Why work when Welfare pays better than minimum wage?
New report looks at how Government benefits disincentivize people from getting a job
August 21, 2013
In 1995, the Cato Institute published a study which estimated the value of the full package of welfare benefits available to a typical recipient in each of the 50 states and the District of Columbia. It found that not only did the value of such benefits greatly exceed the poverty level but, 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. Since then, many welfare programs have undergone significant change, including the 1996 welfare reform legislation that ended the Aid to Families with Dependent Children program and replaced it with the Temporary Assistance to Needy Families program.
The Cato Institute just released a new report which examines the current welfare system in the same manner as their 1995 paper. Their conclusion is, "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…. The current welfare system provides such a high level of benefits that it acts as a disincentive for work. Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit, and in 13 states it pays more than $15 per hour."
According to the report, Wyoming’s welfare benefits have gone from $26,866/year (adjusted for inflation) to $33,119/year, an increase of $6,253.
Click here to read the Cato Institute article about the report: The Work versus Welfare Trade-Off: 2013 August 19, 2013
Click here to read the full report: The Work versus Welfare Trade-Off: 2013 (4.16MB PDF, 52 pages)
Related Links
Clare Higgins: Inside a Cato Institute report: Loads of hogwash (Opinion piece) - August 23, 2013, Gazettenet.com
2013 Federal Poverty Guidelines
Wyoming Department of Family Services
Wyoming Cash Assistance (POWER) - A time-limited pay-after-performance program, the Personal Opportunities with Employment Responsibilities assures families with a dependent child(ren) are working to become self-sufficient through employment, child support and other resources.
State Adult Student Financial Aid (SASFA) - State Adult Student Financial Aid (SASFA) is available for some college and work training students. SASFA is a cash assistance program for single parents who are attending college for their first degree or first vocational training program.
SNAP Income Guidelines - Supplemental Nutrition Assistance Program (Formerly known as food stamps), Wyoming Department of Family Services
Telephone Assistance Program (TAP) - TAP is a service provided by telephone companies to help people and families maintain a phone, landline, cable or cell phone - To qualify, a person or family needs proof they are participating in a social service program such as SNAP, LIEAP or Medicaid, Wyoming Department of Family Services
Low Income Energy Assistance Program (LIEAP) - LIEAP is a state and federally-funded program that helps people pay home heating bills November through June. The program is open to homeowners and renters. It helps cover the costs of electricity, natural gas, propane, wood, diesel heating oil, coal and pellets when these are used for heating a home. Wyoming Department of Family Services
LIEAP Income Guidelines - Starts at $1,999/month $23,983/year for 1 person, Wyoming Department of Family Services
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Related Links
Temporary Assistance to Needy Families (TANF) - TANF helps parents find and enroll in career training programs while promoting work and marriage and preventing out-of-wedlock pregnancies, Wyoming Department of Family Services
Women, Infants & Children Program (WIC) - WIC is the Special Supplemental Nutrition Program for Women, Infants, and Children to safeguard the health of low-income women, infants, & children up to age 5 who are at nutritional risk by providing nutritious supplemental foods, health and nutrition screening and education, breastfeeding support, and referrals to healthcare, Wyoming Department of Family Services
Medicaid - Healthcare services for children, pregnant women, families with children, and individuals who are aged, blind or disabled, Wyoming Department of Family Services
Kid Care (CHIP) - Medical, Dental and Vision services, Wyoming Department of Family Services
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