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With the economy stuck in the doldrums, the unemployment rate mired in the mid 7% range and the U-6 rate, which measures those out of work along with those who have given up or who are working part time in lieu of full time work, lounging in the 14% range one has to wonder why there is no popular outcry to throw the bums out.
The answer would seem to be that many are discovering not working is more lucrative than their options in the workforce.
In a study released by Cato Institute today titled The Work versus Welfare Tradeoff: 2013, researchers Michael D. Tanner and Charles Hughes show that in every state in the nation the cash and benefits package available under various welfare programs exceeds what a person would earn at a minimum wage job. The lowest benefit is available in Mississippi ($16,984) as compared to $15,080 working at the federal minimum wage. The fact that many welfare benefits are tax free, the value is much greater than a similar amount earned in a private sector job.
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.
While that might not sound overly generous, remember that welfare benefits aren’t taxed, while wages are. So someone in New York would have to earn more than $21 per hour to be better off than they would be on welfare.That’s more than the average statewide entry-level salary for a teacher.
Plus, going to work means added costs such as paying for child care, transportation and clothing. Not to mention that, even if it’s not a money-loser, a person moving from welfare to work will see some form of loss — namely, less time for leisure as opposed to work.
Is it any wonder, then, that, despite the work requirements included in the 1996 welfare reform, only 27.6 percent of adult welfare recipients in New York are working in unsubsidized jobs?(Another 13 percent are involved in the more broadly defined “work participation,” which includes job search, training and other things.)
Indeed, the top paying jurisdiction is Hawaii where a mother (note, not mother and father) of two can receive northwards of $60,000 per year.
Poor people are not stupid. When given the choice of working at a minimum wage job and not working and receiving at least the same quality of life… probably better as your leisure time goes way up… there is small wonder at the seeming contradiction between the intractable unemployment rate and the availability of jobs.
When combined with up to 99 weeks of unemployment and the generous availability of disability payments the political question of how Obama has avoided accountability for the most atrocious economic strategy since Jimmy Carter is answered. The people out of work may be fairly content with their status.
In the words of Walt Kelly, creator of the iconic Pogo comic series, we have met the enemy and he is us.