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Posts tagged “Welfare

Welfare: It’s Worse Than Cato Realizes


On Monday, MIchael D. Tanner and Charles Hughes of the Cato Institute published their white paper, The Work vs. Welfare Trade-Off: 2013. Even if you haven’t read the full 52 page report, odds are you have at least heard of it. In the last 48 hours, it’s been reported on by FOX News, Twitter has exploded with mentions of the report and the authors’ conclusions. It keeps popping up on Facebook.

Then again, you may not have heard about Cato’s latest. Despite the hew and cry the report has generated amongst the small government crowd, left wing outlets and publications have hardly made mention of it. Searches of Huffington PostSalonThe New Republic, and The Nation will not yield any mentions of the authors or their paper. Nor has MSNBC deigned to give any coverage, although a search of their website does produce a a short, paragraph spot from WISE in Indiana. Even the “mainstream” networks (ABC, CBS, NBC, CNN) haven’t seen fit to give this story even a 1 second mention (although CNN does see fit to list articles about Dr. Phil and Jerry Springer among their “top stories”).

As the cliche notes, the silence from the liberals is deafening.  It’s to be expected, I suppose. For over 90 years, the linchpin in liberal ideology is that government assistance is a requirement for good governance. It gave rise to the New Deal programs of the 1930’s and the Great Society / War on Poverty in the 1960’s. Ask a liberal why, despite these massive government assistance programs, poverty rates remain basically unchanged over the past 60 years and you will hear dozens of excuses. From latent racism to corporate greed, liberals have a smorgasbord of time-worn choices to use. Admitting that the welfare programs they cherish have a problem isn’t in that toxic stew. When faced with as well researched a report as the one produced by Tanner & Hughes, with irrefutable facts that demonstrate the sheer lunacy of the American welfare system, all a liberal can do is cover their ears and stomp around in denial.

The authors conclude that despite the much ballyhooed 1996 Welfare Reform Act, the typical welfare recipient receives more benefits for a longer time with less chance of actually working in 2013. The one achievement that Bill Clinton can point to in defending himself as as a moderate has turned out to be an even bigger failure than his handling of a nascent terror group calling itself Al-Qaeda.

I don’t disagree with the authors regarding their conclusion. If welfare is meant to be a bridge towards making the poor self-sufficient, the the government has completely failed. The authors report:

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.

This is where I have a small problem with Cato’s paper. While I agree that the system is a mess, I believe it is even more of a mess than Cato presents. Why? Two reasons. First, Cato used a 40 hour work week to determine the “equivalent wage” for a welfare recipient. This might have been acceptable when doing this report 17 years ago. However, the average hours worked per week has been steadily falling for the past 14 months (thanks, Obamacare!) and currently stands at 34.4 hours. Odds are since someone transitioning from welfare to work would be in an entry level position and said positions have seen even more drastic cuts to the workweek, the equivalent wage should be based on the 25.9 hours worked per week by chambermaids or the 31.4 hours worked by retail clerks. I’m fairly comfortable using 34.4 hours, since it closely replicates the original reports intent.

Second, the authors failed to account for the individual states minimum wage laws when computing their statistics. They deliver two pretty powerful snapshots:

  • “Welfare currently pays more than a minimum wage job in 35 states, even after accounting for the Earned Income Tax Credit.”
  • “In fact, in 13 states, welfare pays more than $15 per hour.”

Yet, when accounting for the two factors I entered, I came up with even more grim results:

  • Welfare currently pays more than a minimum wage job in 44 states, even after accounting for the EITC
  • In fact, in 21 states, welfare pays more than $15 per hour

And I would add a third bullet point:

  • Currently, welfare pays an equivalent wage more than $5 per hour greater than the minimum wage in 33 states

In fact, if the goal is to make welfare an unattractive option for the poor and we want to move them into working, it can be argued that the equivalent wage should be at least $1 less than the state minimum wage. Using that criteria, only one state – Idaho – is succeeding.

Yes, my friends. Bill Clinton promised to “end welfare as we know it.” He was right. Welfare has become a highly paid career choice.

Below is a chart showing the difference between the equivalent wage and the state minimum for all 50 states, plus the District of Columbia. Where does your state rank?

Rank Jurisdiction Equivalent Wage Difference, State Minimum vs. Welfare
1 Hawaii  $                   26.62
2 Massachusetts  $                   20.25
3 DC  $                   20.16
4 New York  $                   17.18
5 New Jersey  $                   17.04
6 Connecticut  $                   16.55
7 Rhode Island  $                   16.47
8 Vermont  $                   15.07
9 New Hampshire  $                   14.97
10 Maryland  $                   14.08
11 California  $                   12.77
12 Wyoming  $                   10.98
13 Oregon  $                   10.22
14 Minnesota  $                     9.16
15 Delaware  $                     9.08
16 North Dakota  $                     8.87
17 Pennsylvania  $                     8.78
18 Nevada  $                     8.42
19 New Mexico  $                     8.10
20 South Dakota  $                     7.62
21 Kansas  $                     7.56
22 Michigan  $                     7.37
23 Montana  $                     7.25
24 North Carolina  $                     7.15
25 Alaska  $                     7.01
26 Washington  $                     6.93
27 Ohio  $                     6.80
28 West Virginia  $                     6.67
29 Alabama  $                     5.78
30 Indiana  $                     5.55
31 Missouri  $                     5.39
32 Oklahoma  $                     5.32
33 Louisiana  $                     5.19
34 South Carolina  $                     5.00
35 Wisconsin  $                     1.07
36 Virginia  $                     1.06
37 Nebraska  $                     0.81
38 Arizona  $                     0.76
39 Iowa  $                     0.69
40 Georgia  $                     0.61
41 Utah  $                     0.55
42 Colorado  $                     0.46
43 Maine  $                     0.28
44 Kentucky  $                     0.21
45 Texas  $                   (0.23)
46 Arkansas  $                   (0.41)
47 Tennessee  $                   (0.48)
48 Mississippi  $                   (0.64)
49 Illinois  $                   (0.66)
50 Florida  $                   (0.75)
51 Idaho  $                   (1.02)
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Liberty and Fairness


“The natural distribution is neither just nor unjust; nor is it unjust that persons are born into society at some particular position. These are simply natural facts. What is just and unjust is the way that institutions deal with these facts.” ― John Rawls, A Theory of Justice

Recent events in my own life have forced me to re-examine some of my most deeply held convictions. During the time I’ve been absent from this blog (wait – you didn’t notice???), four events in particular gave rise to self-reflection:

  • Crohn’s Disease, with which I’ve done battle for 22 years, once again reared up and forced me to the sidelines
  • My eldest son, who was born with a developmental disability, is now caught up in the nightmare that is the state mental health system
  • I’ve rented a room to a family that is emblematic of all that is wrong with the way government abuses good people
  • Another of my tenants passed away during the night

You’re probably wondering why I would spend the time to ponder what one prominent politician describes as “esoteric debates” when life brings such immediacy. You’re probably wondering further why I would take the time to write about that internal debate. The answer is that such internal debates are neither esoteric nor a thriftlessness exercise. It is by determining if our views are malleable to the events in our lives that we discover if our core values are the result of dogma or the sound exercise of judgement.

The overarching theme of President Obama’s tenure is that of “fairness.” Only, in Mr. Obama’s world, the fairness is defined by outcome; one in which those aggrieved receive what they deem to be their just share. This doctrine is exemplified in the policy objectives of his administration. Be it the underlying argument for Obamacare (that the only fair medical system is one in which everyone has health insurance), economic policy, the tacit embrace of the Occupy Wall Street movement, the management of foreign policy (attempting the equal embrace of islamist and democratic ideologies abroad) or dozens of other initiatives pursued, Mr. Obama is clear in how he defines “fair.” Further, his actions (including his insistence on defending the possibly unconstitutional and certainly intrusive domestic spying program) demonstrate a certainty that governmental institutions are the best method of obtaining this measure of fairness while denigrating the roles of other, traditional venues.

Unlike many of the President’s critics, I do not think he is an uncaring ogre bent on instituting a draconian new way of life on the American people. Although we disagree on most issues, I certainly applaud his efforts to afford all people equal protections under the law. I think it is indicative of his nature, in that he actually cares about the quality of life afforded ordinary Americans. I think most of my fellow countrymen have that same feeling and that underlying belief in his nature is the ultimate reason he won re-election – even though most of us remain opposed to his specific action plan.

I also think that more than a difference in political philosophy, we have divergent views on reality and possibility that slice to the core of our differences. The President is what might best be termed a government interventionist. Government Interventionism infects both the modern liberal and conservative movements. It is characterized by a belief that not only can the government positively effect outcomes, but that it should. While conservatives and liberals often have different goals in mind, they agree with the principle of a results-based system. As anyone who follows me on Facebook or Twitter is well aware, I have never subscribed to this view of governance.

My introspection of the past weeks has called me to wonder if, perhaps, this approach is best. One of the criticisms of Libertarians is that we are a callous bunch, uncaring about how life’s travails affect our fellow men. Those who know me personally know this isn’t the case. Of the root causes for my self-reflective journey, two involved people that I know cursorily. Yet, they are people who strike me as somehow getting less from life than their character would indicate they deserve.

Allow me to begin with the woman who died in her room last Wednesday. Although I knew her only a few months, what I did know belied her situation. She worked full-time (a rarity in today’s economy) and was well-respected by both her coworkers and employer, she had a large and close-knit family and she was outgoing, gregarious even. Yet, she died alone in rented room, the victim of a long battle with a chronic illness; in her case, diabetes. From what I could see, it was not a pleasant or painless death. She must have known she was in desperate trouble – I found her collapsed at the foot of her bed, in a position indicating she struggled to get to her door, with her phone fallen from her outstretched hand and smashed into bits. If we live in a results based society, why did she die in this manner? What could society have done differently that would have ensured that at the very least, one of her family would have been with her in her time of greatest need? At her funeral on Saturday, meeting her family and friends and seeing the outpouring of grief that overcame them all, I wondered why a woman so beloved by so many, who had done all society asked of her, should have been subjected to such a terrible death?

The week prior to her passing, I rented a room to a family of four. One room, four people, sharing a kitchen and bath with three other tenants. These are decent people, again doing all society says they should do. Both parents work and the mother attends nursing school; the children are incredibly well behaved (I wish mine had been so well behaved!). But they are victims of governmental bureaucracy as much as anything. The father openly admits to making mistakes when he was younger, which resulted in a felony conviction two decades ago. Since then, he’s done the things we tell him he should do: work to support his family, avoid the drama of street life, return to school and complete his GED. He would like to continue his education, but supports his wife as she works towards getting her degree. This is a family, in short, that is playing by all the rules our society dictates – yet they are reduced to living four to a single room, because it is all they can afford. The welfare system, the one that liberals tell us prevents this type of thing from happening and conservatives insist is too generous, is unavailable to them unless the father abandons his family. It is his decades old prior conviction that denies them access to it. Somehow, this result doesn’t seem fair to me.

Along the same lines, my personal struggle with chronic illness – in particular, a 22 year battle with Crohn’s Disease – has become much more difficult over the past two years. Over that time, I’ve had to shutter a business, spent nearly 8 months (cumulative) hospitalized and watched my family’s wealth get drained until we were destitute. I’ve rebounded some financially, but am in no way near the same fiscal position I was in 2011. Most of those around me think it unfair that my life has taken such a drastic turn, or that my reality is I’m likely wheelchair bound within the next two years and probably blind in less time than that. Certainly I wish there were a better prognosis.

Finally, there is my oldest son, Dennis. Some of my long-time readers are aware that he is what society euphemistically calls “developmentally disabled.” His reality is that he will never comprehend things the way you or I do. His IQ is 54; intellectually his development is equivalent to a second grader, emotionally he is at roughly the same stage as most 13- or 14-year olds. So while physically he’s a strapping 25 year old young man, his mind has yet to catch up to his body. Odds are that the two will never be in sync. This is the crux of his current problem. Because of his condition, he finds it difficult to express his feelings, except to occasionally blow up the way most 14 year old boys will. About 6 weeks ago, he found himself in a situation where he was being teased (not an uncommon situation, unfortunately) and lost his temper. The police were called; they followed protocol and brought him to the emergency room for observation. Which is where the nightmare began. Rather than checking his medical records, the hospital diagnosed Dennis as a violent schizophrenic and packed him off to the closest mental hospital. The doctor (I use the term in deference to his degree, not his competence) there confirmed the diagnosis, again ignoring his medical condition. A competency hearing was held, in which the doctor amplified his diagnosis to include the term “homicidal.” And so my son sits in a mental hospital, not understanding what’s happening or why as we fight to have him moved to another facility and have a new diagnosis issued that accounts for his disability. I’m not sure who would consider this outcome “fair.” If the President thought the justice system was ultimately unfair to the family of Trayvon Martin, I can’t see how he could consider this fair.

In reflecting on these incidents, each with an outcome which seems disproportionate in outcome to circumstance, I wondered if the results would be different were the fairness doctrine imposed by society replaced by libertarian values. Chances are that in three cases, the results would be the same but the perception would be different.

  • In a Libertarian society, we would acknowledge that the young lady who died chose to live her final days alone. While there still would be sadness accompanying her death, it wouldn’t be considered unfair that she had neither friends nor family with her in her final hours.
  • For the family renting the single room, society wouldn’t consider it unfair that a hard working mother and father would resort to housing their family in these conditions. In a Libertarian society, they would be celebrated as examples of how to face adversity.
  • As for my health, nobody would consider it unfair that I’m sick and fated to becoming sicker. Unfortunate? Unlucky? Sure, those sentiments would be common. But the choices my family made in previous years were our own and left us in the financial position we find ourselves. I knew my health was precarious before launching my last business; it was our choice to take that route as opposed to my taking a job in what is a poor economy. Using Libertarian values, we took a calculated risk that proved unwise. But in the interventionist society we live in, we demonstrated incredible recklessness and need to be saved from ourselves.

Libertarians believe that fairness in opportunity is far more important than fairness of outcome. After all, if everyone is free to pursue their life’s goals – if they are truly at liberty – then the outcomes are inherently fair. Differences in outcome will have more to do with natural ability and desire than anything a government can do. While the odds are that the above situations would not be dramatically different than in a Libertarian society, there is one important way in which one of those situations would be better. The people above would be less constrained by a restrictive society. The family in one room may well be much better off, since Libertarians tend to look at most drug laws as counter-productive – meaning no felony record for the father. He would certainly have better employment opportunities without that black mark.

As for my son, a Libertarian society would probably mean all the difference in the world for him right now. Without the modern police state in which presumed innocence is nothing more than a tired cliche, it’s doubtful he would be where he is now.

So, yes, I’ve reflected and pondered. You’ve read my conclusions. You may not agree with them, but I end this period of introspection confident in my core belief that the equitable outcomes can only be guaranteed by the one truly fair system ever known to humankind. That is, that by believing in the individual and providing them with the liberty to achieve to their individual potential, a government does its best service to the governed.