Shocker! Welfare Pays More Than Employment

By Rachel Pulaski



Last week, the Cato Institute released an analysis of the total level of welfare benefits by state called “The Work Versus Welfare Trade-Off” by Michael Tanner and Charles Hughes.  The analysis claims the current welfare system acts as a disincentive “because welfare benefits are tax-free, their dollar value was greater than the amount of take-home income a worker would receive from an entry-level job.”

In particular, this study seeks to determine the approximate level of benefits that a typical welfare family, consisting of a single mother with two children, might receive, and to compare those benefits with the wages that a recipient would need to earn in order to take home an equivalent income

Even after accounting for Earned Income Tax Credit, welfare currently pays more than a minimum wage job in 35 states. Welfare in 42 states exceed the Federal Poverty Level and District of Columbia, Massachusetts, and Hawaii pays more than twice the poverty level.

The report shows only 2.6% of full time workers are poor compared with the 23.9 that don’t work and only 15% percent of part time workers are poor when comparing their incomes to the Federal Poverty Level.

Looking at Welfare Benefits Packages as a whole, the states with the largest welfare packages are:
1. Hawaii- $49,175
2. District of Columbia- $43,099
3. Mass- $42,515
4. Connecticut- $38,761
5. New jersey- $38,728
6. Rhode Island- $38,632
7. New York $38,004

The full report can be read here recently released an article showing Anti-Poverty federal spending:

  • In FY 2011, the total cost of federal and state means-tested welfare programs reached $927 billion, an all-time high. Welfare spending has increased 16-fold since the federal government began the “War on Poverty” in the 1960s and is projected only to increase. This does not include spending on Social Security and Medicare.
  • Today, there are roughly 80 federal means-tested welfare programs, including major programs like Medicaid, food stamps, the refundable Earned Income Tax Credit, public housing, Supplemental Security Income, and Temporary Assistance for Needy Families.
  • Food stamps is one of the largest and fastest-growing means-tested welfare programs. Costs have doubled in inflation-adjusted terms since 2008. In 2012, approximately 47 million Americans received food stamps every month.

Hat Tip  Rob Nikolewski


Thanks for sharing!