Have Behavioral Economists Ever Met a Poor Person?

It's no secret that America's safety net is quickly evaporating.

By Channing Kennedy Feb 03, 2011

Crossposted from the American Prospect.

This morning, Mike Konczal at Rortybomb (link h/t Adam Serwer) responds to a bit of behavioral economic wtf-ery that’s been around since the creation of the safety net: the conservative notion that aid to the poor feeds a "culture of poverty" and leaves its subjects even worse off.

Konczal sums up the disconnect between math and reality:

One of the more curious behavioral responses [that behavioral economists see] is that people hate unemployment. They hate not being part of their productive community, they hate not contributing, they hate the loss of identity that one gets as someone who works. To an economist that’s b-a-n-a-n-a-s. Unemployment should be a pleasant vacation! But, last time I checked, it wasn’t (is that consistent with the latest frontiers in happiness research?).

Quite. And the reasons he outlines are the tip of the iceberg; it’s no secret (among actual unemployed people, at least) that in the present day, the requirements for state safety net programs are so draconian as to be actively counterintuitive to their stated goals.

In our 2010 "Colorlines: Race and Economic Recovery" TV special, we profiled Tisha, an unemployed young mother trapped in Connecticut’s support system. Tisha’s a trained home health care aid who had to let her certification lapse when a family member fell ill. But the system’s neither designed nor funded to help her get back into her field and match her with a job; instead, Tisha’s required by the state to spend forty hours a week at an underfunded city-run job training (read: dress-for-success) program. If she doesn’t go, or if she gets part-time work, or if she uses up her lifetime allotment of weeks in the program, she loses her food stamps. At the end of the program, a participant has no new skills, no new job openings in their community, a black mark on their employment record, and even fewer legal options to support their family. You can imagine that ‘curious’ doesn’t begin to describe their response.

Being unemployed in a community of color is even more difficult to escape from, since social resources like public transportation and schools are so badly underfunded, and since the foreclosure crisis has effectively shuttered any program funded by property taxes. My colleague Seth Wessler wrote an accompanying article for Colorlines.com, on mothers of color who illegally sell their own food stamps and go hungry, to be able to afford things like kids’ shoes and tampons.

Ironically, behavioral economists are right on paper: our nation- and state-level support systems for poor people do keep them poor. It’s far less due to the behavior of hypothetical poor people than it is to a system that punishes poverty, designed and promoted by the behavioral economists of the Reagan and Clinton years.

I’m a little confused about whether behavioral economists are assuming poor people don’t know the safety net is broken when they model these risk-assessment and individual financial loss scenarios, or if the economists haven’t noticed themselves. Either way, poor people can look around and make educated risk assessments perfectly well — especially since we’ve stuck them all in the same communities. Perhaps the best outcome, for all involved, would be for the economists to get an up-close look at unemployment.