Welfare Benefits Pay More than Work in Many States

It’s a beautiful day on the surfing beaches in Hawaii. And you have all day or even all week to soak in the rays and just surf. If you play your cards right, Uncle Sam will pick up all your living expenses for you. The Cato Institute has released a new study looking at the state-by-state value of welfare benefits for a mother with two children. The results will take your breath away. Here, Cato’s Michael Tanner gives you a shocking summary. Indeed, “welfare pays better than work.”

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.

Read the study here.