Springboards & quicksand
If you don't want to work, the good news is that a new study by the Cato Institute, “The Work Versus Welfare Trade-Off, 2013,” shows that welfare currently pays more than the minimum wage in 35 states, even figuring in the Earned Income Tax Credit that subsidizes low-income workers.
The study reveals that welfare in 13 states and Washington, D.C., pays more than $15 per hour — double the national minimum wage.
Not surprisingly, the study's authors, Michael Tanner and Charles Hughes, a senior policy analyst and a research assistant at Cato, respectively, conclude that the current welfare system acts as a “disincentive to work.”
Tanner and Hughes report that welfare's work disincentive, the government-erected impediment to getting on the first rung of the occupational ladder, may actually be getting worse: “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 actually have grown worse in recent years.”
Similarly, Tanner and Hughes report that a previous Cato study published in 1995, “The Work vs. Welfare Trade-Off,” found that the dollar value of a typical welfare recipient's full package of benefits in all 50 states and the District of Columbia significantly exceeded the poverty level, as defined by federal government standards.
The ironic and unintended product of this ill-designed system is an anti-poverty program that expands poverty and encourages dependency by dissuading people from entering the workforce in entry-level jobs.
The government, in short, is discouraging the precise behavior that is the key step in most people's upward mobility — the willingness to work, the eagerness to become independent and self-sufficient, even if it means starting at the bottom.
Or as Tanner and Hughes put it: “There is little doubt that one of the most important long-term steps toward avoiding or getting out of poverty is taking a job. Only 2.6 percent of full-time workers are poor, as defined by the Federal Poverty Level standard, compared with 23.9 percent of adults who do not work. Even part-time work makes a significant difference; only 15 percent of part-time workers are poor. And while many anti-poverty activists decry low-wage jobs, a minimum-wage job can be a springboard out of poverty.”
In basic terms, there's the choice – springboards or quicksand.
“In 11 states, welfare pays more than the average pre-tax first year wage for a teacher,” according to the Cato study. “In 39 states, it pays more than the starting wage for a secretary.”
The three most generous welfare states are Hawaii, the District of Columbia and Massachusetts with their annual welfare packages totaling, respectively, $49,175, $43,099, and $42,515.
Pennsylvania comes in 20th at $29,817. Mississippi brings up the rear at $16,924.
Tanner and Hughes report that someone in Hawaii would have to earn a pre-tax income of $60,590 in order to match in net income the state's $49,175 welfare package. And that's unlikely, given that $60,590 is $24,315 higher than Hawaii's median salary of $36,275.
“We should,” said Ronald Reagan, “measure welfare's success by how many people leave welfare.”
Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur (firstname.lastname@example.org)
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Steelers notebook: Linebacker Timmons hoping for contract extension
- Four helicopters respond to Route 51 crash in Rostraver
- School lunch group hopes to revise rules it calls impractical, too restrictive
- Steelers plan to use smart pass rush against Seattle QB Wilson
- Miami (Fla.) gets prepared to take on ‘physical’ Pitt team
- Carrick crime ‘blitz’ shows early signs of success
- Penguins 4th line is showing promise
- Alpine touring skiing movement faces uphill climb in Western Pa.
- Kittanning News carries latest books by Boarts and Creel
- Penguins notebook: Dupuis’ intangibles provide 1st-line value
- Western Pa. dairies get creative to ensure eggnog supply