A new research report on American welfare programs found that Mainers who take advantage of the full suite of state and federal welfare programs currently available can get annual benefits worth $71,757.
In Maine, the median income for a household is $71,139 — meaning Maine families can make more money by skipping work and enrolling in welfare programs instead.
Casey Mulligan, an economics professor at the University of Chicago, and E.J. Antony, a research fellow at the Heritage Foundation, authored the report.
“The federal government and the states offer a wide array of more than two dozen programs that provide cash assistance or in-kind benefits to low-income families. These “safety net programs” are designed to keep families out of poverty. But the expansion of assistance, especially in subsidized health insurance to families with children and no parents working, can mean that families can earn as much or more income from receiving government assistance than the median household does from working,” the report states.
“Unemployment insurance benefits are time limited, but for the period when the benefits are provided, returning to work may not pay for many households,” it states.
The total amount of government assistance available in 2021 dropped slightly from 2022, thanks to the expiration of expanded unemployment benefits, but the amount of money non-working people can get is still competitive with the average wages of working people.
“[T]his study finds that even with existing unemployment benefits and the dramatic recent expansion of ObamaCare subsidies, a spouse would have to earn more than $80,000 a year from a 40 hour a week job to have the same after-tax income as certain families with two unemployed spouses receiving government benefits,” the report states.
Washington, Massachusetts, and New Jersey all beat out Maine in terms of the dollar value of total welfare benefits available. In those states, an unemployed couple could bag more than $100k in benefits.
“In these states, working 40 hours a week and earning $20 an hour would mean a slight REDUCTION in income compared to two parents receiving unemployment benefits and health care subsidies,” it states.
The study suggests that generous federal and state benefit programs may be suppressing the work force participation rate, a measure of how many able-bodied adults are actually working.
In Maine, the workforce participation rate was 58 percent in November — much lower than the national average of 62.1 percent.
In Jan. 2008, Maine’s work force participation rate was 66.1 percent.
This is the lowest Maine’s work force participation rate has been since 1976, which is as far back as economic data from the St. Louis Fed goes.
Despite that record low work force participation rate, Democratic Gov. Janet Mills and lawmakers of both political parties continue to support issuing direct payments to residents of Maine.
Those payments would contribute to the high benefit levels currently competing against job openings, potentially worsening the falling work force participation rate.
Here’s the full report:
