Social Welfare Measures

The humanitarian and egalitarian sentiment which helped produce the steeply graduated individual income tax has also produced a host of other measures directed at promoting the ‘‘welfare" of particular groups. The most important single set of measures is the bundle misleadingly labeled “social security.” Others are public housing, minimum wage laws, farm price supports, medical care for particular groups, special aid programs, and so on.

I shall first discuss briefly a few of the latter, mostly to indicate how different their actual effects may be from those intended, and shall then discuss at somewhat greater length the largest single component of the social security program, old age and survivor’s insurance. Miscellaneous Welfare Measures

I. Public Housing One argument frequently made for public housing is based on an alleged neighborhood effect: slum districts in particular, and other low quality housing to a lesser degree, are said to impose higher costs on the community in the form of fire and police protection. This literal neighborhood effect may well exist. But insofar as it does, it alone argues, not for public housing, but for higher taxes on the kind of housing that adds to social costs since this would tend to equalize private and social cost.

It will be answered at once that the extra taxes would bear on low-income people and that this is undesirable. The answer means that public housing is proposed not on the ground of neighborhood effects but as a means of helping low-income people. If this be the case, why subsidize housing in particular? If funds are to be used to help the poor, would they not be used more effectively by being given in cash rather than in kind? Surely, the families being helped would rather have" a given sum in cash than in the form of housing. They could themselves spend the money on housing if they so desired. Hence, they would never be worse off if given cash; if they regarded other needs as more important, they would be better off. The cash subsidy would solve the neighborhood effect as well as the subsidy in kind, since if it were not used to buy housing it would be available to pay extra taxes justified by the neighborhood effect.

Public housing cannot therefore be justified on the grounds either of neighborhood effects or of helping poor families. It can be justified, if at all, only on grounds of paternalism; that the families being helped “need” housing more than they “need” other things but would themselves either not agree or would spend the money unwisely. The liberal will be inclined to reject this argument for responsible adults.

He cannot completely reject it in the more indirect form in which it affects children; namely, that parents will neglect the welfare of the children, who ‘’need" the better housing. But he will surely demand evidence much more persuasive and to the point than the kind usually given before he can accept this final argument as adequate justification for large expenditures on public housing.

So much could have been said in the abstract, in advance of actual experience with public housing. Now that we have had experience, we can go much farther. In practice, public housing has turned out to have effects very different indeed from those intended.

Far from improving the housing of the poor, as its proponents expected, public housing has done just the reverse. The number of dwelling units destroyed in the course of erecting public housing projects has been far larger than the number of new dwelling units constructed. But public housing as such has done nothing to reduce the number of persons to be housed. The effect of public housing has therefore been to raise the number of persons per dwelling unit. Some families have probably been better housed than they would otherwise have been those who were fortunate enough to get occupancy of the publicly built units. But this has only made the problem for the rest all the worse, since the average density of all together went up.

Of course, private enterprise offset some of the deleterious effect of the public housing program by conversion of existing quarters and construction of new ones for either the persons directly displaced or, more generally, the persons displaced at one or two removes in the game of musical chairs set in motion by the public housing projects. However, these private resources would have been available in the absence of the public housing program.

Why did the public housing program have this effect? For the general reason we have stressed time and again. The general interest that motivated many to favor instituting the program is diffuse and transitory. Once the program was adopted, it was bound to be dominated by the special interests that it could serve.

In this case, the special interests were those local groups that were anxious to have blighted areas cleared and refurbished, either because they owned property there or because the blight was threatening local or central business districts. Public housing served as a convenient means to accomplish their objective, which required more destruction than construction. Even so, “urban blight” is still with us in undiminished force, to judge by the growing pressure for federal funds to deal with it.

Another gain its proponents expected from public housing was the reduction of juvenile delinquency by improving housing conditions. Here again, the program in many instances had precisely the opposite effect, entirely aside from its failure to improve average housing conditions. The income limitations quite properly imposed for the occupancy of public housing at subsidized rentals have led to a very high density of “broken” families in particular, divorced or widowed mothers with children. Children of broken families are especially likely to be “problem” children and a high concentration of such children is likely to increase juvenile delinquency. One manifestation has been the very adverse effect on schools in the neighborhood of a public housing project. Whereas a school can readily absorb a few “problem” children it is very difficult for it to absorb a large number. Yet in some cases, broken families are a third or more of the total in a public housing project and the project may account for a majority of the children in the school. Had these families been assisted through cash grants, they would have been spread much more thinly through the community.