Fact: Welfare Does Pay Better Than Work

Based on a new study by the CATO Institute:

Here’s an offer for you: $38,004 per year, tax free.No work required. Apply at your local welfare office.

The federal government funds 126 separate programs targeted towards low-income people, 72 of which provide either cash or in-kind benefits to individuals. (The rest fund community-wide programs for low-income neighborhoods, with no direct benefits to individuals.) State and local governments operate more welfare programs.Of course, no individual or family gets benefits from all 72 programs, but many do get aid from a number of them at any point in time.

Today, the Cato institute is releasing a new study looking at the state-by-state value of welfare for a mother with two children. In the Empire State, a family receiving Temporary Assistance for Needy Families, Medicaid, food stamps, WIC, public housing, utility assistance and free commodities (like milk and cheese) would have a package of benefits worth $38,004, the seventh-highest in the nation.

While that might not sound overly generous, remember that welfare benefits aren’t taxed, while wages are. So someone in New York would have to earn more than $21 per hour to be better off than they would be on welfare.That’s more than the average statewide entry-level salary for a teacher.

Plus, going to work means added costs such as paying for child care, transportation and clothing.Not to mention that, even if it’s not a money-loser, a person moving from welfare to work will see some form of loss — namely, less time for leisure as opposed to work.

Is it any wonder, then, that, despite the work requirements included in the 1996 welfare reform, only 27.6 percent of adult welfare recipients in New York are working in unsubsidized jobs?(Another 13 percent are involved in the more broadly defined “work participation,” which includes job search, training and other things.)

Welfare is slightly more generous in Connecticut, where benefits are worth $38,761; a person leaving welfare for work would have to earn $21.33 per hour to be better off.And in New Jersey, a worker would have to make $20.89 to beat welfare.

Nationwide, our study found that the wage-equivalent value of benefits for a mother and two children ranged from a high of $60,590 in Hawaii to a low of $11,150 in Idaho. In 33 states and the District of Columbia, welfare pays more than an $8-an-hour job. In 12 states and DC, the welfare package is more generous than a $15-an-hour job.

No incentive for those on welfare to get off of it, especially since the “progressives” keep telling everybody that the American dream is dead.

Full study here.

12 thoughts on “Fact: Welfare Does Pay Better Than Work

  1. And the Lusty Lady, San Francisco’s only unionized strip club, is closing its doors. So there will now be even more single moms on the dole.
    I wonder if the union’s insistence that retention be based on seniority vs merit didn’t have an adverse effect on profits?

    • Greg, I’ve never been involved in a union, but my father was during the 60’s and 70’s (electrician’s union). He absolutely hated the unions.

      • I haven’t had many interactions with unions; I was the only scab at the Teledyne plant here. I finally joined when contract time cane around, and they closed the plant.
        I met an organizer for the Teamsters, he was straight out of central casting, every cliche rolled into one sleazy, venal, corrupt package

        • It’s pretty clear that while some Unions have or have had their benefits in the past, contemporary Unions have created an avulsion fracture with the needs of their membership’s well being, and that of the employers who would provide the labor opportunities the Union’s need for their very existence.

          That pugilistic attitude seems somewhat self defeating, if you ask me.

          • My cousin talks about her church having the Jezebel spirit, by which she means that the leaders of the congregation are more worried about their continued leadership and power than they are concerned with the mission of the church.
            I see parallels to the Jezebel spirit in many organizations and fields, unions no less than others.

    • Welfare isn’t just food stamps Karl. They also receive a cash stipend as well as assistance with housing and utilities. Perhaps if some of them didn’t spend the money on drugs, they’d have enough for an oil change…or here’s an idea, it only costs about half if you go to the auto parts store and buy the stuff to do it yourself.

Talk Amongst Yourselves:

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.