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Home » News » News » New Report Says Maine Welfare Benefits Trump Working Wages
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New Report Says Maine Welfare Benefits Trump Working Wages

Steve RobinsonBy Steve RobinsonAugust 27, 20139 Comments3 Mins Read
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Welfare-State1

A new report published Aug. 19 by the Cato Institute has shed light on the extent of government dependence in Maine. In the Pine Tree State, an average family on welfare receives more than the yearly income for a minimum wage worker, and could potentially receive nearly twice that amount.

The report, titled “The Work versus Welfare Trade-Off: 2013,” reprises an analysis first done by the Cato Institute in 1995.  Authors Michael D. Tanner and Charles Hughes created a hypothetical average welfare recipient family and research the total value of benefits such a family could reasonably be expected to receive in each of the 50 states.

The resulting  data offers a startling truth—in the state of Maine, an average welfare family can expect to receive $19,871 in untaxed welfare benefits per annum. This figure exceeds  the yearly income for a minimum wage worker by 27%, and is equivalent to 42.8% of the statewide median salary. These numbers mean that financial incentives exist for welfare recipients in Maine to avoid beginning a career in a minimum wage position.

[RELATED: Fix the System: Maine is still national leader in welfare dependency…]

Tanner and Hughes point out the problems with such generous welfare spending. “While poor people are not lazy, they are not stupid either,” writes Tanner in an online recap titled “Why Get off Welfare?”  If private corporate positions available to welfare recipients require much more work and much less pay than remaining on welfare, those recipients then have incentives to remain on welfare. Simply put, any poor person with a head on their shoulders can see the economic rationale to remaining on welfare, and it shows in the numbers.  “Less than 42 percent of welfare recipients are engaged in some form of work activity,” explain Tanner and Hughes. Considering that education, training, and even job searching all count as a “work activity,” the actual number of welfare recipients who are striving to exit welfare may be far lower.

Such a sweeping study necessarily includes generalizations and estimations. In their study, Tanner and Hughes carefully consider which benefits a typical welfare recipient would receive in order to create a model which most closely follows reality. As a result, Tanner and Hughes exclude housing assistance benefits, which in Maine reach $9,876 per annum.  So-called “hard core” welfare recipients—those who make long-term use of their welfare benefits and are most likely to receive housing assistance—could, therefore, conceivably receive up to $29,747 in yearly welfare benefits, equivalent to 191% of yearly earnings at minimum wage or 92% of the statewide median salary. “It is undeniable,” state Tanner and Hughes in their conclusion, “that for many recipients—especially long-term dependents—welfare pays more than the type of entry-level job that a typical welfare recipient can expect to find.”

[RELATED: Maine residents do not support “clean” elections’ welfare for politicians…]

Maine’s welfare system thus creates perverse incentives for welfare recipients. Finding a job and starting a career is the surest and safest route out of poverty. But with Maine’s current levels of welfare, many rational parents  will see the advantages to not finding a job, even if they would like one. Tanner and Hughes capture the paradox artfully: “By making a rational sort-term choice, recipients who forgo work for welfare may trap themselves and their families in long-term dependence.”

Samuel Sabasteanski
MaineWire Staff Writer

DHHS nanny state Welfare
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Steve Robinson is the Editor-in-Chief of The Maine Wire. ‪He can be reached by email at [email protected].

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Ray Bates
Ray Bates
12 years ago

The results of 30 yrs of Democrat control of our state. Social Justice!

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Cris Edward Johnson
Cris Edward Johnson
12 years ago

OK, so now the lazy welfare moochers are simply really smart guys?

As Josh Barro pointed out in Business Insider last week, the Cato study is deeply flawed because of the presumptions made about “average” welfare recipients and the aggregation of benefits they might receive.

http://www.businessinsider.com/does-welfare-really-pay-better-than-work-2013-8

Of course, another way to look at this argument, even assuming their hypothetical construct is correct, is that minimum wage law needs some serious upward adjustment.

0
Dirigo Blue
Dirigo Blue
12 years ago

jurisdebtor takes a look at Sabasteanski’s piece and the Cato study here:

http://www.dirigoblue.com/2013/08/the-maine-wire-and-the-misleading-cato-welfare-study/

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Dirigo Blue
Dirigo Blue
12 years ago

How many of those that receive welfare are actually working? WalMart uses the welfare system as part of their business model – the typical WalMart SuperCenter employs 300 people, and accounts for over one million dollars in welfare benefits:

http://democrats.edworkforce.house.gov/press-release/low-wages-single-wal-mart-store-cost-taxpayers-about-1-million-every-year-says-new

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Anonymous
Anonymous
12 years ago

Weren’t they always? Instead, Let’s give them a minimum wage based on economic reality.

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Sandy Caissie Gray
Sandy Caissie Gray
12 years ago

but, don’t they have to NEED it to be authorized? this sounds like they can choose to work or collect welfare. someone has to stand up & make it right.

0
Kathleen Billings Veltsos
Kathleen Billings Veltsos
11 years ago

They are laughing at us all. I work in a hospital and hear their comments. They come in with the best cell phones, sneakers that they brag about that cost $170.

0
Claude Beiler
Claude Beiler
11 years ago

jooouli

0
porn
porn
11 years ago

you will love it

0
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