The Comfort of Welfare

Posted: Feb 01, 2013 12:01 AM
This week Japan announced its intention to cut welfare payments by a billion dollars over the next three years because people live too comfortably.

Imagine that, a government would actually tell its citizens you are getting fat and lazy and have no incentive to work because someone else pays your bills. We just found out you can't get government work by telling citizens they're takers. But after its economy derailed, Japan slipped into a two-decade slumber marked by people giving up on old beliefs and traditions like Japan's legendary work ethic. When we thought Japan would conquer the world, including the United States, we marveled at their four hours of daily commuting and loyalty to a single employer.

During the past twenty years, Japan and its warrior culture faded. It failed to conquer the world militarily, and then economically. Sure, it's a rich nation, but that has also worked against them as the youth take those riches for granted. But debt and policies based on bailing out and propping up failed businesses sapped that eagerness and drive from the country. Consider Sony (SNE), was there any way it should have lost out on music devices that propelled Apple? What about televisions? All I used to buy was Sony, now it's Samsung.

In the midst of fading glory is a generation of children that probably only heard about the samurai spirit of the nation, but certainly haven't experienced it firsthand. It's resulted in a bunch of young men that won't even make the first move on dates. They live in cushioned cocoons that include very small circles of friends and visits to beauty salons and no desire to put in the kind of work that leads to an extraordinary life. They have no clue how to put in the kind of extraordinary work that builds a military machine that almost toppled America and an economy that almost bought America.

New leadership in Japan recognizes this, and they're taking action. Don't get me wrong, the samurai attitude resulted in inhumane acts of aggression against its neighbors and a fierce war with America. Yet, I long for leadership in America that doesn't lower the bar of achievement to the point where mediocrity is the goal. I fear the idea of everyone getting a trophy in school will muffle the inner seeds of innovation and competitiveness that historically blossomed into the leaders that changed the world.

Japan is correct. Poverty shouldn't be so comfortable you don't want to work.

The dole is more than just a handout, it's a way of life for those that get sucked into it long term. It's an insidious trap, and the longer one gets stuck, the more difficult it is to get un-stuck.

The promotion of welfare, food stamps and even higher minimum wage as birthrights rather than temporary aide afforded citizens is really disgraceful. Poverty sucks, I know this, but nothing is worse than being an American that never takes advantage of the opportunities this nation provides.

There is a fine line between down-and-out and comfort. It's too attractive in America to drop out of the job market. The goodies are like anchors to incentive and desire.

So, Japan has it right, and it only took twenty years to figure it out. How long will it take for America to get this right? The Great Society delivered by LBJ, picked up from FDR, put entitlements on steroids and created the modern welfare and food stamp society. It was supposed to erase poverty and make all Americans prosperous. It didn't work.

Speaking of Work

The Center for College Affordability and Productivity produced "Why Are Recent College Graduates Underemployed?" which pointed out several thorny issues with the economy and employment reality. Here are some highlights:

> 48% of employed US college grads in jobs that require less than four-year college education
> Five million college grads in jobs that require less than high school education
> 24.6% of employees in retail sales have college degree
> 10.2% of cashiers have college degree
> 115,520 janitors have college degree

It's an exhaustive paper, and I'm still trying to understand all the implications, but for sure it says this is an economy that's not generating enough jobs or the right jobs. College grads have to gut it out and resist the temptation to drop out of the work force. I tip my hat to them and know it should get better because it can get better. But you can see how the allure of moving to the sideline must look to frustrated and underpaid grads.

The irony is a lot of high school dropouts aren't gutting it out; they don't have to. Portrayed as victims, they get to demand greater slices of wealth from the rich and not-so-rich. You wonder how long college grads can hold out before checking out.