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Does collecting welfare beat working? Cato Institute thinks so

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"If your theory does not comport with reality, then you have a bad theory."   So says every science teacher to just about every science student, from middle through graduate school.

If their latest publication, The Work versus Welfare Trade-off:2013 is any indication, some of the great minds at the Cato Institute skipped those science classes.

Their latest theory, put forth in a study by Michael Tanner and Charles Hughes, tries to show that in many states, a person can make more money by going on welfare than by working for a living.  

That is a bad theory; it simply does not comport with objective reality.   Yet when all their data were collected and analyzed, what do you think Messrs. Tanner and Hughes concluded?

From the study's Executive Summary: "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 authors unwittingly reveal their bias in that sentence: "The balance " may have grown worse."   A more objective investigator might have written, "The balance may have changed "" But these authors are not objective.   To Messrs. Tanner and Hughes, "worse" means "in favor of the recipient," that is, "worse" for the taxpayer.

The Executive Summary continues, "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."

The authors go on to point out that since most 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."

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And what are Messrs. Tanner and Hughes' suggestions for fixing this problem?   "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."   They also suggest that states "consider ways to shrink the gap between the value of welfare and work by reducing current benefit levels and tightening eligibility requirements."

Of course, that would be the Cato Institute's recommendation no matter how the study came out.   The Cato Institute is a libertarian think tank, founded in 1974 by, among other people, Charles G. Koch, Chairman and CEO of Koch Industries, Inc.

It should come as no great surprise that the study fully supports the great conservative notion that everybody is doing just fine and we would all be doing even better if the government would just butt out of our lives and let us keep our money.   Oh, and if all those government-enabled slackers and deadbeats would get off their duffs and start working for a living.

Trouble is, that theory does not comport with objective reality -- unless you bend objective reality to accommodate the theory.   And that is what Messrs. Tanner and Hughes proceed to do.

Method

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To carry out their study, Messrs. Tanner and Hughes created a hypothetical reference welfare family consisting of a single mother and two children, both under 5 years old (and thus eligible for the WIC program).

The authors assembled, state by state, a basket of seven welfare programs for which such a family would typically qualify.   The basket included:

-          Temporary Assistance for Needy Families (TANF, the less-generous successor to AFDC),

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Rick Wise is an industrial psychologist and retired management consultant. For 15 years, he was managing director of ValueNet International, Inc. Before starting ValueNet, Rick was director, corporate training and, later, director, corporate (more...)
 

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Not surprising at all. Democrats have been raising... by Bill Johnson on Wednesday, Sep 11, 2013 at 10:07:21 AM
Bill, Thanks very much for your comments. ... by Richard Wise on Wednesday, Sep 11, 2013 at 4:52:21 PM
Richard, I am not allowed to post articles. I trie... by Bill Johnson on Wednesday, Sep 11, 2013 at 5:49:45 PM
Bill, Thanks very much for your reply. &nb... by Richard Wise on Thursday, Sep 12, 2013 at 9:45:08 AM