Government pays people not to work | EDITORIAL
One of the best ways to make a living these days is not to make a living.
Last month, the Committee to Unleash Prosperity released a study examining the value of welfare benefits in each state. In almost half of the states, a family of four with both parents not working can receive annual benefits equal to or greater than the national median family income.
The report looked at unemployment benefits, which typically last six months, and Obamacare subsidies. In 14 states, the value of these subsidies amounted to an annual income of $80,000 or more. This is the equivalent of both spouses earning $20 an hour or more while working full time. In three states, benefits totaled more than $100,000 on an annual basis. In Nevada, they equal more than $69,000 a year.
Consider that the average truck driver and machinist in Nevada earns less than $69,000 per year in wages and benefits. The average retail associate in Nevada earns $41,000 per year in wages and benefits. Remember this the next time service is slow at your favorite restaurant or retail establishment.
There is widespread support for the safety net benefits that keep people out of poverty. But there is much less support for the materials that keep people out of the labor market. But that’s what many economists believe is happening. In February 2020, the labor force participation rate was 63.4 percent. In November 2022, it was 62.1 percent. There are millions of people who were once working or looking for a job who are not currently interested in finding work.
If the government makes work not as financially attractive as full-time work at a reasonable salary, it is inevitable that some people will choose the former over the latter. But the goal should be to use the safety net as a temporary crutch and not as a tool to foster addiction.
One might wonder how this study stacks up against progressives’ claims about widespread American poverty. The Census Bureau reports that the poverty rate was 12.8 percent in 2021. But “government statistical reports exclude ‘non-cash’ sources of income, which exclude most transfers from social programs,” noted the Wall Street Journal in a recent book review of “The Myth of American Inequality.” “Taxes (disproportionately paid by high earners) are also ignored in official calculations.” When benefits are included, the poverty rate falls below 2 percent.
If we are going to have a debate about the safety net, it would help to have the facts. Of course, the reality that government benefits in many cases are exceeding the incomes of even middle-class families must be part of the equation.