Following a period of profound economic prosperity, Americans are staring another recession in the face thanks to the Wuhan coronavirus lockdowns. With the next election right around the corner, the economy is on the ballot as voters decide who will best lead us onward after the shutdowns subside. A new study shows a clear path forward. The most important focus? Jobs, jobs, jobs.
The Wisconsin Institute for Law and Liberty has a new study out today analyzing the economic recovery of Wisconsin and other Midwestern states following the Great Recession. Hindsight has revealed the longer-term effects of welfare reform under Republican Gov. Scott Walker, and they’re promising.
Emerging from Wisconsin’s Recession
During the Great Recession, Wisconsin and Indiana became eligible for waivers of federal work requirements for food stamp programs. Walker and then-Gov. Mike Pence, however, chose not to seek these waivers, meaning eligibility for these welfare programs was conditional.
In Wisconsin, beginning in April 2015, in order to qualify for the state’s FoodShare program, residents were required to take part in a job-training program or work at least half time, meaning at least 80 hours per month. Iowa, Missouri, and Indiana employed similar policies. Despite these reforms being contentious, hindsight reveals they were successful in decreasing unemployment, growing the labor force, and increasing work.
At their core, these programs prioritized the worker, founded on the principle that Americans’ lives are better when they have a sense of purpose through a job. By adding work requirements to Wisconsin’s food stamps program, Walker’s administration incentivized Wisconsinites to get back into the workforce and returned their sense of personal agency.
“We’re not making it harder to get government assistance,” Walker told The Federalist in an interview. “We’re making it easier to get a job. And that’s really what it was all about was long-term employment, people pursuing their careers knowing that in the end … true freedom and prosperity don’t come from the clumsy hand of the government. They come from empowering people to control their own lives and set their own destinies through the dignity that comes from work.”
Based on the data, he’s right. According to the study, across Wisconsin, Indiana, Iowa, and Missouri, unemployment declined 0.53 percent on average as a result of food-stamp reform. The Wisconsin Institute for Law and Liberty estimates that since the 2008 Great Recession, these four Midwest states saw an average 0.62 percent increase in the labor force participation rate, with 28,786 people joining the labor force in Wisconsin alone. This figure denotes the number of able-bodied people who are actively working or seeking employment.
Walker’s administration believed that welfare programs, although necessary, should serve as a trampoline, springing people back on their feet, rather than a hammock.
“If you make it easier not to work, not everybody, but some people are going to take that path of least resistance, which is not only not good for the taxpayers,” Walker said, “but it’s ultimately not good for the person because they’re better off controlling their own destiny and not being dependent on the government.”
Jobs, Jobs, Jobs
This same focus on workers should guide America’s policy response to the COVID-19 recession, according to Walker. On top of welfare reforms, the former governor said the Paycheck Protection Program is promising because “it’s really about keeping people working. It’s not about helping the business itself.”
“I think one of the most important things government has done at any level has been the Paycheck Protection Program — I think things like that where they don’t just give money to businesses but they tied it directly to keep people staying on the payroll,” Walker said. “I don’t like picking and choosing winners and losers. I don’t like bailing out businesses. But what was unique about the Paycheck Protection Program — and I think elected officials in both parties should be supportive of it — is it’s tied directly into giving an employer assistance but only if they, in turn, have to keep people on the payroll.”
While the former governor was encouraged by worker-centric government responses like the PPP, he also identified problems in our COVID-19 response, namely the government’s tendency to impose serious restrictions and lockdowns without articulating a rationale.
“The biggest problem I’ve had with elected officials … is I think too many government leaders at many different levels — local, state, and even some at the federal — have rushed out to tell people what to do, but they have done little to nothing to explain why,” Walker said in a rebuke to the elitism of the nanny state. “I still felt early on we could have limited the amount and the length of the shutdown of businesses if we’d spent more time talking about why certain things were necessary,” such as wearing masks and social distancing.
Like parenting, Walker said, once your kids get older, if you only tell them what to do and not why, they’re either not going to do what you tell them, or they will stop doing it when you’re not around. Freedom, paired with an explanation, is important.
Our Best Chance for Recovery
In just over a week, Americans must cast their vote for who will lead us into coronavirus recovery. Considering the problem of this elitist authoritarianism and the importance of getting people back to work, the choice seems clear.
President Donald Trump and former Vice President Joe Biden laid out clear and starkly contrasting visions for life after the election. While Biden warns of a “dark winter” and promises masks and further lockdowns (not to mention his pledge to eradicate the oil industry, which employs more than 600,000 people in the United States), Trump says, “We’re learning to live with it. We have no choice. We can’t lock ourselves up in a basement. … We’re opening up our country.” Like Walker, the president understands the importance of getting people back to work:
We have to open our country. We’re not going to have a country. You can’t do this. We can’t keep this country closed. This is a massive country with a massive economy. People are losing their jobs. They’re committing suicide. There’s depression, alcohol, drugs at a level that nobody’s ever seen before. There’s abuse, tremendous abuse. We have to open our country. I’ve said it often, the cure cannot be worse than the problem itself, and that’s what’s happening. And [Biden] wants to close down. He’ll close down the country if one person in our massive bureaucracy says we should close it down.
The difference is “night and day” between how Trump and Biden would handle the economy, Walker noted. Unlike Trump, Biden wants “significant tax increases, major new regulations, higher cost for energy — those things would be job-killers at a time when, now more than ever, Americans need to just get back to work.”