Tuesday, January 10, 2017

My Absolutely Unscientific Research: 500+

In the Polish election last autumn the winning party, PiS, took control, some say thanks to its election promise of the 500+ program. The 500 Plus program works like this: a benefit of 500 PLN is paid to families for the second child plus any additional children after that. We are not talking only about new births, but also existing children. So if you have 3 children, you should receive 1000 PLN monthly (0 for the first child + 500 for the second child + 500 for the third child = 1000 PLN). If the family income falls under a certain amount, that family gets the benefit for all the children. Receiving the 500+ does not affect other benefits a family might receive from other institutions. In comparison, the minimum wage is/was 1850 PLN gross and is due to rise to 2000 PLN gross as of January 2017. That is the monthly payment for 40 hours per week.


Some call it a social program. Some call it a handout. Some call it a lifesaver while others call it vote buying. No matter our feelings about it socially or morally, we must remember its effect economically. The government is not paying people from its own money. The government’s money is our money. And according to the latest proposal of the government, my family’s taxes are due to go up next year about the amount of 2x 500+. Somebody has to pay for it, right? Perhaps they could take it from the Smolensk commission budget.

I don’t believe there are any comprehensive studies at the moment on the effect of the 500+ so I have done some independent and completely unscientific research…in my village. A couple of years ago, I talked to a neighbor lady, they call her Fat Kasia which I find unnecessarily cruel as she is the only adult Kasia in the whole village. Anyhow, we were chatting at the village shop as you do when you are in the village. From the contents of her shopping of flour, potatoes, white cheese, and cigarettes, I gathered that Kasia was planning to make a batch of pierogi for the weekend. She lamented greatly at the cost of everything on their one salary and how unfair it was that the furniture factory didn’t pay her husband his salary on time. I agreed that not getting paid on time certainly wasn’t fair indeed, but I also inquired as to her interest in getting a job, you know, to take the pressure off. There were plenty of job offers at the new sawmill just 2 kilometers away. Kasia could not hide her shock and dismay at my inquiry. “I have a child!” she exclaimed. “I have two!” I exclaimed back. Nobody was judging. Nobody was offended. It was just a difference in our vision of our own lives. Over the next couple of weeks and over a few more conversations, Kasia decided to try to get a job at the sawmill. Her child was 8 years old then, and they lived meters from the school doors. And guess what. She got that job. That first Christmas Kasia had as an employed person was as she put it herself, “the best they’d ever had”. She was pleased to have the job, the possibility of paid overtime on Saturdays if she wanted, and a pleasant holiday season without the usual financial stress from years past.

Then Kasia got pregnant with their very much wanted second child. I met her a few times in front of the shop, her pregnant belly standing in stark contrast to the cigarette she had in her hand. My look must have spoken volumes because she later said to my husband, “What? I quit drinking at least.” Kasia had her baby about a year ago. I still meet her in front of the shop, baby in one hand, baby bottle of Kubus and cigarette in the other hand. Kasia is not going back to work. She’s decided that it doesn’t pay. Even though she would not lose her 500+ benefit. Even though the sawmill offered her a part-time job to start back. Even though her mother offered to babysit those 4-5 hours a day while she’s at work and cook dinner for the family. Even though she’d get a bit more than 1000 PLN a month from her employer, another 500 from the 500+ program, and secure her job position if she decided to return to full-time. It’s just not worth it to her. I’ve read a recent report that says there is absolutely no evidence that people are dropping out of the workforce due to the 500+ benefit. I find that hard to believe as most of us know at least one person and in my case several people who have done just that.

It is no surprise that money we get for nothing has a higher value than money we get for doing something, for example working - especially for someone earning minimum wage, having small children, and needing to travel to and from work each day. Transportation, good winter attire, childcare – it can cost you a significant part of your salary just to earn that salary. That wasn’t the case for Kasia, but yet she still decided not to go back to work. I returned to work relatively quickly after having each child. I was in fear of losing my contracts. There was a time when I did not even earn my ZUS payment (Social Security), not to mention my transportation costs or the babysitter, but I had to do it in hopes of a better future.

Continuing my unscientific research, I have been chatting with the local shop owner. Our village has a population of about 500 people. We have a primary school, a public library, a doctor’s office, a fire station, a chapel, and one shop. Our shop has got the basics, and as you can imagine, the shop is more expensive than the discount shops in the next town over. I don’t really think twice about the cost when I’ve got a kid on the toilet, and I’m running to Mr. Mariusz to buy toilet paper. (It happens more often than I’d like to admit.) The next town is only 7 kilometers away, but without a car, that’s too far for some locals to do their shopping. I inquired if Mr. Mariusz had noticed any changes in local shopping behavior since the 500+ payments started a few months ago. He has noticed some changes. He said some people came in and settled their credits (the infamous zeszyt) immediately, knowing that Mr. Mariusz knows that they got their money. Some people stocked up on the basics, perhaps enjoying the feeling of a fully-stocked kitchen cupboard for the first time in a long time. One lady has done a reverse-zeszyt by giving Mr. Mariusz all the 500 and deducting her shopping from there each time. She allows her husband 100 of the money on the zeszyt for his beer and cigarettes, and not a grosz more. It appears that women are in charge of budgeting that money. Mr. Mariusz has also reported that sales of beer and cigarettes has gone up significantly. He stopped selling hard alcohol some years ago as some of his customers were quickly drinking themselves in unconsciousness outside the shop doors.

What have I noticed? At the start, new trampolines and bikes appeared in our village. Cartons of cigarettes replaced packs or cigarettes. In some cases, packs of cigarette have replaced homemade cigarettes. This year there were not scenes in the front of the shop about a father drinking all the public benefit the kids got for school shoes. I’m not saying that money was not drunk, but there was an additional source of income to buy shoes from. We’ll find out this winter if we have similar scenes of selling the public benefit coal for cash and then stealing wood from other neighbors as it was last year.

Talking to my neighbors and friends in the village, many of them say they voted solely for that 500+ program. They have the knowledge that it most certainly is detrimental to the economy and they don’t care. One family has got one little kid at home and two teens in the orphanage. Since the 500+, they have been trying to get their kids back from the orphanage. They didn’t lose them because they were poor, but because their behavior prevented the kids from going to school. The kids don’t want to come back, not even so the parents can get the 500+ benefit for them. At the orphanage they have clothes, food, school books, a computer room, and basic cell phones. Smart kids.

What about people like me? The ministers were happily talking about people like me who could now afford extra music or language lessons for their children, invest in their kids education. I even saw a car today with a bumper sticker that said “Financed by 500+”. I am now aware that in the new year I will most likely be in the minus and not the plus with this plan. No cóż. Co robić?


Little Dorrit said...

This is all really sad. We came to Poland from Ukraine for a better life. Well, it is better, but with politics like this, I don't think the better will last.

Chris said...

Little Dorrit - Let's hope it is a temporary situation and that we are able to dig the country out of this debt before it is too late. Thanks for commenting and welcome to Kielbasa Stories 😊

Stardust said...

Well it's the mentality. Look how many Poles immigrate to other European countries with good social benefits and make a living by having children. Three, four it's quite normal and then they are outrage that natives call them names.
As long as you can get pregnant and give a birth, for some it's a great business and recipe for easy living.

Dane Prywatne said...

Let me give you another perspective of the same facts that you see.

It is overestimated how much important is good of current economy when compared to other goods society lives from. More or less it comes that way: our civilization has gained a lot of goods by extending one of 3 economy factors (workforce, money, tools) - the workforce - almost twice - by allowing women to work. It is simple like that - we have a lot of workforce, but there is a substitute cost for society, which is namely: women who joined workforce, ceased to produce other goods that are as valuable as their job for society. Number one is: kids.

Therefore as demand and supply law says - what is in less supply in society will have higher price. Therefore - society puts higher price to women who will bear kids and lower to women who will work and we have a symptom of that: paying women to have kids instead of working.

Now the basic problem is, that society expect each women to have 3+ kids (which is - to have a growth of population) .. that cannot be easily reconciled with a career other then .. housewife. So society will pay for women who are ready to make a career of housewife a price that is equal to what is worth. For now price is 500/kid (more or less) and if it will not be enough - we will have to increase it (again supply/demand).

Now lets see fat Kasia fate - she can either be used by society with a easily robotized, no-demand, physical work or be paid for high demand mother-ship work. With her limited genetic & social talent/skill she is barred from better jobs, so best career for her will be to have kids, best multiple kids. And believe it or not - society will reward her for being good mother, then for being obedient blue collar. At least good, reasonable society, not that stupid, distorted kind of society you got in the West.

As to economy in long run - having shrinking population is detrimental to economy, so much that Germany is estimated to have exactly NEVER AGAIN GDP growth in foreseeable future. Shrinking population by half - gives you half GDP .. it is half consumer base, half workforce base - in just 30 years. So any gain from women in work you can shove up xxxxx ... it is incomparable to long run GDP loss.

The only reason you are having problems is: that kind of career is barred from you for economic reasons - you can get much more money by working then by being a mother with current offer, for which reason you are feeling discriminated - moreover discriminated in compare to person you feel better then (Kasia). That is big cognitive dissonance that brings aggression and stops you from thinking level headed of what is going on.

A agree with you - you are discriminated and it is no good for society that more intelligent women will have less gains from 500+ then less intelligent women, just because intelligence is inherited.

The solution for that is not removing 500+, the solution is not to pay equally to every women but to pay more to women who are more intelligent, more resourceful - but it is very hard to do that from political point of view.

If I count - I would vote to increase 500+ to 1000+ only for women of IQ 100+ with higher education ..

slawekk said...

This (Dane Prywatne) is a typical opinion from the state apparatus point of view.
Indeed, from this point of view women (or in general - subjects of the state) should be incentivized to do what is better for the state (apparatus) - in this case produce more subjects, instead of providing low-level (i.e. low-tax) labor.

For example:

> having shrinking population is detrimental to economy [because] Shrinking population by half - gives you half GDP

From the individual point of view the target is to optimize GDP per capita, on which the size of population has no effect.
From the individual point of view values like self-realization (what women want to do) also play a role. These values are irrelevant for (or contrary to) the state apparatus interests.

The paradox is that widespread thinking in terms of the state apparatus interest makes it more difficult to build a prosperous state. Or prosperous society if you prefer to call it that way.

> good, reasonable society, not that stupid, distorted kind of society you got in the West

Could you provide some examples of good, reasonable societies?
If you can't, notice that you should not compare things that exist to those that don't.

Dane Prywatne said...

My replay is both to apparatus vs individual point of view and good reasonable society.

In general -if goes back to conflicting interest vs aligned interest of apparatus and individual - good reasonable society is one that has non-conflicting general interest of both government apparatus and majority of individuals. As result such society is designed to grow and enrich.

If too many interest are conflicting between individuals themselves and between individuals and government - there is a resulting fractional fight in society, that may degenerate into revolution (like France XVIII of Russia XX) or decadence (like we see now).

If you look back for example of good, reasonable society - seek for growing and increasing in strength societies. Good example would be South Korea, Japan (XIX century), US (XIX century), Poland (XV-XVI) century. Maybe Poland XXI century - especially when compared to other, more decadent societies.

"From the individual point of view the target is to optimize GDP per capita" true, "on which the size of population has no effect" - not true - demographics structure is a god to GDP per capitia.

See this film, to understand how world and its demographics result in growth of failing of societies, what is the role of kids, yound, adult and old people in society and so on:


Dane Prywatne said...

This one is better prepared (with presentation): https://www.youtube.com/watch?v=pyfVTBI4dgA

Chris said...

Dane Prywatne - It is very possible to be a good mother and have a successful career. Kasia has not decided to have more children in light of the 500+. She's just decided to not go back to work even half time which is in her economic interest. Her employer has found a replacement for her and several such former employees as a few fathers in our village have opted to not work as well. Quite a few of the replacements are Ukrainian. The economy moves on.

Chris said...

slawekk- I, too, am looking for such a society.

Our local sawmill is prospering I have to say. I guess that's the broader view. Kasia's job is no longer waiting for her, but her job is being done, wood is being processed and sold. Life goes on.

slawekk said...

Dane Prywatne - you say > Good example would be South Korea, Japan (XIX century), US (XIX century), Poland (XV-XVI)

From the individual point of view a good test of good, reasonable society is to ask a question - "How would I like spending my life as a random member of that society?"

Take Poland (XV-XVI). You may fantasize about being a magnate, but really you would have about 70% chance of being a serf. You seem to be impressed by power, but is it to the extent that you would enjoy being someone's property?

As for contemporary South Korea, it passes the test for me. But I suspect that it is on your list by a mistake - you just don't know how "decadent" this country is. For example the fertility rate in South Korea is 1.3 births per woman. This is the same as in Poland, and less than in Japan (1.41) and Germany (1.38).