Libertarians feel the government should get out of the welfare business and leave such efforts up to the private sector. In an article yesterday, Micheal Tanner explains how the government creates unintended consequences with its welfare programs.
Government is creating a massive trapped-in-poverty, welfare-dependant clientele that can be depended on to vote for big government and high taxes. A new Cato Institute study entitled "The Work Versus Welfare Trade-Off: 2013" calculates the dollar value of the combined total of seven benefits that a typical welfare family -- consisting of a single mother with two children ages 1 and 4 -- could receive in all 50 states. The study then compares those benefits with the wages a recipient would need to earn in order to take home an equivalent income.
Studies and surveys consistently show that people on welfare want jobs and want to work. However, government is discouraging this. Government discourages employment first and foremost by destroying millions of jobs and potential new jobs through high taxes and unnecessary regulation. Government also penalizes and discourages work by offering welfare benefits so large that people in many states can make as much or more money by staying on welfare than by getting a job, providing an extreme disincentive to leave welfare and get a job.
The study reports some shocking findings:
* Welfare -- food stamps, housing assistance and other programs -- currently pays more than a minimum wage job in 35 states.
* In 13 states, welfare pays more than $15 per hour.
* In 39 states welfare pays more than the starting wage for a secretary.
* In 11 states, welfare pays more than the average pre-tax first-year wage for a
* In 3 states a person on welfare can take home more money than an entry-level computer programmer.
* In Hawaii, state benefits provide the equivalent of $49,175 per year. To equal the value of those benefits, a Hawaiian would have to take a job paying (before taxes) $60,590. (The higher cost of living in Hawaii must be taken into account when assessing these benefits.)
* Welfare exceeds the Federal Poverty Level (FPL) in 42 states and the District of Columbia. In the District of Columbia, Hawaii, and Massachusetts, welfare pays more than twice the Federal Poverty Level.
* Despite claims from politicians of all stripes that welfare has been reformed (some even say abolished), the study reports that the value of welfare benefits has actually increased in 32 states and the District of Columbia since 1995.
* Considering just the 3 programs that, according to the study, "nearly all welfare recipients" are enrolled in -- Temporary Assistance for Needy Families (TANF, the primary cash welfare program), SNAP (food stamps), and Medicaid -- in 8 states recipients of just these 3 make more than the minimum wage.
Of course, as the study cautions, "Not every welfare recipient fits the profile used in this study, and many who do fit it do not receive every benefit listed."
However, the report sums up: "Welfare benefits continue to outpace the income that most recipients can expect to earn from an entry-level job, and the balance between welfare and work may have actually grown worse in recent years. The current welfare system provides such a high level of benefits that it acts as a disincentive for work."