There is a ‘secret’ about welfare that almost everyone who has spent time receiving Ontario Works understands. ODSP recipients too, know it well.
It is not a secret because anyone is deliberately concealing it. It is a secret because the people who know it rarely get to design the system, explain it to the public, or frame the political debate.
The secret is remarkably simple:
Many of the actions we tell people on welfare they should undertake to become independent are the very things the welfare system penalizes them for doing.
Get a job. Get some training. Accept help from your family. Find someone to share the rent. Save some money so the next emergency doesn’t become a catastrophe.
These are not radical ideas. They are the standard Canadian prescription for getting ahead.
But try doing them while receiving welfare.
There is an important distinction between what low-income people know and what the rest of us think they know.
The less-famous lesson associated with the work of psychologists David Dunning and Justin Kruger is useful here. We tend to assume that other people possess knowledge and abilities that come easily to most of us.
People who deal comfortably with forms, percentages, tax returns, government websites and bureaucratic language can easily underestimate how much knowledge those things require.
Curiously, we make the opposite mistake about welfare recipients themselves.
On the political right, we sometimes imagine that welfare recipients know every rule and loophole and expertly manipulate them.
On the left, we sometimes romanticize poverty: people with very little money must therefore be extraordinarily sophisticated shoppers, budgeters and navigators of government programs.
Neither assumption is particularly helpful.
Someone can live within the welfare system for years without understanding its regulations.
But there is something recipients understand extremely well.
They do understand what happens to them.
For 13 years, I convened quarterly, day-long sessions with Ontario Works recipients, along with some people receiving ODSP. There were 56 sessions altogether.
We talked about everything people needed to know simply to contemplate navigating the system: benefits, earnings, assets, housing, relationships, employment, savings, reporting and the innumerable interactions among them.
And the latter sessions began with what I called the secret.
I would put the ordinary Canadian recipe for independence on the table:
Get a job.
Get training or education.
Get some help from your family.
Share accommodation to reduce your expenses.
Build up some savings for emergencies.
Then came the revelation. Every one of those perfectly sensible behaviours can collide with welfare rules.
Earn money and benefits can be reduced. Receive money from family and you have to worry about gift rules and reporting requirements. Share accommodation and questions arise about household arrangements and relationships. Accumulate money and asset rules begin to become relevant. Change your circumstances and another reporting obligation appears.
None of this means recipients should not work, study, save or cooperate with family and friends.
It means that the road toward independence is not a smooth ramp out of welfare. It is an obstacle course.
At some point you have to make the leap: become sufficiently secure outside the system that you can afford to lose the protections inside it.
And the people furthest from that point face the greatest difficulty making the leap.
This helps explain something that policymakers often interpret incorrectly.
People receiving welfare frequently distrust government programs intended to help them.
We tend to diagnose this as a communications problem.
They don’t understand the program.
We need clearer information.
We need better outreach.
Sometimes we do. But suppose their distrust is rational.
Imagine an institution repeatedly telling you to behave in ways that it then penalizes.
We say: Work.
The system says: Report those earnings so we can recalculate your benefits starting at 7% of minimum wages.
We say: Build a financial cushion.
The system says: Tell us about your assets.
We say: Families should help each other.
The system says: Tell us about the money they gave you.
We say: Reduce your housing costs.
The system says: Tell us who is living with you and what your relationship is.
The recipient gradually learns a lesson that no government brochure intends to teach:
Before accepting help, find out how the help will hurt you.
That is the Secret.
And once someone has learned it repeatedly, announcing another helpful government initiative doesn’t necessarily produce gratitude.
It can produce suspicion.
There is a wonderful aphorism often attributed to Mark Twain, although apparently, he never said it:
It isn’t what you don’t know that gets you into trouble. It’s what you know for sure that just isn’t so.
That operates in both directions.
People outside welfare know many things “for sure” about people receiving it.
They should work. They should save. They should accept available opportunities. They should become more self-reliant.
People inside the system know some things “for sure” as well.
Tell government about something good that happened and your payment will likely go down.
Accept something and there may be a consequence. Make a mistake and there may be an overpayment. Don’t assume today’s assistance will leave tomorrow’s benefits untouched.
Some of those beliefs will be wrong in particular circumstances. Some will be outdated. Welfare rules change.
But enough of them have been correct often enough to create a culture of distrust.
And trust cannot be restored with better pamphlets if the underlying incentives remain contradictory.
We keep confusing barriers with incentives. This is where welfare reform repeatedly goes wrong.
Governments worry that adequate benefits will reduce the incentive to become independent. So, they create rules intended to ensure that recipients remain motivated to leave.
But independence requires infrastructure. A person needs enough stability to take risks.
You need transportation to get to a job. Clothing to attend an interview. A phone an employer can call. Enough money in the bank to survive until the first paycheque. Somewhere stable to live. Perhaps some help from your parents. Perhaps a roommate. Perhaps education or training.
These aren’t luxuries competing with independence.
They are the scaffolding from which independence is built.
Yet welfare policy has historically treated many of them as evidence that a person needs less welfare.
That is the contradiction.
The question we should ask first
There is enormous enthusiasm today for helping low-income people navigate benefits, improve financial literacy, obtain tax credits and access programs for which they qualify.
I support that work. But before constructing another floor on the building, we ought to inspect the foundation.
We need to understand what people actually know, what they mistakenly believe, what we mistakenly assume they know—and what years of experience with government have taught them.
The first question shouldn’t be:
How do we persuade low-income people to make better choices?
It should be:
What happens when they make exactly the choices we tell them to make?
If getting a job, acquiring skills, receiving family help, sharing housing and accumulating modest savings are the behaviours we associate with independence, then our income-support programs should make those behaviours easier rather than more precarious.
Otherwise, we have constructed an extraordinary contradiction.
We tell people receiving welfare that their responsibility is to build a bridge to independence. Then we regulate the lumber. We count the nails. We question who helped them build it. And sometimes we remove pieces of the bridge as they cross it.
That is the Secret welfare recipients already know. The rest of us need to learn it.