Welfare worth more than $15 per hour job in 12 states

According to a report released in August by the libertarian Cato Institute, when the full package of benefits is taken into account, welfare pays more than a minimum wage job in 33 states. In 12 states, welfare pays more than an equivalent job that paid $15 per hour. In these states, the report notes that an individual who left the welfare rolls for a job paying the same amount would see a decline in take-home pay.

The report, the “Welfare vs. Work Trade Off,” notes that because welfare benefits are not taxable, their value is greater than the equivalent value of pay and benefits from an entry level job. This difference is partially offset by tax credits such as the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC) and various state tax credits. In some states, Cato notes, the combined value of the tax credits can be more than the value of taxes paid so the worker would receive a tax refund larger than their actual tax bill. In twelve states, however, the worker would have to earn more than the value of welfare benefits to bring home an equivalent income. These states include Hawaii, Massachusetts, Connecticut, New York, New Jersey, Rhode Island, Vermont, New Hampshire, Maryland, California, Oregon, and Wyoming, as well as the District of Columbia. In Georgia, a salary of $14,060 would replace welfare benefits.

The report also estimates the value of welfare benefits in terms of an hourly wage equivalent. In 33 states, welfare benefits are worth more than a minimum wage job. In the same 12 states and the District of Columbia, welfare is worth more than a job that pays $15 per hour. In Georgia, welfare is equivalent to an hourly wage of $6.76.

In other terms this means that in 42 states and the District of Columbia, welfare recipients live above the federal poverty level. In Hawaii, Massachusetts, and the District of Columbia, welfare recipients make more than twice the federal poverty level. In Georgia, welfare benefits are at 101 percent of the federal poverty level.

There are 126 federal programs targeted toward low-income Americans. Of these, 72 provide either cash or individual benefits. Such programs include Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Nutrition Assistance Program (SNAP) food stamps, WIC vouchers, public housing, utility assistance and cell phones. Fraud is rampant in many programs.

The Cato study comes as the Bureau of Labor Statistics reports that the Civilian Labor Participation rate fell to 63.2 percent. According to CNN Money, this is the lowest percentage of Americans “over 16 who either have a job or are actively searching for one” since August 1978.

Michael Tanner, senior fellow at the Cato Institute, notes that work imposes other costs aside from taxes and lost benefits. People who choose to work will have to pay for clothing, transportation, child care, and will have less leisure time.

“To be clear: There is no evidence that people on welfare are lazy,” Tanner said. “Indeed, surveys of them consistently show their desire for a job. But they’re also not stupid. If you pay them more not to work than they can earn by working, many will choose not to work.”

Tanner notes that even though this may make financial sense in the short term, low wages for entry-level jobs eventually lead to better paying professional positions.

Find out where your state stands on welfare benefits HERE.

Originally published on Atlanta Conservative Examiner

Unemployed Americans increase by 4 million under Obama

Behind the math:

The population of the United States in July 2009 was 306.77 million according to

http://www.multpl.com/united-states-population/table.  The current US population is estimated at 311.6 million.  Multiplying the population by each year’s respective labor rate yields approximately four million people.

July jobs report not rosy in spite of unemployment decline

The July Jobs report from the Bureau of Labor Statistics unveiled a headline unemployment number that edged down slightly to 7.4 percent as the economy added 162,000 jobs. In spite of the decrease in the overall unemployment estimate, the report does not paint a bright picture for the jobs market. A forecast of economists by Bloomberg had predicted an increase of 185,000 new jobs.

Buried in the report, the Civilian Labor Force Participation Rate actually fell from 63.5 to 63.4 percent as job creation did not keep pace with population growth. According to BLS historical statistics, the rate reached a recent high in January 2007 at 66.4 percent before the onset of the recession. The rate has continued to decline during Barack Obama’s presidency from 65.7 percent in January 2009.

It might seem inconsistent that the labor participate rate declined at the same time that the unemployment rate fell. The answer can be found in the report’s measure of discouraged workers, people who are “not currently looking for work because they believe no jobs are available for them.” The number of discouraged workers rose sharply to a total of 416,000. The 136,000 increase in discouraged workers who dropped out of the workforce is almost equal to the number of workers who found jobs. The U-4 unemployment rate which adds discouraged workers to the headline unemployment rate is at 8.0 percent.

More bad news is that the number of workers who hold part-time jobs increased as well. This includes workers who work part-time for economic reasons such as the inability to find full-time work or declines in demand as well as those who work part-time because of noneconomic commitments such as family or school. These workers are considered “marginally attached” to the workforce. The U-6 unemployment rate which includes both discouraged and marginally attached workers is 14 percent.

As more part-time workers entered the work force, the average work week shortened to 34.4 hours, 0.1 hours shorter than June. The average work week for production employees was even shorter at 33.6 hours. Similarly, earnings for all employees fell by $3.09 and for production employees by $2.02.

Overall, the Yahoo News noted that 65 percent of the new jobs were part time. The industries with the largest numbers of new jobs were in low-paying sectors such as retail (47,000) and restaurants and bars (38,000). Professional and business services also added 36,000 new jobs.

One reason for the increase in the rate of part-time jobs created is the Affordable Care Act. New employment taxes in Obamacare encourage companies to avoid hiring full-time workers that will be subject to the provisions of the health care law that is scheduled to go into full effect in 2014.

Fifty-two percent of the unemployed have been out of work for more than 15 weeks. Thirty-seven percent have been unemployed for more than 27 weeks.

A final item in the report notes that employment figures for May and June were lower than previously estimated. These numbers were revised down by a total of 26,000 jobs.

Originally published on Atlanta Conservative Examiner.

Democrats must love the poor, they make so many of them

As American voters move steadily toward the presidential election, the fundamental question that they must answer is whether Barack Obama deserves a second term as president. To answer this question, voters must look at the state of the nation as well as their own lives.

One of the most obvious statistics to examine is the unemployment rate. Although nationwide unemployment is down from its October 2009 high of ten percent, Politifact acknowledged earlier this month that under President Obama the unemployment rate has remained above eight percent for 43 consecutive months. This is the longest sustained period of high unemployment since the Great Depression.

The numbers behind the unemployment rate are even worse. The economy is creating jobs, but not enough to keep pace with the growing labor pool and population. According to the Bureau of Labor Statistics, the percentage of Americans employed has fallen from 65.7 percent in January 2009 to 63.5 percent in August 2012. This means that in spite of President Obama’s claims that he has created jobs, the actual number of Americans working has decreased sharply since he took office.

According to the U.S. Census Bureau, the U.S. population in August 2012 was 314 million. In January 2009 when President Obama took office the population was 305 million, an increase of more than 8 million people. According to the BLS figures, this means that 206 million people were working in 2009. There are currently only 194 million Americans working. In spite of an increase in the population of more than 8 million people during President Obama’s tenure, there are 12 million fewer Americans working.

The situation is not good for Americans who have not lost their jobs either. According to the Financial Times, the U.S. median income has fallen to 1995 levels. The decline started with the onset of the recession in 2008, but has continued to decline throughout Obama’s presidency, long after the recession officially ended and the recovery began.

The problems of unemployment and income have led to an increase in poverty. A year ago the New York Times reported that the U.S. poverty rate was at its highest level since 1993. In raw numbers, more Americans are living in poverty that at any time in the more than half century that the U.S. Census Bureau has been publishing figures on poverty.

The increase in poverty means that the government is spending more money on social safety net programs. Bloomberg notes that food stamp use is at an all time high. Spending on food stamps has more than doubled during Obama’s tenure with more than 46 million Americans now receiving the entitlement.

The increase in safety net spending is straining popular programs such as Medicare and Social Security. According to the Medicare Trustees report, Medicare’s hospital fund has been spending more than it takes in since the onset of the recession. The trust fund will be depleted by 2024. The situation is similar for Social Security. According to the trustees report, Social Security is also spending more than it takes in, a problem made worse by President Obama’s payroll tax holiday. The Social Security trust fund is estimated to run out in 2035. The insolvency of both programs has been accelerated by the recession and slow recovery.

The result of Obama’s spending binge is that the United States has run deficits of more than a trillion dollars in each year of his administration. These deficits have increased the federal debt by 40 percent according to the New York Times. The massive federal debt and the prospect of tax increases to pay for it have contributed to the slow recovery.

Perhaps what is most disturbing about these statistics is that even though President Obama often cites the economic difficulties that he inherited as an excuse for his administration’s difficulties, the Great Recession officially ended in June 2009, less than six months into President Obama’s term. Even though he has annually proclaimed “summers of recovery” since then most Americans are not feeling that the economic situation is improving. The Obama recovery has been in full swing for three years. It doesn’t get any better under the current policies.

The Democrats claim to love the poor and it must be so. Their policies have created millions more poor people. The choice that voters have this fall is between more of these policies that provide the poor with subsistence but little else or pro-growth policies that will revive the economy through freer markets and trimming government.

Originally published on Examiner.com