redbloodedamerica:

How Welfare Creates Dependence on Government and Holds People Back

by Kevin Ryan

Welfare’s biggest flaw is that it financially punishes those who attempt to leave it. As job wages increase, eligibility for welfare programs is abruptly cut off. Even a raise of a few dollars can terminate access to tens of thousands of dollars in benefits. The implications of this are profound, and very troubling.

Consider a single mother in Illinois making $8.25/hr, or about $15,000/yr after taxes. She is eligible for nearly $48,000 in benefits, resulting in a total of about $63,000 in resources available to her.

Now what if we offer to more than double her salary at work, to $18/hr? Now she’s making $33,000 in net wages… but she is no longer eligible for $42,000 worth of tax credits and medical, childcare, and housing assistance. Thus as a result of either a raise or working more hours, she ends up with 40% fewer financial resources to meet her needs! In fact, she’d be worse off financially if she accepted anything less than $38/hr!

This incredible fact has resulted in a society in which those groups most affected by welfare are financially encouraged NOT to advance to leadership positions, NOT to compete for better jobs, and in some situations, NOT to work at all!

And the group most affected by welfare is, by far, African-Americans, with 46.9% of blacks participating in one of the major means-tested programs in 2009, compared with just 16.9% of whites. In other words, nearly half of all African-Americans are being subjected to incentives not to compete with whites! And the statistics support just such a conclusion:

• Median Household Income = $60,000 White vs. $37,000 Black
• Unemployment Rate = 3.7% White vs. 7.3% Black
• Workplace Managers = 80.9% White vs. 6.3% Black

Likewise, single mothers are given the highest financial benefits in welfare. This disincentive has coincided with a dramatic increase in single parent families since the advent of welfare:

• Children Living in Single Parent Homes = 22% White vs. 55% Black
• Children Born Out of Wedlock = 29% White vs. 73% Black
• Never Married, 45 Years Old+ = 8% White vs. 20% Black

Thus welfare policies are tearing families apart, disenfranchising minorities from our economy, and creating a dependence on the very government programs that cause such damaging incentives.

SOURCES: http://www.census.gov/prod/2012pubs/p70-130.pdf
http://www.bls.gov/news.release/empsit.t02.htm
https://www1.eeoc.gov/eeoc/statistics/employment/jobpat-eeo1/2015/index.cfm#select_label
https://www.bls.gov/web/empsit/cpsee_e16.htm
https://files.illinoispolicy.org/wp-content/uploads/2014/12/Welfare_Report_finalfinal.pdf
http://www.aei.org/files/2012/07/11/-alexander-presentation_10063532278.pdf