The Work Versus Welfare Trade-Off: 2013
Welfare pays more than minimum wage
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. 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. Moreover, states should consider ways to shrink the gap between the value of welfare and work by reducing current benefit levels and tightening eligibility requirements.
The finds come 17 years after the Clinton administration, with bipartisan support from Congress, passed landmark welfare reform legislation that was supposed to move Americans away from entitlements and into the workforce.However, “welfare benefits continue to outpace the income that most recipients can expect to earn from an entry-level job,” the study authors said. “And the balance between welfare and work may actually have grown worse in recent years.”Among the other findings is that welfare in 13 states pays more than $15 an hour, compared with the federal hourly minimum wage of $7.25.The disparity was even higher in nine states in which welfare pays more than the average first-year teacher’s salary and in the six most-generous states, which pay more than the entry-level salary for a computer programmer.
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