There is a new debate emerging in America over what role government should play in the lives of the poor and needy. This debate, which is sadly absent in Europe, is both timely and welcome: it is timely because it may raise pertinent questions about how to fix the U.S. government’s fiscal problems, and it is welcome because this is one of the key policy issues where conservatives can turn theory and ideology into practical, society-changing reforms.
Specifically, the issue at hand is whether or not Congress should add work requirements for those who receive federally funded social benefits. If approached correctly, this issue could help conservatives outline a smart, ideologically consistent, and impactful policy strategy with implications far beyond the issue itself.
So far, I do not see any particularly conservative contribution to the debate. I do not necessarily blame my fellow conservatives; the issue itself is not nearly as simple as it might seem. I have advocated work requirements in the past, especially when advising state legislators, gubernatorial candidates, and governors. My argument has always been practical: a work-for-welfare model helps cap the cost of the welfare state and hopefully puts people on a path to self-determination.
Today, though, I am willing to take a step back and embrace the very opposite view of work requirements. I do this from an ideological viewpoint, but without dogmatically letting conservative ideology cloud sound reasoning in economics and political theory. For the sake of brevity, though, I shall focus on the line from conservative theory to the rejection of work requirements.
It is a long-standing conservative point in welfare state theory that tax-paid benefits shall be concentrated to those who cannot provide for themselves, and to give them a strictly limited but dignified existence. It is not the state’s role to give out benefits to the gainfully employed—unless doing so will further a highly valuable conservative goal, such as promoting a social transformation centered around the traditional family.
Disregarding for now such extended policy goals, we are left with a conservative position on the welfare state that is echoed in prominent academic and policy literature. Noteworthy contributions come from Richard Titmuss with the essay “Universalism vs. Selection” (Pierson et al., The Welfare State Reader, Polity 2014), Esping-Andersen and his Three Worlds of Welfare Capitalism (Princeton 1990), and Social Insurance and Allied Services by Sir William Beveridge—the last also known as ‘The Beveridge Report.’
Although the precise definition of the conservative welfare state differs from one writer to the next, the literature draws a fundamental dividing line between conservative and socialist welfare states:
- The socialist seeks to use social benefits to reduce and eventually eliminate differences in income, consumption, and wealth between citizens;
- The conservative wants a welfare state that helps people stay out of what the Beveridge Report refers to as the ‘five giants’ of poverty: idleness, ignorance, disease, squalor, and want.
In other words, these two types of welfare states are designed to further very different policy goals. The socialist welfare state wants a societal transformation based on the principle that economic differences—inequalities—are intrinsically bad. By contrast, the conservative welfare state limits its ambitions, and thereby the role of government, to the care of the most vulnerable among us.
While this is a concise theoretical difference between the two ideologies, it rarely plays out in economic and social policy. This is not the result of some elaborate compromise between the two ideological strains; rather, it is the unfortunate consequence of conservatism in absentia on ideologically inspired policy matters.
Hopefully, this can change with the work-for-welfare debate. The Republican majority in the House of Representatives recently presented this idea, among others, for their 2025 policy agenda. On November 20th, in an article for Axios, Steve Scalise, the Republican Majority Leader, explained that it was desirable to attach strict work requirements to certain federally sponsored social benefit programs, including Medicaid.
It was notable that Scalise included the tax-paid health care program. Medicaid was originally created to provide a basic package of medical services to the poorest among us but, over time, it has grown into a critical player in the health insurance market. In some states, families can get Medicaid for their children—a program known by its acronym CHIP—if their household income is twice, or even three times the federal poverty limit.
Generally speaking, parents can get Medicaid if they make at least 138% of the poverty limit. In New Jersey, a pregnant woman making 205% of the poverty limit is eligible for Medicaid. In Maryland, she can make up to 264% of the poverty limit and still get tax-paid Medicaid. If she lives in California, the threshold is 322%.
In short, Congress has allowed the Medicaid program to foray deep into the layers of gainfully employed Americans. Now, the Republicans want to add work requirements to the list of criteria that make a person eligible for Medicaid.
The logical consequence of work requirements is that able-bodied people who refuse to seek work will lose their benefits. Spontaneously, it is easy to react positively to this statement, but let us draw the consequences from it and see where they lead. If we make the reasonable assumption that these work requirements are generalized to cover all social benefits, then we decouple the entire welfare state from the able-bodied who do not have an income. Instead, we concentrate all of the benefits to those who are gainfully employed.
Is this a morally desirable outcome? No, it is not, for two reasons. First of all, the practical reasoning behind work requirements is understandable, but the outcome runs afoul of the political values of conservatism. Those values prescribe a welfare state that focuses its limited resources on providing a basic but dignified benefits package for those who are at the very bottom of the socioeconomic ladder.
When those resources are concentrated to the gainfully employed, the only function the welfare state fulfills is economic redistribution. Since economic redistribution is the end goal of the socialist welfare state, this means that work requirements forcefully transform the welfare state from conservative to socialist.
But does this really matter? Is it not good from a practical viewpoint to use tax-paid benefits to encourage the jobless to get a job?
Yes, this ideological perspective does indeed matter. To see why, let us take a step back and answer the second question.
Suppose Mike and Mary have two kids and earn $4,500 per month (a purely theoretical number used only for the sake of the argument here) which is $1,500 more than the income cap for social benefits. They do not have any social benefits, but they pay an income tax of $500, putting their net monthly income at $4,000.
Joe and Jane do not work. They and their two children are living on tax-paid social benefits. Every month they get $1,500 worth of benefits. When the work requirement reform is implemented, both Joe and Jane get jobs. They each make $1,000 per month; thanks to the standard tax deduction, they pay no income tax on that money.
Together with the benefits, their adjusted monthly income is $3,500.
Before the work requirement reform, Joe and Jane only had $1,500 in income, which means that when benefits and income taxes are counted, there was a $2,500 income gap between these two families. After the work requirement reform, the gap is only $500.
This admittedly stylized example nevertheless captures the essence of the dilemma embedded in work-for-welfare requirements. It raises two problems that conservatives need to consider carefully.
First, the moral or ideological problem. Conservatives often draw a demarcation line between themselves and libertarians by pointing to how libertarians want no tax-paid social benefits whatsoever. This critique of Robert Nozick-based modern libertarianism is correct, but the conservative idea of work requirements leaves those who refuse to take work-for-welfare jobs to fend for themselves.
With work-for-welfare requirements in place, conservatives actually end up with a solution to the human destitution problem: where libertarians on principle want everyone to live off the private sector, work-for-welfare conservatives reward those who work and leave those who don’t to fend for themselves.
Is this really how conservatives imagine their ideology at work?
Second, by giving benefits to gainfully employed low-income families, conservatives engage in the same type of economic redistribution that socialists want, only without having an ideologically concise motivation for it. This makes their workfare reform an ad-hoc foray into welfare-state policy.
As such, it creates incentives that are adversarial to the idea that able-bodied men and women should provide for themselves and their families without handout help from government. In fact, one of the most realistic aspects of our two-family example is that the higher-earning family suddenly finds itself making just a hair more than the family who adds social benefits to their monthly budget.
What if the higher-earning couple decides to reduce their workforce participation? When their income has fallen enough, they, too, get benefits, with the help of which they can climb back almost to where they were before. Shorter work days—or one of them becoming a homemaker—raise their quality of life, thus compensating for their minor loss of income.
For every household that makes the same work-vs-welfare decision, the welfare state loses tax revenue while having to spend more on social benefits.
To make a long story short: conservatives need to think carefully about what they really want with the welfare state. A work-for-welfare does not necessarily deliver what its proponents often say it will.
What conservatives cannot do is leave a walk-over on issues like this. If they do, they leave it entirely up to the socialists to shape the welfare state.
