The Michigan League of Human Services has published a new report explaining that a single parent with one preschool child and one in school would have to earn nearly $52,000 annually to attain the organization’s definition of “economic security over a lifetime and across generations.” The Lansing State Journal’s headline writer helpfully promotes one item on the League’s policy agenda by titling an AP story about the report: “Minimum wage not enough in Michigan.” A more accurate headline might read, “Single parenthood unaffordable in Michigan.”
Actually, the report's conclusion seems quite valid, and a goal worth striving for. Who wouldn’t prefer a society where every family enjoyed “being able to cover child care, housing, health care and transportation while establishing a savings and preparing for retirement," to use the AP reporter's distillation of the definition.
However, the League believes its adversary is a heartless economic and political system that fails to adequately “spread the wealth around,” as President Obama once put it. And their prescription is more coercive wealth redistribution from employers in the form of higher mandated minimum compensation levels, and from taxpayers in the form of more welfare, earned income tax credits, etc.
Alas, the real enemy is a much older and more ornery beast: An existential reality called scarcity. No matter how much the “wealth is spread,” there will never be enough of some things, starting with the ultimate scarce commodity, time: Every human being is allotted just so much of it, and no more.
The League may even acknowledge this reality, but still contends that more redistribution would improve things. Unfortunately, this crashes into other realities just as fundamental, in particular human nature, and the role of incentives in economic production. Sure, if you take all the rich people’s stuff and dole it out to the poor their challenges would be lessened — for a brief time, anyway.
The problem is, you can only sheer the sheep so much. And unlike stupid sheep, canny humans quickly respond to the incentive structure created when coercion is used to “sheer” the fruits of their labor, creativity and willingness to take entrepreneurial risks. Take too much and the golden fleece stops being produced.
The debate will go on between redistributionists and those who accept the “tragic view” of human nature — that we are not “new socialist men” willing to sacrifice everything for the good of the collective, but will always place the well-being of ourselves and loved ones first. It would be useful, however, if the welfare advocates were more forthright in acknowledging the real limits imposed by these realities. We could then get on with working to make the pie bigger rather than devising ways to divide it into ever-smaller pieces.