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Work or Welfare: What Pays More?

Most crap minimum wage jobs have mandatory reviews either annually, or bi-annually, that come with pay increases. Working pays more over any period of time than not working, unless, of course, you constantly switch jobs every couple of months.
 
Most crap minimum wage jobs have mandatory reviews either annually, or bi-annually, that come with pay increases. Working pays more over any period of time than not working, unless, of course, you constantly switch jobs every couple of months.

I understand that is your opinion, thus no links to support it, however the facts seem to state otherwise.

Study: Massachusetts welfare pays better than entry-level jobs | Boston Herald

Welfare: A Better Deal than Work | Cato Institute
 
Well. I was unemployed for 7 months when the company....
I understand and appreciate your personal anecdote. It doesn't change the fact that some people do make the calculus that welfare is the better option at that time, for them, compared to seeking out work or making changes in their life that would increase their chances of employment at that time. I mean, if we took what you wrote as fact, then we would never need unemployment, and we'd never need any job assistance or welfare assistance because anyone at any time they chose to start working, could get a job, work their way up, and be financially independent. You might get some people agreeing with that broad of a statement too!
 
Ok, quit working and starting getting welfare. It's a better deal, right?

In a little over two years I will, sort of, do just that. I will be 62 and start collecting my SS, which is estimated to be a raise for me. ;)
 
I understand and appreciate your personal anecdote. It doesn't change the fact that some people do make the calculus that welfare is the better option at that time, for them, compared to seeking out work or making changes in their life that would increase their chances of employment at that time. I mean, if we took what you wrote as fact, then we would never need unemployment, and we'd never need any job assistance or welfare assistance because anyone at any time they chose to start working, could get a job, work their way up, and be financially independent. You might get some people agreeing with that broad of a statement too!

I think you folks are missing what I am saying entirely. I am 100% against most forms of means tested welfare, and I get sick of seeing people abuse it on a daily basis. But whether or not welfare pays more than working is entirely dependent on the person working. That was the point of my anecdote. For most people, working pays more. Not at first, but over a period of time, it simply does. There is no 401k with welfare, no possibility of raises, promotions, etc. unless you count having more kids as a raise, and developing diabetes for a disability claim as a promotion. For petty, lazy, stupid people, people who will likely NOT excel at whatever they do...then, yeah, welfare is the better paying option. But the blanket statement "welfare pays more than working" is quite false, at least for the majority of Americans. Otherwise, we'd already be on welfare.
 
In a little over two years I will, sort of, do just that. I will be 62 and start collecting my SS, which is estimated to be a raise for me. ;)

SS is not welfare, you've paid into that your entire life, and deserve and earned every penny you get from it.
 
For most people, working pays more. Not at first, but over a period of time.
The study is what it is. Are you claiming no one who considers filing for the various welfare benefits and sees that today, if they accept welfare that it will pay more than their current job opportunities, will make the choice for staying home and receiving that close (possibly less OR more) pay? The specifics of what they compared wages to is in the study, I don't think they make any such blanket statement. It's spelled out fairly clearly what they factor in, and why. If there is some specific you think the study states, but gets wrong, OK.

I don't think there is much to despite with the article, it is what it is. What's important I assume is that for some people they may have evidence and/or a belief that despite these facts, the benefits outweigh the costs. That's OK, and may be what I agree with too. But acknowledging that welfare can also reduce the number of employed if they make rational choices about cost vs work, is still important to factor in.
 
There was actually talk a couple years ago in the MySpace libertarian group about bleeding the beast. Just having everyone that could be convinced to get as many benefits as possible in an effort to bankrupt the system. Sounds good, but it would never work.
 
SS is not welfare, you've paid into that your entire life, and deserve and earned every penny you get from it.

Many still lump all federal "entitlements" together and call them welfare. Unlike welfare, in all of its many forms, SS/Medicare are, or at least are supposed to be, funded with a flat payroll tax and benefits are only payable upon reaching old age or disability.
 
HOJ, I know you have a reputation for just being an anti-partisan (i.e. partisan). But if you cannot accept that if you make $30K working, and lose (pick a number) $4K to taxes, that a similar person who instead collects unemployment at $30K, and who is not taxed on this (for example), that taxes are trivially, obviously, factually, relevant in the take-home calculation. If anything your opposition is another justification for a flatter tax code, it has to be simple enough so people can compare apples to apples instead of hiding advantages via tax breaks and loopholes.

The premise is bogus. Very few single mother's on TANF own their home. Most working people do. If you own your home, you get a mortgage interest deduction.

See how it works? The CATO study is pure rubbish. It looks at all the "benefits" of receiving TANF, counts none of the burdens, and does the opposite when it comes to income. I can think up about ten benefits and burden on each they didn't count. So their math is wrong.
 
SS is not welfare, you've paid into that your entire life, and deserve and earned every penny you get from it.

Hmm... except then the same generation voted to take that money out of the Trust Fund and spend it on themselves. You don't get to spend the same dollar twice.
 
I understand that is your opinion, thus no links to support it, however the facts seem to state otherwise.

Study: Massachusetts welfare pays better than entry-level jobs | Boston Herald

Welfare: A Better Deal than Work | Cato Institute

On the contrary - over time, he is correct. The problem is the initial hurdle - low-income folks are unlikely to take a year or two of reduced living circumstances in the hopes of working their way up the chain. If that was the case, they probably wouldn't need welfare in the first place.
 
On the contrary - over time, he is correct. The problem is the initial hurdle - low-income folks are unlikely to take a year or two of reduced living circumstances in the hopes of working their way up the chain. If that was the case, they probably wouldn't need welfare in the first place.

It is more complicated than that. You must look at the total "welfare" (in all of its many forms) package, as well as that the federal poverty level is based upon "household" size. Things like housing subsidies, Medicare, SNAP, utility bill "help" and childcare assistance must be counted into the mix. That "initial" hurdle is only the beginning, often making only $1,000/year more or the "household" acquiring an asset (say a second car) can make you lose $6,000/year worth of assistance. That $417/month may be your rent or childcare "budget" making your standard of living drop into a very different situation.

Another odd thing is that adding just one child, to any two person household earning $15,000/year, makes that household "poor". You would need a 25% pay increase ($4,000/year) to get your household "officially" out of poverty, but first may decide to get "welfare" and (accidentally?) discover that is equivalent to a 50% pay raise (or more) as far as the affect on your standard of living.
 
It is more complicated than that. You must look at the total "welfare" (in all of its many forms) package, as well as that the federal poverty level is based upon "household" size. Things like housing subsidies, Medicare, SNAP, utility bill "help" and childcare assistance must be counted into the mix. That "initial" hurdle is only the beginning, often making only $1,000/year more or the "household" acquiring an asset (say a second car) can make you lose $6,000/year worth of assistance. That $417/month may be your rent or childcare "budget" making your standard of living drop into a very different situation.

True. Welfare cliffs do exist. But that does not mean that they exist continually along the income spectrum, nor does it mean that over periods of time they cannot be out-earned, especially given the time-limits on TANF. You are both speaking past each other because you both happen to be correct.

Another odd thing is that adding just one child, to any two person household earning $15,000/year, makes that household "poor". You would need a 25% pay increase ($4,000/year) to get your household "officially" out of poverty, but first may decide to get "welfare" and (accidentally?) discover that is equivalent to a 50% pay raise (or more) as far as the affect on your standard of living.

Nice. Man. We put people on the moon - how in the world are we that dumb?
 
The premise is bogus. Very few single mother's on TANF own their home. Most working people do. If you own your home, you get a mortgage interest deduction.

See how it works? The CATO study is pure rubbish. It looks at all the "benefits" of receiving TANF, counts none of the burdens, and does the opposite when it comes to income. I can think up about ten benefits and burden on each they didn't count. So their math is wrong.

Again you misrepresent reality. Most working people do not own a home, certainly very few single mothers.

While only 43% of households with a householder under the age of thirty-five owned a home

The lowest homeownership rate was recorded for single females under the age of twenty-five of whom only 13.6%, were homeowners. Yet, single females had an overall higher homeownership rate than single males and single mothers.

Home ownership varies based on many things, but simply having a job does not make you qualify for a mortgage, much less allow you any tax advantage for doing so; that depends on your AGI and the amount of your interest payments.

Homeownership in the United States - Wikipedia, the free encyclopedia

Calculating The Mortgage Interest Tax Deduction
 
Again you misrepresent reality. Most working people do not own a home, certainly very few single mothers.





Home ownership varies based on many things, but simply having a job does not make you qualify for a mortgage, much less allow you any tax advantage for doing so; that depends on your AGI and the amount of your interest payments.

Homeownership in the United States - Wikipedia, the free encyclopedia

Calculating The Mortgage Interest Tax Deduction

Pure dodge. Wanna make a bet that more working people own homes than TANF recipients? Did Cato count the interest mortgage deduction benefit for them or not? Cato didn't. Bogus math.
 
Pure dodge. Wanna make a bet that more working people own homes than TANF recipients? Did Cato count the interest mortgage deduction benefit for them or not? Cato didn't. Bogus math.

Cato compared low income workers to those getting social "safety net" assistance. Neither of those groups, even if they could manage to own a home, would be likely to have interest payments that exceed the standard deduction. Your "gotcha" point is thus ignored. ;)
 
Yeah, it's unfortunate that wages haven't tracked well enough to keep them above welfare.

Those are entry level wages. Unfortunately, the way to "raise" them is to increase the minimum wage, which results in more people being on welfare as they become unemployed.
 
Those are entry level wages. Unfortunately, the way to "raise" them is to increase the minimum wage, which results in more people being on welfare as they become unemployed.

Let's put this myth to bed....

minimum-wage-vs-ratio-of-unemployment-rates-1950-jan-2013.png


http://www.econ.yale.edu/conference/neudc11/papers/paper_272.pdf

The Impact of Increasing the Minimum Wage on Unemployment: No Evidence of Harm | An Economic Sense

Studies: Increasing The Minimum Wage During Times Of High Unemployment Doesn't Hurt Job Growth | ThinkProgress

Minimum Wage Bill: Obama's $9 Proposal Won't Increase Unemployment

Ect....ect....
 
Those are entry level wages. Unfortunately, the way to "raise" them is to increase the minimum wage, which results in more people being on welfare as they become unemployed.

Yes but it's not run by teenagers anymore. And low wage jobs are about the only ones growing in America right now. Which in and of itself is rather messed up. Corporate profits for fast food are up, but wages are stagnant and because we continue to inflate away, that means that stagnant salary buys less and less. So either we try to push so that even these low skill jobs can have some level of living wage, or we pay for it through welfare. Rather the former because at least in that case we get some work out. Or welfare recipients have to do community service for their money.
 
Let's put this myth to bed....

minimum-wage-vs-ratio-of-unemployment-rates-1950-jan-2013.png
[/quote

:roll: yes. everyone knows that in a discussion of welfare, the only people whose unemployment v the minimum wage should be measured is mostly teenagers and college students.

Meanwhile:


Yup, you can get some cherry-picked items (not least likely effected by the realities under discussion in this thread), but according to the National Bureau of Economic Research (Working Paper 12663):

...Our review indicates that there is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage. However, the oft-stated assertion that recent research fails to support the traditional view that the minimum wage reduces the employment of low-wage workers is clearly incorrect. A sizable majority of the studies surveyed in this monograph give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages. In addition, among the papers we view as providing the most credible evidence, almost all point to negative employment effects, both for the United States as well as for many other countries. Two other important conclusions emerge from our review. First, we see very few - if any - studies that provide convincing evidence of positive employment effects of minimum wages, especially from those studies that focus on the broader groups (rather than a narrow industry) for which the competitive model predicts disemployment effects. Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups....

The economic literature is pretty thoroughly certain - when you raise the price for something, you decrease relative demand for it.
 
The economic literature is pretty thoroughly certain - when you raise the price for something, you decrease relative demand for it.

Only in econ 101 classes. Maybe you should take an intermediate level econ class, where you would would learn something beyond that basic rules of thumb.

Seriously, there is no evidence that lower minimum wages, in the real live world, lead to higher unemployment. The theory behind that is that higher wages result in employers consuming less labor, and that might would be true if employers employed scads of people who weren't really neccessary.

In the real world, employers strive to maximize profits, thus they never have "extra" employees, above and beyond what is necessary to maximize profits, thus reducing the number of employees due to higher wages costs would result in lower net profits, as companies would not be able to meet demand, and would litterally be turning away customers who are willing to pay whatever price the company charges for it's goods and services. Thats not a rational behavior to any business owner.

Additionally, the increase in demand created by higher wages would tend to increase company profits, thus offsetting any cost push inflation, and the decrease in per unit operating cost due to economy of scale also servce to reduce cost push inflation.

Maybe you should do some research on the economies of countries like Germany, Australia, and most Scandinavian countries, which all have lower unemployment that we do in the US, similar standards of living to our in the US, lower poverty rates, yet they all have either a government mandated, or socially mandated higher minimum wage. In Australia, it's a government mandated minimum wage, and it's almost double that of the US.

One of my issues with typical conservative economic platforms is that they tend to rely on economic theory, which is cherry picked to match their ideology, instead of real life economic data.
 
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