Thursday, July 24, 2014

Family Leave Insurance No “Success” for Those Who Don’t Want It

New Jersey instituted Family Leave Insurance (FLI) five years ago. The program provides monetary benefits for up to six weeks for workers to “bond with a newborn or newly adopted child” or to “care for a family member with a serious health condition.” The “insurance” program is paid for through a payroll tax on employees, and works similar to unemployment “insurance.”

Now proponents of the program want FLI to go national, and the Obama Administration is apparently considering it. Economist Eileen Appelbaum notes that NJ’s program was “a topic of discussion” at President Obama’s recent White House Summit on Working Families. In support of FLI, Appelbaum notes that the program costs NJ workers a “small” amount—”no more than 60 cents a week”—and cites surveys of employers “proving” that the program is not economically damaging.

I left these comments:

The fundamental question is: Is the Family Leave Insurance (FLI) program moral?

Morality is a code of principles to guide a person’s choices and actions. By taking $0.60 a week from the worker’s paycheck, the government is depriving that worker of deciding for himself how best to spend that 60 cents. FLI is immoral.

It’s only 60 cents a week? Morality is not measured in dollars and cents. Polls and statistics “prove” that FLI works? It doesn’t work for the people who responsibly follow the age-old investment advice to set aside money for personal emergencies, and thus may not want to pay that 60 cents. FLI may “work” for those who don’t or can’t save. But that’s only because they receive the unearned from other people who don’t need FLI to cover emergencies.

Every individual has a moral right to manage his financial affairs according to his own judgment. FLI is a forced redistribution program; i.e., a form of theft. Regardless of the amount—and leaving aside that government programs, once established, tend to grow like malignant cancers—it’s simply wrong to forcibly take money from those who earned it and hand it over to those who didn’t, whether it’s done by private individuals or government officials.

If FLI proponents want to create a true insurance program—meaning, a private program based on voluntary contributions from willing workers—it is their right and the right of workers who want to pay for the insurance. But the social do-gooders behind schemes like FLI have no right to pick the pockets of unwilling workers to make it “work.”

Appelbaum rationalizes FLI based on America being a “wealthy nation,” as if that wealth is hers to distribute. It is not. Wealth doesn’t belong to the nation, as if America is a primitive tribe whose members wait for its political tribal chiefs to dole it out. Wealth belongs to individuals who earn it. The government should never be the hired gun of any covetous group that would plunder their fellow man.

I mentioned that people should save for emergencies. This raises the objection: It’s so hard for people to make ends meet these days, many people can’t save. Don Watkins at Voices for Reason raises an interesting point regarding making ends meet. In answer to the question, Why are so many twenty-somethings still living at home?, Watkins replies:

[There is] a direct and enormous redistribution of income from the young to the old. I refer to the old-age welfare programs, Social Security and Medicare.

The biggest tax young Americans pay is their payroll tax, which amounts to 15.3% for both Social Security and Medicare.

Then there is Medicaid, food stamps, college grants, etc. On the NJ state level, we have aid to local school districts, funded by the income tax, property tax “rebates” for poor and elderly homeowners, and sundry other subsidies for the needy.

When you add that $0.60 to all of the other government programs designed to “help” pay for others’ needs—all funded by taxes—is it any wonder why it just keeps getting harder and harder to make ends meet, which then leads to more people with needs to fill, which leads to the next government program, which makes it harder to make ends meet, leading to the next needy group to emerge? It’s a vicious cycle of widening poverty and government dependency.

Welcome to the Welfare State.

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