Quote from Tsing Tao:
Why Work for $7.25 When Welfare Pays $15.00 in 12 States and $8.00 in 33 States? Is a Low Minimum Wage the Problem?
Michael Tanner at the Cato Institute notes Welfare Pays Better than Work in 33 states.
People Aren't That Stupid
While it's beneficial to have a job, assuming there is hope of advancement, for those with no special skills there is little to no hope of advancement.
Moreover, wages are taxed, welfare benefits are not. And what about day-care costs for single mothers? What about transportation costs? What about the value of extra leisure time?
Add it all up and it makes perfect sense for many to remain on welfare for as long as they can.
Minimum Wage Fallacy
Given welfare benefits exceed minimum wage, it should not be surprising to find socialists arguing for higher minimum wages. And they are.
In Seattle, a Campaign Seeks to Push Minimum Wage to $15.
How successful would that be?
Not very.
The higher the minimum wage, the more incentive businesses have to get rid of employees and use hardware and software robots. And with the Fed suppressing interest rates, companies can borrow with miniscule interest rates and do just that.
Should minimum wages rise, the recipient workers would benefit, but at the expense of millions of others who would lose a job or not get one.
Then when prices rose in response, the socialists would ask for increased welfare benefits to keep up with the rising cost of living!
More Minimum Wage Nonsense
The socialists are out in force. Heidi Moore on the Guardian writes How low can you get: the minimum wage scam.
No Heidi, the sad state of affairs is that socialist fools have no idea what is going on. As Michael Tanner at the Cato Institute points out, it does not pay to work. So people don't.
Don't blame low wages, blame high prices.
The Fed, the ECB, the Bank of England, and the central bank in China are all printing money hand over fist hoping to spur job growth. Instead, they fueled another stock market bubble, a bond market bubble, and revived the property bubble.
Congress enacted hundreds of affordable housing programs. The one and only thing those programs did was create a housing bubble.
When prices crashed, government and the Fed stepped in with attempts to reblow the housing bubble (proving of course no one really wanted affordable housing in the first place). Rather, the Fed wanted a stock-market party and Congress wanted a vote-buying party).
Is Low Minimum Wage the Problem?
Perceived low wages are a symptom of the problem, not the problem.
The problem is socialist fools, progressives, and war mongers sloshing other peoples' money around. For that, place the blame where it precisely belongs: on central bankers, on fractional reserve lending, and on government bureaucrats who interfere in the free market.
We do not need higher wages, we need lower prices. With productivity advancements we would have just that, absent of course the socialist fools, the progressives, the war mongers, and the central bankers.
CATO Institute report says poor Americans have it too good
By Joshua Holland, Moyers & Company
Thursday, August 22, 2013 8:12 EDT
"Conservative think tanks have spawned a cottage industry churning out dubious studies purporting to show that poor families are living high on the hog on public benefits, a claim that anybody who has actually experienced poverty in America would find laughable.
"These papers are then amplified by the right-wing media, forming the basis for calls to further eviscerate a social safety net thatâs already been tattered and torn by 30 years of ascendant neoliberalism.
"The latest addition to the genre is a study published this week by Michael Tanner and Charles Hughes at the CATO Institute. They calculated the maximum benefits of every federal anti-poverty program in which a single parent with two kids could participate, including things like tax credits for the working poor and supplemental nutrition and health benefits for pregnant women and young children, called it all âwelfareâ â a word that has long been unpopular to a public that otherwise supports measures to help the neediest â and used it to form the claim that âwelfareâ provides a perfectly decent quality of life.
"Running the numbers in all 50 states and the District of Columbia, Tanner and Hughes claim that âthe current welfare system provides such a high level of benefits that it acts as a disincen_tive for workâ and urge lawmakers to âconsider ways to shrink the gap between the value of welfare and work by reducing current benefit levels and tighten_ing eligibility requirements.â
"Taken at face value, the study is actually a stinging indictment of Americaâs low-wage economy.
Only two of the 33 countries in the Organization for Economic Cooperation and Development (OECD) devote a smaller share of their economic output to programs that help poor families make ends meet than the United States â Mexico and South Korea. If those relatively stingy benefits provide more than one can earn working a minimum wage job â the authors say thatâs true of 35 states â then the minimum wage is obviously not enough to get by on. Tanner and Hughes make much of the fact that in 13 states, the maximum benefits exceed $15 per hour, but according to MITâs Living Wage Calculator, their hypothetical single parent needs to make at least $20.14 per hour just to cover his or her familyâs basic necessities. Thatâs in the cheapest state â South Dakota. The nationwide average is $24.09 per hour. The federal minimum wage, had it kept up with American workersâ productivity, would fall somewhere between $16.50 and $22.00 per hour instead of $7.25.
"But the paper shouldnât be taken at face value because the authorsâ abundant caveats show that their study measures neither the reality of poverty in America, nor that of the public programs designed to fight it.
"Tanner and Hughes acknowledge that âsurveys of welfare recipients consistently show their desire for a job.â They acknowledge that a significant share of those receiving public benefits are working â Walmart employees, for example, famously rely on public assistance to get by, meaning that taxpayers effectively subsidize the Walton familyâs vast fortunes. And they note that programs like TANF are time-limited â to a maximum of 60 months except in most cases.
"They also acknowledge the central flaw in their conclusion: in real life the âtypicalâ family in their study doesnât come close to receiving the maximum benefit from every single program for which theyâre eligible. But here the authorsâ caveat doesnât go far enough. Due largely to the fact that eligibility requirements have already become harder to overcome, these programs are helping fewer poor families get by. In 2009, around three out of four poor families with kids werenât getting any TANF benefits. At the height of the economic crash, about 25 percent of those eligible for food stamps werenât receiving them; during better times, that number hovers around 40 percent. And as the CATO study concedes, six out of seven poor families arenât getting housing assistance.
"So a study that claims to tell us about the âtypicalâ poor family is really describing a rarity â the equivalent of a four-leaf clover. But the purpose of these studies isnât to inform good policymaking. They feed a narrative that the poor are lazy and undeserving, and provide wonky cover for further weakening our social safety net. When studies like this one are picked up by the conservative media, all of the authorsâ caveats tend to be stripped away, and they become straightforward claims that poor families sit back enjoying a good life, forcing overburdened tax-payers to pick up the tab.
"With one in seven Americans either unemployed or underemployed, and the sequester already resulting in deep cuts to programs designed to help the neediest, itâs a profoundly immoral pursuit.
"Correction: an earlier version of this post claimed that a household could receive TANF benefits for a maximum of 24 months. "
http://www.rawstory.com/rs/2013/08/22/cato-institute-report-says-poor-americans-have-it-too-good/