America’s New Labor Theory Doesn’t Work


By James Whitford and Scott Centorino for RealClearPolicy

“I wandered the streets aimlessly, never knowing where my next meal would come from.”

This is how a man named Riley summed up that he was homeless, dependent, and unemployed before coming to Watered Gardens, a mission in southwestern Missouri.

After spending time in our long-term recovery program, Riley worked as a warehouse manager at a grocery store for over a year where he now has “hope, security and stability. I can pay for my food, my rent and my health insurance. I no longer have to wonder if I will be able to meet my basic needs. It is a liberating experience.

Riley has learned a lot in our program, and he is just one of many whose lives have been transformed by the power of work. But we didn’t tell him about two trendy economic theories that have a moment — and a calculation.

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The first theory – that no amount of money printed and spent can cause real problems because the government can always raise taxes on the middle class to pull devalued money out of the economy – or Modern Monetary Theory (MMT ), is the theory with the more established nomenclature and well-known proponents like Congresswoman Alexandria Ocasio-Cortez (NY-14).

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Congressman John Yarmuth (KY-3), Chairman of the House Budget Committee, summed up MMT well in a public hearing, telling us that we shouldn’t think of the national debt as debt at all, but rather as our “total investment”. It’s dangerous – and wrong.

The second related theory does not yet have a name. But he deserves one because he could be even more dangerous in the long run.

We call this modern labor theory.

In a nutshell, the theory is that the well-being of able-bodied adults can be disconnected from work without consequences. After all, work requirements for programs such as child tax credits, food stamps and Medicaid are simply “low-income restrictions,” according to Sen. Sherrod Brown (D-OH).

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Of course, you don’t have to have a degree in economics to know that work is not a restriction at all. And it’s more than the best route out of poverty. It is a powerful force for dignity and independence.

Riley has experienced it first hand. And that’s why modern labor theory is so wrong.

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We cannot separate pay from work without wreaking havoc on our people, our families, our communities and our economy.

A pastor from Kansas recently wrote to us about generational poverty saying, “The root cause is not lack of money” but “ease with [which] they can live off the system. He sees firsthand the damage done by welfare programs that pay people as much money as a job would.

Unfortunately, this Kansas pastor’s experience is not unique. For millions of Americans, welfare pays After only work. Unfortunately, the pastor’s observation that “the temptation is to make the system work rather than work for real” plays out family after family.

After two years of COVID-19 policies, this is no longer the personal temptation of individuals. This is the economic policy of our country.

Modern labor theory isn’t just about well-known pandemic policies like stimulus checks, child tax credits, and unemployment bonuses that aren’t tied to work. It is also about eliminating work requirements in food stamps and spending almost 90% of money for employment and training programs on costly bureaucracy rather than participants, while increasing the 25% benefits.

Add all of that to disability programs open to many Americans who could be working and longstanding policies that don’t require valid welfare enrollees on Medicaid or public housing to work, train, or work. volunteering (even part-time) and it’s easy to see why the temptation to stay on welfare is so great.

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Even before the pandemic and the “Great Resignation,” our labor force participation rate was lower than it was a decade earlier, at the height of the Great Recession.

It’s not sustainable. America can’t work if Americans don’t work.

Modern labor theory does more than kill the engine of our economy by devaluing workers. It kills the soul of our people by devaluing work. It literally destroys lives.

If we forget what Riley said about work, that “it’s a liberating experience” and not a “restriction,” we won’t have an economy worth saving. Freedom to work is not a question of salary. It’s the realization that you can win one.

Syndicated with permission from Real Clear Wire.

James Whitford is the executive director of Watered Gardens Ministries, a mission in Joplin, Missouri, and the True Charity Initiative. Scott Centorino is a senior fellow at the Foundation for Government Accountability.

Opinions expressed by contributors and/or content partners are their own and do not necessarily reflect the views of UKTN.


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