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Why Get off Welfare?

August 22, 2013 in Economics

By Michael D. Tanner

Michael D. Tanner

Contrary to stereotypes, there is no evidence that people on welfare are lazy. Indeed, surveys of welfare recipients consistently show their desire for a job. But there is also evidence that many are reluctant to accept available employment opportunities. Despite work requirements included in the 1996 welfare reform, the U.S. Department of Health and Human Services says less than 42% of adult welfare recipients participate in work activities nationwide. Why the contradiction?

Perhaps it’s because, while poor people are not lazy, they are not stupid either. If you pay people more not to work than they can earn at a job, many won’t work.

Poor people aren’t stupid. If they can get more from the government than they can from a job, they aren’t going to work.”

A new study by the Cato Institute found that in many states, it does indeed pay better to be on welfare than it does to work.

Most reports on welfare focus on only a single program, the cash benefit program: Temporary Assistance for Needy Families. This focus leaves the misimpression that welfare benefits are quite low, providing a bare, subsistence-level income. In reality, the federal government funds 126 separate programs for low-income people, 72 of which provide either cash or in-kind benefits to individuals.

Because there are so many categories of welfare recipients and so many different types of benefits, it is extremely difficult to determine how many people get what combination of benefits. For the purposes of this study, we assumed a hypothetical family consisting of a mother with two children, ages 1 and 4, and calculated the combined total of seven benefits that family could receive in all 50 states.

If that mother received Temporary Assistance for Needy Families, it is almost certain that she would also receive food stamps and Medicaid as well. Roughly 87% of Needy Families do.

Approximately 61% of all Needy Families fitting our profile also receive aid from the Women, Infants and Children program, or WIC, so we included that benefit. (If the children were older, they would not be eligible for WIC but would receive other benefits such as subsidized school lunches and breakfasts.) We also included utilities assistance, given that half of welfare recipients are on that program.

Housing assistance was a tougher call. Nationwide, the rate of participation varies from nearly 82% of Needy Families in North Dakota to virtually none in Idaho. Housing programs also generally have waiting …read more

Source: OP-EDS

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