Guess Who Wants to Write Government Checks to Poor People?

Faced with growing income inequality, conservatives promote an unexpected solution.

Photo |

Photo |

Good news! After more than a generation of the rich getting richer while the poor and middle class have been left behind, conservatives are starting to wake up to the fact that there’s growing income inequality in America — and that it’s a bad thing.

You’ll never guess, though, how some conservatives want to solve the problem: By getting the government to start writing checks to subsidize the wages of America’s poorest workers.


Here’s economist Noah Smith, talking about the idea recently in an interview with the American Enterprise Institute, a market-oriented think tank:

We would be putting our thumb on the scales between humans and robots to keep humans in work that in a perfectly free market they wouldn’t be doing. When a company offers you wage, the government matching would have already [been] done behind the scenes. Someone comes and offers to pay me $20 an hour, the government is paying $12 of that. I would be making $8 an hour, but I would feel like a person who making $20 an hour.

Now, this isn’t straight-out welfare — workers would still be working — but it’s more than a little bewildering coming from the right. For one thing, the proposal implicitly acknowledges that the free market has some shortcomings that won’t fix themselves. It also allows for the possibility that poor people aren’t moral failures, no matter what the Ayn Rand acolytes on the right believe.

What’s more, the scheme amounts to a good old-fashioned redistribution of wealth, taking money from those who have plenty and giving it to those who need more — and, well, Tea Party conservatives have been pretty plain what they think about redistribution: It’s socialism, and they don’t like socialism.

But the proposal — known, in some permutations, as a “negative income tax” — has kind of a long history on the right. There have been few advocates of the free market more ardent (and more worshipped by Reaganite Republicans) than Milton Friedman, but he actually came up with the plan decades ago. And in recent months, some smart guys on the right have come to quietly embrace the idea anew. The proposal, after all, rewards work. Better than paying somebody to stay home and watch TV, right?

The question remains, though: Why now? Why do (some) conservatives suddenly care about income inequality?

My guess: Part of it is that Barack Obama is president, and acknowledging the problem now allows Republicans to lay it at the feet of a Democrat, no matter how long the issue has been festering. A second possibility? There’s growing evidence that income inequality gets to be a drag on the economy, which eventually affects even the rich. Sometimes the problem is too big to ignore.

So for liberals, what’s not to like?

Well, one danger is that we’re in for a “yoink” moment. Remember, it was Republicans and their think tanks that originally proposed health insurance mandates as an alternative to government-provided universal health care — the plan became tyrannical socialism just as soon as a Democrat tried to implement it. Writing checks to poor people so they’ll be less poor is a lot closer to actual socialism; what’s the likelihood the local Tea Party congressman would stick his neck out for this kind of scheme?

The other problem is that while labor costs would be socialized, actual profits would remain privatized. One reason (some) conservatives like this proposal is that it takes an increased minimum wage off the table; instead of paying workers what they need to survive, taxpayers would do it. Companies like McDonald’s, though, would still keep their profits.

In an era where fast-food jobs are almost all that’s left, though, taxpayers are already subsidizing McDonald’s and its ilk. Perhaps it’s better to formalize the process instead of letting Americans suffer through the current ad hoc process. For most of us, though, the sight of conservatives advocating taxpayer money for the poor is something remarkable to behold.

Follow @JoelMMathis on Twitter.