poor alike have many considerations of equal or greater importance than their utility function. For example, people not work full-time because they are in school, because they are practicing an art or craft, because they are taking care of family, because they have a wealthy benefactor, because they are employed in an illegal trade like drugs or prostitution, or because they are trying to break into a difficult industry like film.
If you wish to claim that the poor disproportionately prefer to gain other things than wealth (e.g., they prefer hobbies/long shots over work which might earn them $0-30k), you are agreeing with me.
We also seem to agree that "a lack of dignity [or other minor disincentive] is probably insufficient to push more than a few people over the threshold [towards work]" (as I said a few posts up).
I'm always glad when I can convince others (including others with whom I share different values) of the correctness of my pet hypothesis. It suggests I'm on the right track.
Also, don't forget that Clinton ended welfare as we know it, resulting in fixed periods of welfare anyway. It also resulted in some evils, like single mothers working 6 hours a day (with their kids in a daycare) making less money and spending less time raising their children.
I think the final line (heavily edited) "it is rational not to work as long as work opportunities pay less than $30k/year" is what we should focus on: let's try to make their work opportunities better through extra services (maybe mandatory without a waiver of disability or insanity) that give training and education.
I believe that instead of making poverty "unpleasant", we should structure the reward system so that it drives the poor towards self-reliance using positive rewards. For example: right now, if a mother is not working, she gets support for childcare. But the moment she starts working, her support dries up, so it becomes an economic disincentive to find work. So the rewards should be graded in such a manner that they don't disappear; it should be a continuous function, whose gradient points to self-reliance. So for the same single mother in my example, for every dollar she earns, her childcare benefit would go down by, say, 10 cents. She would still get 90% of the benefit of her labor.
I'm sure if we put our minds to it, we can come up with a system that works.
Unfortunately, a lot of the current stakeholders (in addressing these issues) have a lot to gain by maintaining the status quo; they'd be out of a job if there was no poverty....