Welfare Pays More Than Minimum-Wage Work

[Michelle]

Since 2009, the

Fair Labor Standards Act has dictated that the federal minimum wage is $7.25 an hour. Some people think that’s too low; others think it’s too high. But it turns out that, in 35 states, it’s a better deal not to work—and instead, to take advantage of federal welfare programs—than to take a minimum-wage job. That’s the takeaway from a new study published by Michael Tanner and Charles Hughes of the Cato Institute.

“The current welfare system provides such a high level of benefits that it acts as a disincentive for work,” Tanner and Hughes write in their new paper. “Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit,” which offers extra subsidies to low-income workers who take work. “In 13 states [welfare] pays more than $15 per hour.”

cont....http://www.forbes.co...k-in-35-states/

Edited October 15, 2013 by Michelle

[Leonardo]

Some questions I'd like to ask regarding the study:

Do all the States in question pay the Federal minimum wage as a State minimum wage?

Do all the welfare beneficiaries actually claim what was calculated by the study authors as claimable?

What is the actual average "entry level annual salary" in those 35 States compared to the actual average annual benefits package claimed?

[Beany]

Some questions I'd like to ask regarding the study:

Do all the States in question pay the Federal minimum wage as a State minimum wage?

Do all the welfare beneficiaries actually claim what was calculated by the study authors as claimable?

What is the actual average "entry level annual salary" in those 35 States compared to the actual average annual benefits package claimed?

I can answer the second question: no. This is per a discussion about this study on NPR I heard and from my 9 years working for the Welfare Department administering cash aid, food stamps, and MediCal. If we want people off welfare, pay them a living wage. Cash aid & food stamps are based, in part, on earnings. If a family's income exceeds the income limit, then they are no longer eligible for cash aid or food stamps. And trust me, 90% of those people would be very happy to get off welfare. They're happy it's there when they need it, but they'd rather not need it.

Edited October 15, 2013 by Beany

[Michelle]

I can answer the second question: no.

That's right...a lot of states have a higher minimum wage. The Federal minimum wage must be met in all other states.

http://www.minimum-wage.org/wage-by-state.asp

Edited October 15, 2013 by Michelle

[Rafterman]

Since 2009, the

Fair Labor Standards Act has dictated that the federal minimum wage is $7.25 an hour. Some people think that’s too low; others think it’s too high. But it turns out that, in 35 states, it’s a better deal not to work—and instead, to take advantage of federal welfare programs—than to take a minimum-wage job. That’s the takeaway from a new study published by Michael Tanner and Charles Hughes of the Cato Institute.

“The current welfare system provides such a high level of benefits that it acts as a disincentive for work,” Tanner and Hughes write in their new paper. “Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit,” which offers extra subsidies to low-income workers who take work. “In 13 states [welfare] pays more than $15 per hour.”

cont....http://www.forbes.co...k-in-35-states/

I think part of the problem is that we've created an entire generation of folks where living off of programs such as this is perfectly fine for them. Sure, they'll never be wealthy, but they'll never be truly poor either. Doing OK is fine for an increasing number of Americans.

I read a study done in Pennsylvania a year or so ago that looked at a typical family of four and determined that by taking advantage of every single program available to them, they could "make" the equivalent of approximately $55K a year. Not rich and not destitute, but for some being in that situation is adequate. And throw in a little cash-under-the-table job and life in front of your X-Box having never to get out of your pajama pants is a pretty good deal.

There used to be this belief that you did whatever it took to better yourself and provide for your family. That it was your obligation to ensure that the next generation did better than you did - better education, better opportunities, more successful, etc. etc. and the idea that you would have to rely on the government for your well being was simply antithetical to your existence. Unfortunately there's a growing number in the US that have lost that drive.

[ninjadude]

The current welfare system provides such a high level of benefits that it acts as a disincentive for work,” Tanner and Hughes write in their new paper. “Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit,” which offers extra subsidies to low-income workers who take work. “In 13 states [welfare] pays more than $15 per hour.”

Michelle! I would have never thought you would have posted something that clearly shows the minimum wage should be raised. Welcome to the "dark side"

[questionmark]

Michelle! I would have never thought you would have posted something that clearly shows the minimum wage should be raised. Welcome to the "dark side"

There also is another possibility: She posted it because she thinks that people should get less food stamps. Not that having less to eat will make them find a non-existent job any faster...

[Myles]

I'd be fine with raising the minimum wage a little. Very little though. Maybe up to $7.50 or $7.75.

Any more and you are affecting those making a few dollars more than minimum.

[Gunn]

There also is another possibility: She posted it because she thinks that people should get less food stamps. Not that having less to eat will make them find a non-existent job any faster...

More like resort to more extreme measures instead. I've seen it happen in the past. It ain't pretty what some will do just to have a little more to eat.

Edited October 15, 2013 by Purifier

[lightly]

..Unless your job is half a mile from the bus stop.. the cost of commuting to a minimum wage job hurts a lot of people. Especially all of the expenses involved in owning and operating an automogasabile .

[+and-then]

This issue is soon going to take care of itself. I firmly believe the bottom is going to fall out in a BIG way and those who are gaming the system are going down just like the rest of us. Some people need the help, some are stealing it and some are dying without it due to their pride. I just wonder what the new system is going to look like. This old one cannot survive. A reboot - the ULTIMATE haircut... it's coming.

[Michelle]

Michelle! I would have never thought you would have posted something that clearly shows the minimum wage should be raised. Welcome to the "dark side"

Why not? Is it because I hate it when people scam the system? Or that some women keep having babies to increase their benefits with no intention of ever being an actual parent or being a productive member of society? That they raise their children to believe this is a perfectly acceptable way to live their lives and don't encourage them to better themselves which perpetuates a welfare lifestyle?

Well, for the people who don't think they are owed a living and actually get out there and try, however unskilled they may be, I do think the minimum wage should be raised in proportion to the cost of living.

Great post, Rafterman.

[Babe Ruth]

If companies are not morally driven to provide their workers with a living wage, a decent wage, then I suppose it would fall to the government to step in to correct the situation.

Not that I see the government as the solution to many problems, but what else to do?

It is hard enough for one person to support himself working for $8 an hour, much less a family.

The gap between rich and poor grows daily, and in the process the once great American middle class has vanished.

[Mantis914]

I can answer the second question: no. This is per a discussion about this study on NPR I heard and from my 9 years working for the Welfare Department administering cash aid, food stamps, and MediCal. If we want people off welfare, pay them a living wage. Cash aid & food stamps are based, in part, on earnings. If a family's income exceeds the income limit, then they are no longer eligible for cash aid or food stamps. And trust me, 90% of those people would be very happy to get off welfare. They're happy it's there when they need it, but they'd rather not need it.

90%?? Tell that the people I see driving brand new Mercedes, Chargers, Lexus and then going to the grocery store and buying 2 carts of groceries on an EBT card... I'm sure they like it just as it is...