Strangely, diapers show us why America needs a basic income.
Incredibly, America’s welfare programs do not pay for diapers. For example, the Supplemental Nutrition Assistance Program (SNAP); popularly known as food stamps, only pays for food.
In fact, U.S. Representatives Barbara Lee (D-California) and Rosa DeLauro (D-Connecticut) introduced an End Diaper Need Act to Congress in March 2019. They designed the Act to pay for diapers for poor families.
The diaper dilemma shows everything wrong with our welfare state. Congress just noticed that babies need to diapers last year. Yet people have been putting diapers on babies for centuries.
The Diaper Dilemma
Diapers are a problem for the poor; because it costs between $70 and $80 a month to buy disposable babies for a baby, The National Diaper Network reports. Thus, it costs between $840 and $960 a year to buy disposable diapers for a child.
Diapers can be a huge burden on the poor and working class. For instance, the average lower class household income in America was $25,624 a year in 2016, Investopedia reports.
Poor families that lack a car to drive to Costco (NYSE: COST); or the money for an Amazon Prime subscription, could pay more for diapers. To explain, lack of transportation could force those families to shop at convenience stores; or low-end discounters such as Dollar General (NYSE: DG), where prices are higher and choices are few.
The diaper dilemma is a bigger problem than most people realize. For instance, the National Diaper Network estimates one in three U.S. families experience diaper need.”
The Diaper Dilemma Shows What’s Wrong with American Welfare
The diaper dilemma exposes everything with America’s bureaucratic welfare system.
The logical solution to the Diaper Dilemma is to give poor women the cash to buy diapers. Unfortunately, that option is not available because it creates no jobs for bureaucrats, lobbyists, and politicians.
Instead, we use means-tested welfare benefits. Means testing is a jobs program for people with social services degree. To explain, in means testing the state pays bureaucrats a salary to check if the poor are working or searching for work.
Additionally, the current system requires lobbying and Congressional action to create a small federal subsidy for diapers. That creates jobs for lobbyists. Astoundingly, there is a Diaper Lobby; the National Diaper Network.
Moreover, offering a solution for the Diaper Dilemma makes Congresswomen DeLauro and Lee look like heroes to progressive voters. Sadly, supposedly pro family Republicans oppose the End Diaper Need Act.
Is a Basic Income the Solution?
Diapers are just one of many needs that real families in the real world have that bureaucrats and politicians do not know about.
The social services solution that problem is to conduct research and studies; which creates jobs for social scientists. The political solution is to set up a welfare benefit politicians have to amend.
That gives members of Congress the ability to send out press releases telling voters and donors about the wonderful things they are doing. Worse, it gives self-proclaimed “conservatives” the opportunity to eliminate or cut benefits for the poor or redirect the money to their pet programs.
The logical solution to this problem is to give the poor cash and let them pay for their own needs. I think most poor people are smart enough to know what their families need. For example, people are smart enough to realize their children need diapers.
Cash solves the Diaper Dilemma
We can distribute cash to the poor with a simple electronic payments platform that puts few bureaucrats to work.
Most poor Americans have bank accounts, or payment solutions such as PayPal. In addition, the government can mail a payment card to every poor family. Thus we can send cash to the poor without a bureaucracy.
Importantly, the cash could meet the poor’s actual needs. For example, a poor man could use the cash for parts to fix his car so he could drive to a job. Or the poor man could pay his neighbor for a ride to work.
Thus, giving the poor cash could increase the number of poor people who are working. In addition, the cash could help those poor families who cannot work.
For example, a man who has to quit work to care for his elderly mother with dementia. That man could spend the cash for food and rent or pay for home health care.
Andrew Yang has a Solution to the Diaper Dilemma
There is a presidential candidate who is offering a solution to the diaper dilemma. That candidate is Andrew Yang (D-New York) whose signature issue is the Freedom Dividend.
The Freedom Dividend is a $1,000 a month basic income that Yang wants to pay to all Americans over 18. Under Yang’s Freedom Dividend, the government will send each American adult $1,000 in cash a month. Thus the Freedom Dividend could buy a lot of diapers.
I think there are some problems with the Freedom Dividend. In particular, Yang plans to subtract SNAP and other welfare benefits from the Dividend. Conversely, Yang will pay the Freedom Dividend to people on Social Security. I think that practice is wrong, discriminatory, and unfair to the poor.
Additionally, I think not paying families a Freedom Dividend for children is wrong. Children; as all parents know, are expensive, but they cannot which can impoverish families. Hence, Yang’s proposal discriminates against families with children.
Why the Freedom Dividend is better than Welfare
However, Yang’s proposal is far better than our current system. In particular, I think the Freedom Dividend could be more politically viable than the current American Welfare system.
To explain, poor people on programs such as SNAP are less apt to vote. Hence, politicians are likely to cut and attack such programs. Meanwhile, the same politicians are afraid to touch Social Security; because it benefits middle class people who are more likely to vote.
In fact, members of the supposedly anti-Welfare Tea Party love Social Security, The New York Times’ Bryce Covert claims. Social Security is incredibly popular because it pays cash to everybody who is eligible.
Given those realities, politicians will be afraid to cut a Freedom Dividend they pay to the middle class. Yes, the Freedom Dividend will benefit middle-class families but it will also help the poor.
Hence, we could have a cash benefit for the poor that politicians and bureaucrats are afraid to touch. However, that benefit will also go to the middle-class and senior citizens on Social Security.
Furthermore, we could reform Yang’s Freedom Dividend later on to cover kids and welfare recipients. Thus, the Freedom Dividend is the best solution being proposed to problems such as the Diaper Dilemma.
Why the Poor Hate Bureaucrats
In contrast, other progressive proposals such as subsidized jobs, the Jobs Guarantee, and increased unionization will not help most poor families. Interestingly, I think programs such as subsidized jobs could increase poverty.
To elaborate, poor people fearing bureaucrats could run their lives will avoid such programs. A poor mother; for example, could fear being forced into a menial job and having her kids placed in a substandard government-funded daycare program.
Hence, that mother will avoid all contact with social workers and chose the food bank over welfare. Frighteningly, such fears are realistic in modern America. The state of Arkansas; for instance, requires Medicaid recipients to work, attend school, or “volunteer,” NPR claims.
The Diaper Dilemma offers a glimpse of the nightmare known as American Poverty. The Freedom Dividend is a potential solution for that nightmare.
Originally published at https://marketmadhouse.com on January 5, 2020.