No Sense Working When Welfare Pays Better

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In 1995, a Cato Institute study found that welfare benefits in all 50 states and DC exceeded the poverty level and, because welfare benefits are tax-free, their dollar value was greater than the amount of take-home pay a worker received in an entry-level job.

Welfare programs have undergone significant changes since and Cato decided to research the current state of affairs.

They found that the welfare system today “provides such a high level of benefits that it acts as a disincentive for work.”

Welfare pays more than a minimum-wage job in 35 states and, in 13 states, it pays more than $15 per hour.

Cato suggests that “if Congress and state legislatures are serious about reducing welfare dependence and rewarding work, they should consider strengthening welfare work requirements, removing exemptions, and narrowing the definition of work. Moreover, states should consider ways to shrink the gap between the value of welfare and work by reducing current benefit levels and tightening eligibility requirements.”

Check out the yearly income of people on welfare. Some are higher than starting teachers here in New York:

welfarepays_1

Check out the unemployment rate in TANF families and the enrollment in welfare:

unemployment and welfare

Welfare is now called TANF – Temporary Assistance for Needy Families – but there’s nothing temporary about it.

August 2013 Report, Cato Institute

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