Why Aren’t Benefits Pacing Inflation?

One of the great myths about government benefits is that they are periodically adjusted for inflation. There’s even a nice acronym for it: COLA, the cost of living allowance. The idea is that anyone on government benefits should be getting enough money, so if people are struggling, it is obviously because they are doing something wrong, not because of any fault on the part of the government. This allows people to disavow all responsibility when they see people not getting by on government benefits, because they can call ‘personal responsibility’ and decide to ignore it.

Well, benefits do not keep pace with inflation. Indeed, all of the structures that supposedly respond to inflation and economic shifts, from the standardized deduction designed to ensure that people below the poverty level are not forced to pay taxes on their income to the minimum wage, are lagging woefully behind the actual cost of living, as well as inflation. It is my personal belief that this is a major contributor to the increasing gap between rich and poor in this country.

One issue is that the cost of living varies across the United States. Benefits in Montana go further than they do in California. That’s why individual states have their own COLAs, designed to compensate for this. So, why aren’t the COLAs keeping pace with inflation? Why isn’t the minimum wage a living wage? Why are we pretending that government benefits are enough, when they are clearly not?

As people are being kicked off the benefits rolls in scores, thanks to the government’s adamant refusal to provide assistance to citizens while freely handing out money to corporations, we are starting to face a real crisis in this country. Ignoring it is clearly not the solution. Poor people don’t go away if you don’t pay attention to them and the creation of a culture where we believe that benefits are adequate and scream bloody murder when people don’t spend their benefits the way we want them to allows us to thrust all responsibility on to people who are getting benefits, instead of ourselves.

The benefits system is fundamentally flawed in a lot of ways. I’ve heard people argue that keeping benefits low acts as an incentive to find work. No, it does not. What it does is get people kicked out of their homes, behind on their utilities, unable to buy food for their children. What it does is ruin credit scores, ensuring that people can’t access even exploitative loans to pay for basic needs. What it does is keep people in a state of enforced poverty. The idea that not getting enough will make people find work is predicated on the belief that people who are receiving benefits are not looking for work.

Which is ludicrous. Even a casual inspection of conditions in this country right now will illustrate that the unemployment rate is soaring, that competition for jobs is ferocious, and even people with impeccable and detailed qualifications can’t find work. Not because they are not looking for it, not because they are being choosy about where they work, not because they aren’t trying, but because work is simply not available. That is what happens when the economy slumps, is that jobs go away. If people were jobless and looking before, why would you think that it would be any better now?

The benefits system also penalises people who find work that won’t support them. You’re offered a choice. You can stay on the benefits that do not provide enough money to live, while retaining eligibility for supportive programs like food stamps and health care, or you can go off benefits, and plunge into a job that doesn’t provide enough. You cannot have both. This is a recurrent issue with disability benefits in particular that people have been protesting for decades. Rather than creating a hybrid system that offers some support to people who need it while they settle into work and build careers, we just cut people off. When you’re cut off, you get desperate, you struggle at work, you may lose your job, and then you are right back on benefits.

People act like people who get benefits are lolling around living on the fat of the land, eagerly putting their hands out for their benefits checks. This is simply not the case. People on benefits are stressed out, miserable, and unhappy because the benefits are not enough. They are behind on their rent. They are choosing between feeding themselves and feeding their children. They are ignoring medical problems they cannot afford to treat. They are on the streets, they are in shelters, they are bouncing from place to place trying to get a foot in the door and a leg up.

If benefits were really keeping pace with inflation, if all of these government programs that are supposed to match cost of living were doing what they were supposed to be, people wouldn’t be struggling so hard. A minimum wage job wouldn’t be a sentence of remaining eternally behind and becoming increasingly in debt. Getting benefits would be a chance to get on your feet while being supported. The introduction of programs that would allow people to work without jeopardizing benefits would encourage people to seek work, because there’s an incentive to do so; they won’t be punished for getting jobs.

Is the government actually going to do any of this? It seems unlikely, given the way that policy wonks seem to think these days, and that really disappoints me. It disappoints me as a person who does not like to see other human beings suffering, and it disappoints me as a taxpayer, because right now I feel like my taxes are being applied highly inefficiently, and that makes me grumpy, because I don’t like to see wasted money. If the government isn’t going to use my money effectively, I’d rather keep it myself and put it to work in my own community.