Welfare pays more than a minimum-wage job in 35 states
Looking for a good paying job? Well, look no further.
No, really, stop looking. In 35 states, welfare benefits pay more than a minimum wage job, according to a new study by the libertarian Cato Institute, and in 13 states welfare pays more than $15 per hour.
“One of the single best ways to climb out of poverty is taking a job, but as long as welfare provides a better standard of living than an entry-level job, recipients will continue to choose it over work,” said Michael Tanner, senior policy analyst and co-author of the study.
Why Work for $7.25 When Welfare Pays $15.00 in 12 States and $8.00 in 33 States? Is a Low Minimum Wage the Problem?
Michael Tanner at the Cato Institute notes Welfare Pays Better than Work in 33 states.
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.
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.
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.
People Aren’t That Stupid
While it’s beneficial to have a job, assuming there is hope of advancement, for those with no special skills there is little to no hope of advancement.
Moreover, wages are taxed, welfare benefits are not. And what about day-care costs for single mothers? What about transportation costs? What about the value of extra leisure time?
Add it all up and it makes perfect sense for many to remain on welfare for as long as they can.
Minimum Wage Fallacy
Given welfare benefits exceed minimum wage, it should not be surprising to find socialists arguing for higher minimum wages. And they are.
In Seattle, a Campaign Seeks to Push Minimum Wage to $15.
How successful would that be?