Individualized anti-poverty services are way more expensive than just giving people cash or food stamps, and creating such services would inevitably expand the administrative demands on any social program or limit the number of people who could be served.
Consider, as a hypothetical, the food stamp program, which Ryan thinks should require people to work as a condition of receiving the benefit (ignoring, for the moment, that nearly 60 percent of working-age adults getting food stamps already work). More than 40 million Americans get food stamps. Providing all them with a hand-holding caseworker with whom, under Ryan’s plan, they’d draft long-term plans and contracts outlining their responsibilities and goals before they’d be allowed to eat, would require a fleet of roughly more than 700,000 social workers, assuming a reasonable caseload of about 55 clients per caseworker. Social workers don’t make much money, with a median salary of about $44,000 a year. Even so, 700,000 of them would cost more than $30 billion a year, not including benefits. That’s nearly 40 percent of what the country currently spends on food stamps and nearly twice the entire federal welfare budget. By comparison, the current food stamp program delivers 92 percent of its funding directly to people in need; only 5 percent goes to administrative costs.
Here are some numbers that aren’t hypothetical: As part of its welfare reform overhaul, the state of Nebraska for several years attempted to do what Ryan seems to be proposing. Masters degree-level social workers, with tiny caseloads, delivered intensive personalized services, including home visits, to a group of welfare recipients, including a batch of extremely hard to employ single mothers. They attempted to get the women into the workforce and self-sufficient for the long haul.
The program produced better results than any such program ever had. Almost half of the study participants went to work for at least a year, double the rate of the group without the individualized attention, and their earnings increased significantly. The clients who got the individual casework were less depressed, less likely to lose custody of a child, and more likely to receive child support. But they still faced food and housing hardship; they were still poor, if working poor. And again, only half the study participants went to work.
Providing all those individualized services cost the state $8,300 per client—so much that researchers who evaluated the program concluded that the “benefits to society did not outweigh its costs during the study.” The researchers speculated that if the successful program participants stayed employed for another two years, the effort might pay off, but individually helping these folks cost about $5,000 more than what those clients earned by entering the workforce.
The families might have been ended up in a slightly better place, at least for a while, but the state of Nebraska would have been better off writing them a $5,000 check and calling it a day.