Work & Happiness: The Human Cost of Welfare – Full Video
Human beings thrive on work. Independent of money, work brings us satisfaction, fulfillment, and happiness. It’s indisputable. Work and happiness are deeply linked. But for these Americans, finding sustainable work is a daily challenge. There are 47 million Americans who live in poverty, and survive only with the aid of a complex system of public assistance. But this well-meaning system can have devastating consequences. There’s so many good people that- who are just in an unfortunate circumstance who just get left behind. Welfare was like last option for me. People would look at me in disgust, I want to explain to them, I’m going through something right now; this isn’t me. You know…understand. None of us likes the idea of supporting people who can’t support themselves; and the poor, most of all, don’t like the idea of being on the dole. Once you’re poor, there’s no getting out of it! I don’t care! There’s no getting out of it. You know a lot better welfare system would be one that allowed people to try to get out without penalizing them. The real cost of welfare is the human cost of welfare. It’s not the dollar cost. Each year the financial cost mounts – as does the human cost of welfare. Major funding for this program has been provided by: L.E. Phillips Family Foundation. Chris and Melodie Rufer. Additional funding was provided by: Family Muhlenkamp Charitable Fund of The Pittsburgh Foundation. Harvey Cody. Each month here in Washington, D.C. the Bureau of Labor Statistics issues its report on the number of Americans who have gone to work. Work is vitally important to Americans and to everyone, everywhere. It’s not just a paycheck; it’s an essential component of our self-worth, our confidence, our happiness. I’m Johan Norberg, a writer and analyst from Sweden, and I’ve long been interested in the dynamic connection between work and happiness. Dignity is found in a hard day’s work, on a farm, in a factory, in a shop, or at a desk. But what happens when a person can’t find work? Here in the United States and in developed countries all around the world, governments have created welfare programs. Their admirable intention is to help the poor by providing a safety net to help get people back on their feet. But here in the U.S., research suggests that the various programs in the state and federal system we call “welfare,” often hurt the people they are designed to help. We will meet real people whose dreams and aspirations are defined and confined by a well-meaning system. Their stories represent millions of others for whom the safety net has become a trap. Their challenges and the odds they face are daunting, often insurmountable. It reminds me how important it is that I need to be self-sustaining, that I need to be independent. Chris is a divorced mother to four daughters, one of whom was born with cerebral palsy and requires constant care. She seeks the independence she once had through a career, but the system seems to work against her. I just expect more out of life and better. I didn’t wake up saying I wanted to be on welfare, because welfare was like last option for me. Monique was born into poverty. She recently married the father of her youngest child, but has discovered that marriage comes with a very real financial penalty when one is on welfare. Currently unemployed, she is determined to overcome and find work to support her family. I’ve been on welfare practically all my life, you know, growing up, before I was born, welfare existed in my family. Angel is a single father of two growing children. He’s a third generation welfare recipient, suffered parental abuse and lived a life of crime as a young man. With all that behind him now, he still feels stuck in the system. In prison they take you, and they shave your head, they give you a prison outfit; and they give you a number. And they tell you, “Learn this number.” “This is who you are.” Richard is resetting his life after 20 years in prison. Raised in poverty by drug-addicted family members, Richard’s life was immersed in crime from an early age. He is now determined to turn his life around. All of these people search for work and for happiness. All of them face obstacles built into the American welfare system. Of all the books and articles I’ve read on the welfare system and of the importance of work for happiness, none are more relevant than those by Charles Murray. Beginning with his landmark book Losing Ground in 1984, Charles continues to write about the American welfare system. Yeah…beautiful place. Come on in. Thank you. A wise man wrote that the problem with the welfare system is not what it costs, but what it buys, and I think that was you. Well, it’s a nice line. Yes, it’s much easier to say let’s give people money than let’s give people satisfying lives. But you know what? That should be – that should be the goal of social policies. Money’s the easy part, and so we- we go with that. But this is something we often miss when we- we’re in politics- when we talk about the welfare system- because it’s easy to target a specific material level. I think they’re talking way too much about money; and they aren’t talking enough about human flourishing. This is my reading of the data as well. When I’ve looked at life satisfaction in Sweden, you can see that income is not the decisive factor. On no level it’s the decisive factor. We make a big mistake – a huge mistake- if we expect happiness to correlate directly on a one-for-one basis with the amount of money you’re making. Wasn’t this the classic puzzle in social psychology: why is it that lottery winners aren’t much more happy than the rest of us? Not only are lottery winners not “more happy”, it is a really good way to ruin your life, if your life is not grounded in other things. The happiest lottery winners keep on working. Has America’s focus on material prosperity for the poor actually come at the expense of human happiness? This large granite building in Washington D.C. houses the United States Department of the Treasury. This is where the government collects all the taxes, pays all its bills and generally manages the country’s economy. In fiscal year 2015, the federal budget included $3.8 trillion in expenditures; around $12,000 for every American man, woman and child. Around $1 trillion was spent on approximately 86 different programs making up what’s called the “welfare system.” Politicians and experts have differed on the increases and decreases in the level of poverty, but all agree that tens of millions of Americans are still considered “poor.” Chris lives in a small town in northern Washington. Originally from Kansas, Chris met and married her husband after graduating college. They had four children while running a construction business together. But life has been a challenge. Her second child, Madrona, now 13-years-old, was born with cerebral palsy, and 3 years ago, Chris was diagnosed with cancer. Is it a little too hot? The money that we were using to care for Madrona was running out. Is your chair getting too hot? Let’s get out of there. Yeah, the black gets pretty- pretty warm. That’s when we turned for assistance. And at the same time, that’s when I was diagnosed with breast cancer and then six months later, the kids’ dad filed for divorce. So…the domino effect of all of those things…and now here I am three years post all of that still on public assistance and really just now feeling like I’m getting my bearings in terms of okay, how will I transition out of this place now? Mommy, where’s the keys? The keys are over there. Both of my parents were very hard workers. They had a value around work integrity and providing for your family…I want to support my family independently, have my own place where I pay my own rent, and I have work. When you take work out of people’s lives, there’s a hole that’s produced, obviously, but it’s not just a hole in their time. Arthur Brooks, president of the American Enterprise Institute, writes and speaks extensively on what he calls “earned success.” 526. The real hole is created in their sense of dignity, in the sense of worth, in the sense of meaning. People are created to create value. Earned success is the concept that you are creating value with your life. And you’re creating value in the lives of other people. Chris wants to work, but can she afford to endanger her benefits? How much I work generally will decrease my benefits. There’s a certain amount where I myself will lose Medicaid insurance, which is important because I have a history of cancer. It’s very complicated to figure out what the sweet spot is. The way the system works, Chris would lose more benefits if she worked an entry-level job than she could compensate for with earned income. Generally, what I come up with is if I want to support my family independently, have my own place where I pay my own rent, I have work, you know, I need to go from where I’m at now to around $60,000 a year. Hi Amber, how’s it going? How was the library? Good. When we’re talking about how to fix the welfare system, let’s start with the reality of how miserably it’s run: the amounts of time that you have to spend dealing with the welfare bureaucracy if you’re a recipient. The complex rules which make it next to impossible to understand how you could get out of it! I mean how many hours can I work without losing my benefits? What are the parameters? Social scientist Isabel Sawhill is a senior fellow at the Brookings Institution, and served in the Clinton administration. She has spent decades studying welfare and its effects. There’s no question that there are certain disincentives built into our programs, so that if you earn more money, that you’re going to lose some benefits. You go to the office and you see the population of people who are working with this… everyone just looks so worn out. And I get it. It just wears you down. And I- You know, if I’m going to be worn down, I’d like it to be because I’m working, not because I’m- you know- running around to different appointments. Chris receives assistance from 5 different programs, all run by separate agencies: TANF, Medicaid, Child Support, SSI and SNAP. Each carries distinctive rules and regulations, along with separate paperwork, appointments, phone calls and deadlines. These rules are very complicated. They’re- they’re tough. And I do not blame a welfare recipient who does not know all the rules. That doesn’t even make sense. See this is why I just want to be off of the whole thing. You know, and every time I go to my case manager and I say that, I say I need to transition off. This is maddening. I don’t have time for this and you know, and she really warns me against it. Mom? Yes, ma’am? Is it time for lunch? It is time for lunch. I was just putting my stuff away. And the problem is that that leads to people not working as much as they’d like to, or as much as they should. So it’s bad for families, it’s bad for children, it’s bad for individuals. Robert Doar is former commissioner of New York City’s Human Resources Agency. He has an inside perspective of why he believes the welfare system is broken, and what he considers might be done to address the problems. Whether it’s childcare, or public health insurance, or food stamp benefits or tax credits, we run our programs in this country through all these different separate silos of programs, and so for a recipient of assistance, they’re moving around from one to the next, to the next, and they don’t really know- or understand- why the rules are different. Whether or not Chris will succeed depends largely on the policies executed by the people who work in this building. Here at the Department of Health and Human Services there are more than 80,000 full time employees administering the programs designed to aid America’s poor. But despite this army of people, and $1 trillion in resources, the unintended consequences of those programs can prevent the poor from getting back on their feet. One big problem is the “welfare cliff.” If we follow earnings as income increases, food stamps, housing, and TANF begin to bottom out, leaving recipients in a worse financial position. Even if a recipient keeps working- the cliffs continue as income rises, making the jump to work financially risky. To make matters worse, it is unclear exactly when benefits are lost. The rules change by state, legislation, income, and number of dependents. In a welfare cliff situation, each additional dollar of earnings, each opportunity for a promotion, each additional number of hours, becomes a balancing act that a welfare recipient has to decide. Do I want that, or will I lose too much in childcare assistance? Or will I lose too much in public health insurance coverage? Or will I lose too much in cash supplemental aid? And that kind of dynamic is not healthy; is not helpful. You know a lot better welfare system would be one that allowed people to try to get out without penalizing them. She turned it off. Sam, get up. You turned off the alarm? Like his mother and grandmother before him, Angel is on welfare. Why? You’ve got to start getting up, Sam. It’s already past 7. As a single father with two children, he receives a variety of state and federal government benefits. Nat, start getting up, c’mon. Usually a father would say I want my son to grow up like me. I want my son to grow up like his father. No. Not at all…because the way I grew up and the things I’ve done in the past. If you’re going to school by yourself, that’s fine, if not, I’ve got to walk Samantha. No, it hurts me to say I don’t want him to grow up like me. I want him to grow up and be his own man. I want him to be better than me. All right…we ready? Angel wants to work to support his children, but if a minimum wage job is the best he can get, it may not be worth it. It doesn’t make sense to get a minimum wage job. You know? Might as well stay on welfare. Because having a minimum wage job, it’s like the same thing as being on welfare. It’s little money. Angel feels “stuck” in the system. His long-term girlfriend, Steffani, tries to help. I’ve got to call the housing to find out what’s going on with the transfer and everything. Okay. Yo, you got to go with me to the child support to straighten this out. They said you have to go down and file for a modification and they should stop it right away. That’s what they told me. Every paper that I got on top of my shelf right here is nothing but bills and bad news. There’s no good news right there. None…just bad thoughts go through my mind. (Woman on phone talking) Angel Rodriguez, I’m calling from Bronx, New York. It’s about helping people be as self-sufficient and independent as they want to be. And unfortunately, our programs right now are not encouraging that sufficiently. (Woman on phone talking) No. T1. T1, T as in Tom, yes T as in Tom, I’m sorry. Every time you go in for an appointment, they should tell you about jobs. They should have listings on the wall instead of listings like “Do you need food stamps? Do you need cash assistance?” Things like that! It’s ridiculous. No no…wait…okay well, um I was speaking to someone like maybe no more than five minutes ago and she was helping me, but I forgot to give her this account number. I have found in going around the country, and talking to low-income recipients of forms of assistance. They say they’re good at giving me assistance financially, but they don’t help me get a job. Once I start working, welfare is going to send me a letter saying the same thing, “We are going to cut you off.” But I gotta go to work, so I’m not thinking about what welfare thinks right now. I’ll worry about that later. Hold on, hold on… here, here…ask them. They can’t talk to me. All right. Can I have someone- can I have someone speak for me, please? Because this is just aggravating me, I’m sorry. Today in America we have a bottom half of the population that effectively has an economic growth rate that’s about zero. We can’t stand for that. How much we get every 2 weeks from…? You? PA? It’s just, it’s always a struggle. It’s always something else that we can never catch up on. Look around, we see that the poor in this country are not having an increasing standard of living. We find that the bottom 20 percent of the income distribution has about a third less likelihood of getting to the middle class or above as it did in 1980. Mobility’s kind of stagnant in this country and that’s a big problem. A life on public assistance has greatly affected Angel’s relationship with Steffani, and he doesn’t want to drag her down with him. Once you poor, there’s no getting out of it! I don’t care! There’s no getting out of it. Don’t waste your time being with me. …why I tell you these things man. I don’t want to drag you down, don’t you understand? Listen. Stop. You know, you’re really intelligent. You’re beyond freaking smart man. Being poor doesn’t make you any different of a person. It doesn’t! Angel, it doesn’t matter. I could do it alone; I could do it with you. I could do it with anybody else. Steff, the reality is you shouldn’t be with someone that’s not really doing much for themself. Not that I’m lazy or anything like that! It’s just I’m stuck; you don’t want to be stuck with me. I’m not. I’m helping you get unstuck! It’s just this life is embarrassing; I don’t like it. Poverty produces stress and stress takes a toll on relationships. Inadvertently, welfare has magnified the effects, penalizing marriage and encouraging single parenthood. Charles Murray has strong feelings about the impact of welfare on the family. Do you think it’s fair to say that welfare programs have undermined the family as an institution by discouraging marriage? Absolutely, they’ve undermined marriage as an institution…it has contaminated, corrupted, undermined, eroded the social penalties and rewards that have made communities function for millennia. We have had growing numbers of single parent families in the U.S. and they tend to be poor. They are 4 or 5 times as likely to be poor as a family that has two parents. But now, single parent families are about a third of all families, and still growing; we have a much more costly and serious problem on our hands. Poverty is caused by a variety of factors. But there are ways to reduce the risk. Poverty rate right now is about 15 percent of all Americans being poor. If you graduated from high school, if you worked full time, and if you didn’t have children until you were in a stable, two-parent family, the poverty rate would fall to 2 percent. The real problem with the welfare system is that it provides short-term incentives that are bad, masking long-term outcomes, which can destroy your life. But they mask them pretty effectively. Monique has been on welfare all her life. She watched as her mother died of AIDS and later had her first child at age 16. Just trying to find love in all the wrong places and bumped into my son’s father. …I was expecting to have a family, and he was just looking for somebody to just lay around with. At the time, welfare seemed like a solution to her problems. When I first got on welfare, I did, I felt like I was getting into a Jacuzzi-RELAX-I was able to take care of my son. But then, you start, yeah… you sink, everybody sinks. You’re 16-17-years-old… you’re pregnant. You are going to get a pretty- a reasonable cash income from your point of view at that age of life. You’re going to get maybe a free apartment, you’re going to get food stamps, you’re going to have healthcare for the baby, all these things. All of them make it easier to have that baby…and not necessarily say to the guy, step up to the plate and take care of it. As single parenthood rises, increasing the rate of poverty in America, the risks of single motherhood and the importance of marriage become critical. If you and your romantic partner are using condoms, at the end of a 5-year period, your chances of getting pregnant are 63 percent. The probability at the end of 5 years that you’re going to get pregnant using the pill is 38 percent. Now, most people don’t know that. If you use a long-acting form of contraception, and that means either an IUD or an implant, then your chances of getting pregnant are around 2 percent at the end of 5 years. Today, Monique and her children live in public housing on Staten Island in New York City. Until recently, like so many others, Monique was a single mother on welfare. All that changed when she married Keith. I got married because- to live as God expected me to. And I try to be honest with public assistance and let them know that we live together and we’re married. And we thought that adding him onto the case would benefit us. But we lost out. The short-term incentive is you’re probably better off if you don’t get married. Terrible long-term incentive…but a perfectly understandable short-term incentive. I know it’s hard to find a job now-a-days. Yeah it is. How do you think your West International interview went? It went alright. It went alright? Yeah. I hope you get it, too. Keith used to get like almost $300 in food stamps, and I was getting almost like $600 in food stamps. Well, us together now, we’re getting like $400 and something odd dollars in food stamps. It looked like it was better when I had my own case and you had your own food stamp case because we had more money coming in. More help. The way the system is set up is you’re better off single than you are married on public assistance. Well, the welfare system discourages marriage in a very simple way. It combines the income of the two people in the household. So when they’re married both of their incomes count as eligibility factors in determining whether they’re going to get assistance. So the more income they have from the combined sources, the less benefits they are going to get. That definitely sends a disincentive to marriage. And that’s a troubling fact. Throughout history, as nation after nation has become prosperous, each has developed programs designed to help its poorest citizens at the state’s expense. As early as 1889, Chancellor Otto von Bismarck of Germany created an old age pension for workers who could no longer find employment. Helping the poor it seems has always been a government concern and it’s likely to remain so. The very beginning of the welfare system was the passage of the Aid to Dependent Mothers early in the New Deal. And you know what? It was perfectly reasonable. What did they have in mind? Francis Perkins was secretary of labor at that time and she had in mind widows- widows with small children. And they needed help! What is a more natural object of our affection? When the stock market crashed in 1929, the world entered the Great Depression. After his election in 1932, Franklin D. Roosevelt instituted federal reforms to help the poor, including cash assistance for single mothers. With 20 percent unemployment in America, massive public works projects strengthened families by providing employment in a difficult time. “I pledge myself to a new deal for the American people!” Roads, public parks, dams and bridges were built, tying work directly to assistance. But even President Roosevelt realized that there was a limit to what the government could do. President Roosevelt certainly said often that welfare was not intended to be for a lifetime and not intended to replace work. And to the extent that we’ve gotten away from that sentiment in some of our programs, that’s unfortunate. “The lessons of history, confirmed by the evidence immediately before me, show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit. We must preserve not only the bodies of the unemployed from destitution but also their self-respect, their self-reliance and courage and determination.” It all started out so innocently. And if I’d been alive then, I would have been in favor of it then. But it ratcheted up very slowly. Even by the end of the 1950s, the welfare rolls were small. The amounts of money were small. Welfare really was not, at that time, an attractive way to try to live. Roosevelt remained true to his convictions, and phased out emergency public projects as the economy improved. From the 1940s to the 1960s, poverty fell dramatically in the United States. In 1964, the Great Society and War on Poverty programs were inaugurated in the United States from President Lyndon Johnson. “And this administration today here and now declares unconditional war on poverty in America.” The ideas were great. I mean you listen to the early speeches and it was soaring rhetoric about the whole human person, the dignity of people, and not wanting people just to be on the dole. “Our aim is not only to relieve the symptom of poverty, but to cure it, and above all, to prevent it.” And great intentions. But they weren’t fulfilled. The truth is that dependency grew and grew fast. More and more families were multi-generations in poverty as a result of these programs. Johnson’s War on Poverty was an admirable attempt to deal with a problem that had been kept in the shadows for too long. We really thought that it was very simple. And by “we” I mean me, too. You have people who are unemployed: have a jobs program. That will take care of that. You have schools in the inner cities that are turning out kids who don’t know how to read and so forth: pay teachers more, put more resources into the school…you’ll get better results. Where we failed is to make people more self-sufficient. I don’t think we’ve done a very good job there. There are a whole bunch of things that seemed like they would be easy to do and within half a dozen years it was quite obvious they were really, really hard to do. I mean there was so much poverty, how do you solve that? And the answer was- according to many of those programs- spread money around. People don’t have very much money, and so you give them more money and then they’ll be able to flourish, they’ll be able to- to thrive more. Well, that’s not right. Instead of ending poverty, progress slowed, and then it stopped altogether. In 1996, President Bill Clinton instituted work support and time constraints, determined to get the train back on the tracks. “A long time ago I concluded that the current welfare system undermines the basic values of work, responsibility, and family, trapping generation after generation in dependency and hurting the very people it was designed to help. Today we have an historic opportunity to make welfare what it was meant to be: a second chance, not a way of life.” Bill Clinton had the advantage of a couple of decades of social science that told him how hard it was to do the things that L.B.J. had thought he could do easily. It was a bipartisan effort, but it was controversial to be sure. It said very clearly that there is a two-way street here with public assistance. If you want our assistance, you need to do something to show that you’re being responsible and moving toward the workplace. You didn’t find a job; you get kicked off the rolls. It’s what we call shift and shaft. It shifts the problems to the state and local levels but most of all it shafts poor people and their children. The opposition to it was expressed by the left in just those terms; that it was going to be “Calcutta on the Hudson.” When we did interviews with mothers who’d been on welfare they said they wanted to work. It wasn’t a right or an entitlement. That was extremely important, and what was the best part about that act, was that people responded. And sure enough- when we reformed welfare and provided them with more childcare and more wage subsidies when they went to work- they went to work in droves. Applications for cash assistance plummeted to record lows. But other programs like the Earned Income Tax Credit were expanded to help off-set taxes for low-income Americans. We replaced the welfare program with several other programs, most importantly something called the Earned Income Tax Credit- which is a wage subsidy- that you only get if you’re working. Today, it is lauded on both sides of the aisle for promoting work and therefore happiness. Despite the success of the 1996 reforms and the best intentions of Roosevelt, Johnson, and Clinton, today’s welfare programs remain a labyrinth of individual agencies with budgets rising every year. It has almost endless rules. If you earn too much at your job, you lose benefits. If you save money in the bank, you lose benefits. If you marry someone with income or savings, you lose benefits. In order to avoid penalties like that, people improvise, and that creates activity in what is known as the underground economy. You got my orange juice? It’s alright, c’mon let’s go! Sometimes I have to break the law and cash food stamps. Not for drugs, not for none of my habits, but for my kids. As the food stamp program has grown it’s become more and more incapable of monitoring the proper use of the benefit, which is a voucher, it’s supposed to buy food, hopefully healthy food. And instead, what’s happened is that people are using the E.B.T. card to trade in order to receive cash benefits at a discounted rate. Let’s just say I got $300 in food stamps, I don’t have no cash. I’m gonna keep $200 in food stamps, go to the super market and I’m gonna take $100 in food stamps… and turn it into cash. Meaning- this is what welfare don’t understand. Out every 10, the store will take out $3 for themselves…and give you the 7. So add it up, out of 100 in food stamps, you get 70 in cash. Well, of course, it’s understandable. I’m a human being I understand people in need who face difficulties and make difficult choices. What I want is a government program that is interested not just in providing a voucher for food, but is interested in helping that family grow and prosper through their own earnings and their own labor and, unfortunately, the food stamp program is insufficiently interested in those things. So I’ll meet you at 2:20, alright…okay? I love you, sweetie. Nobody’s watching. I don’t like learning those tricks; I don’t like knowing those things…I don’t. Welfare doesn’t have no opportunity. School, training, you know… busting your behind to get a job, that’s more worth it; instead of you being on welfare, which is easy, but be stuck on it for years. You don’t want to bring kids into the world and be struggling. Who wants to be struggling with kids? What do you do? Keep on striving… and make a better life for the kids, right? A few years ago, unemployed and living in the Bronx, Monique failed to pay her electric bill; her power was cut off. And she turned to the only resource available: the underground economy. Let’s go. It’s time to go. My lights was out. I had two little kids. I remember my lights went out when I was a kid. I was left in the house by myself in the dark. And I refused to have my kids living in the dark. I had 12 hours to get that bill paid for them to come out and turn my lights on. I did what I had to do as a woman, as a mother, as a provider. So I came up with a quick hustle, found some drugs in my building, and wind up about 2, 3 weeks later I got arrested. The officers was shocked, they did my fingerprints, found out that that was my first time offense… I never did it again. I wouldn’t. I’d rather come home with a paycheck even if I got to wait a whole week and do it, I would rather come home with a paycheck. Welfare policies have created negative consequences. One example is the way in which the poor are penalized for good behaviors like saving money. Recipients have to spend down savings and dispense with assets in order to get help from the government. Your Social Security number goes through a machine. So let’s just say, I wind up throwing 2 or 3 thousand dollars in the bank… That’ll ring up and welfare will know that. And RIGHT AWAY within two to three weeks, you’ll get a letter stating that they’re gonna cut you off of welfare. You know? If you don’t want to get cut off, you take that money out- spend it on whatever- and welfare will say show us receipts. You know, bring the receipts. We’ve set up in our country a situation where too many workers are thinking about multiple ways to avoid working on the books, because they either don’t want to pay taxes or they don’t want to lose welfare benefits. Both of those problems we need to address. But for people like Angel, who can’t put their savings in banks, there is always the underground economy. The University of Wisconsin has estimated that as much as $2 trillion may go unreported every year in the underground economy. Some of those activities are illegal, but a lot of the underground activity is simply extra-legal…even entrepreneurial. For example: bartering, exchanging services like car rides and babysitting for food and cleaning services. It may be that the underground economy creates space for opportunities that would otherwise not exist. I’m Paris, I love sneakers! My name is Raudi. I’m actually out here camping out as you can see for the new Jordans coming out tomorrow. I do it mostly to collect. Like- I’ve been collecting sneakers my whole life. I had to at some point like almost 200 pair of sneakers. It’s a sneaker culture. Like, we all a part of it. Every weekend there’s a new sneaker that comes out. So we try to get as many as we can. If I sell all of them, hopefully, I’ll probably get enough to buy a house or something. Because they go up in value within the year; especially if they’re brand new. We do this basically for a living. Like, I’ve been doing this for almost like 6 years now. Stores like Flight Club, Sneaker Pawn, and conventions like Sneaker Con provide opportunities to buy, sell, and trade second-hand sneakers. Chase Reed of Sneaker Pawn is well- acquainted with a new booming business. So basically, we’re a sneaker bank. People can come to us and get money instead of having to go to a bank or having to go through somebody else. Because of the possible penalties that come with a traditional bank account, sneakers have become an inventive way to save. Buying sneakers is not throwing money away, because it’s an asset just like everything; just like a house would be, just like anything you- anything you own is an asset. The same way you trade baseball cards, same way you buy baseball cards, you sell ’em, same thing with sneakers. If you up to do the swap, I’ll do the swap. For which ones? I don’t know…I got those already. If you get 10 sneakers a week for $200 and you sell them for $300 and you do that for 40 releases, you get $40,000 and that’s just off of 10 sneakers, so imagine if you get 20; that would be $80,000, if you get 30 sneakers that would be $120,000, and so on. That’s not including the sneakers that go for $2,000. That’s only sneakers that cost $300. Thanks a lot man, I appreciate it. I think anybody in poverty, there’s a million ways to get out- instead of going and sell drugs- and sneakers are a big way to get out. All right? Good lookin’ Chase, I’ll see you later. Definitely…alright? I’ll probably be back in a couple days, bro. Most agree the best solution to welfare is a job, but instead, poverty programs have spun out of control and have proven difficult to run effectively. One program in New York City could potentially serve as an example for reform. It’s a simple, successful model for transitioning the poor into work in the private sector. For these men, work matters and it’s not just about a paycheck. Collectively walking 160 miles every day in rain, sleet, snow, and heat; they clear nearly 10,000 tons of garbage from New York City streets each year. It’s the first job they’ve had in a long time and it’s part of a training program. But for them, this dirty work is far more than cleaning streets. A bucket and broom have become the first step on a path to a new life in an organization called Ready, Willing & Able. Its Co-Founder is Harriet McDonald. Our motto is: “Work Works.” And what we give people and believe in is a hand up- not a hand out. Everybody gives up entitlements as soon as they get here. This is about earning your way to success. Ready, Willing & Able is a 10-month program that begins with one month cleaning New York City streets, and culminates with a career in the private sector. How’s everything? How long you here now? It is specifically designed to transition men out of poverty, homelessness and incarceration. The program had an unlikely beginning. I was actually a screenwriter living in Beverly Hills. And I was hired to write a screenplay about a homeless little girl who actually was a real person. And I’m entering Grand Central, which at that time, there were thousands of homeless people living there. And off this bench pops up this little girl, and that’s April. And she knew all the homeless people because she had lived there so long and she was only 17. And she had the quality of a wild bird in this great station. Harriet became immersed in April’s world and the two formed a strong bond. And I thought, well, I’ll go home; I’ll write this screenplay and it will save her. And about a week after I finish the first draft, I got a call that she had killed herself. Fueled by April’s death, Harriet returned to New York, where she married homeless advocate George McDonald. In 1985, they founded Ready, Willing & Able. At that time, everyone said that they’re too lazy; they’re too crazy, they don’t want to work and all that stuff. Ready, Willing & Able’s first contract was to provide basic maintenance for New York City’s homeless housing. From the first day, they out produced the contract. That was their level of motivation, and we knew then that we had it right. And since we’ve begun, we’ve generated $750 million in revenue, putting $250 million into the pockets of the people who work so hard in our program. And our budget is $50 million a year right now. And we’re growing! Richard Norat was born into poverty and introduced to drugs at the age of eight. Morning! I had slept in cars; I had slept in trains…rooftops; I’ve eaten from garbage. I wanted to die sometimes. I mean I’d wake up in the mornings and I was so dirty and smelly, and I’d- I’d get on a train or a bus and people would look at me in disgust. And- and it would hurt because I could see them looking at me. I didn’t even have to look at them, and I could feel them looking at me, and I wanted to explain to them, I’m going through something right now. This isn’t me. You know…understand. Richard was serving a 20-year prison sentence when he found out about Ready, Willing & Able. When he was paroled, they were his first and only option. When I got here and they accepted me… it was cathartic. A weight was lifted off my shoulders. I got to eat… I got to shower. I slept in a great bed. The energy here was so positive. Everybody’s building. Everybody’s calling me sir. Nobody calls me sir. So how long have you been with us now? Nineteen…nineteen months now. I remember you saying to me once that, “Do all you can while you’re here- because by the time you look- it will all be over.” Yeah. I mean…sometimes when you’re re-creating or reinventing yourself it looks so far away. But then when you get involved in the actual work of it, it goes quickly. Well, I worked with Ready, Willing & Able when I was the commissioner of social services in New York City. And the program is a success because it treats people as individuals who have capabilities and have assets; and can go to work; and want to go to work. Remember this about our program: once- the morning that you come here, YOU still have to do the work. Yes. YOU got up every morning. YOU worked hard every day. YOU stayed drug free. YOU went to class at night. YOU did everything necessary to recreate yourself. That’s what makes us different. That’s fantastic. You know? That’s real. The most important thing we can give people is economic opportunity. They will do the rest, I promise. These are guys that nobody wants to deal with at all. And yet, these are the people that are involved in the Ready, Willing & Able program. They have astronomically high rates of success in the job market, low rates of re-incarceration, and high rates of flourishing and happiness. I was talking to a guy in New York who had been in prison for a long time. He was working for an exterminator company; it was the first real job he’d had. And I asked him, “Are you happy?” And he said, “Let me show you something.” He said, “Look at this email; it’s from my boss.” And the email said, “Emergency bed bug job, East 65th Street, I need you now.” That’s the first time in my life anybody has ever said those words to me.” That came through work. I never thought I could ever associate my name or my life with a career. Doctors have careers; lawyers have careers, I’m licensed in the State of New York. Look at that sight… that’s a beautiful view. I’m free. I’m literally free. Here, look right here… the email’s in there, look for it…look for it. It says it, right? Yeah, it says “Your background check has cleared and we are excited to offer you a position…” The value and joy of work is part of our shared humanity. When persistence meets opportunity, it can lead to redemption. I got a job working for munchery.com; it’s delivering, like high-class food. This job really changed me. I love it… this job, you know, it’s the best thing that’s ever happened to me. Steve come get your coat. Kayla come get your coat. Yeah, grab your book bags. Okay…who’s first today? Me! Steve. I’m second. For me to earn my own success… is a big deal. The training I have coming up it’s a home health aide training. It’s an opportunity of a lifetime. That’s how I look at it. Monique cannot wait to start work as a home health aide. When I put on my uniform (laughs), I’m getting up at 5:00 in the morning! I’m gonna be fully dressed; I’m gonna be ready. I’ve been waiting for this opportunity for a long time. Oh…you did it! You did it! Alright…go to your speak button. Let’s see how it sounds. But for Chris things changed tragically. Just months after filming, her courageous daughter Madrona passed away suddenly. Moving forward with Madrona’s spirit of facing challenges, Chris made new plans; she has relocated to a nearby city to find work and a better future for her girls. We have learned there’s hope in seemingly hopeless cases. To ensure more people have the best chance at happiness, we need to re-evaluate our policies and perspectives. The whole idea of “send us your huddled masses,” engraved on the Statue of Liberty. They didn’t say, send us your huddled masses, and we’re going to park them in public housing and give them food stamps; and make sure that they’re out of sight to everybody. No. The problem that we have is not just the mis-design of programs, it’s not that we’re spending too much; it’s that we have the wrong philosophy. Poor people are not liabilities to manage; they are assets to develop. When we’re talking about people who are really struggling and facing difficult times, the objective is not to save more money; the objective is to help more people in the most effective way. We need to rethink the welfare system, not on the basis of how much cash is going to whom, but on the basis of how we can bring earned success, and thus greater flourishing, and happiness and… better true welfare to the people who need it the most. Like so many prosperous countries, America has built a huge and well-meaning bureaucracy to care for its poor and unfortunate. In theory, the government can give you anything, except that one thing that gives you self-worth and the respect of others: knowing that you made this happen, that you accomplished this yourself. Until we revise this system, something essential remains missing: the independence and happiness that comes from earned success… from work. THAT is the human cost of welfare. Major funding for this program has been provided by: L.E. Phillips Family Foundation. Chris and Melodie Rufer. Additional funding was provided by: Family Muhlenkamp Charitable Fund of The Pittsburgh Foundation. Harvey Cody.