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Welfare Benefits: Cant Work With Them, Cant Work Without Them

Welfare recipient Tina Smith recently told state senators that a lack of resources for education and other things makes it hard to stay off welfare. One thing you have to decide as a state is what you want from people who are on welfare, she said Do we just want them to have a job, no matter what it is Poor people can flip burgers all day long, and it doesnt get them anywhere. But if you want people to be productive, you have to help them uplift themselves. Pity Ms. Smith. Shes learned the lessons of welfare all too well.

The Cato Institute ranks Colorado 15th in the richness of its welfare benefits. To replace the benefits provided by AFDC, food stamps, Medicaid, housing, nutrition programs, and other welfare, a welfare mother with two young children would need a job paying $35,971 a year. This is good money in a state where the 1993 median household income was about $34,500.

These numbers mean that the legislators seeking to reform welfare face an impossible task.

Poverty advocates invariably complain that welfare penalizes people who work because those who earn too much money lose thousands of dollars in benefits. In theory, one could offer benefits that gradually decline as income increases. In practice, such programs are impossibly expensive. The other possibility is to lower benefits to the point where the wages from an entry level job substantially improve ones lot.

People United for Humane Welfare apparently backs the latter approach. Billed as a collection of organizations claiming to assist the poor, it staged a demonstration at the state capitol on January 9. Supporters chanted We want some jobs, oh yes we do, that pay as much as we pay you. Taxpayers should rejoice. State legislators make only $17,500 a year.

But other poverty advocates want reform that increases benefits. Fond of claiming that welfare recipients cannot get jobs because there are not enough slots in day care centers, they want the state to provide free day care. Child care is always a problem for working parents, but in 1991 only about 16% of children under 5 years old, of employed mothers were in day care centers. Most parents used home-based care. Often cheaper and more convenient, home-based care also poses fewer health risks. Since Colorado AFDC already pays for either home-based or center care, the question is how forcing taxpayers to fund government day care centers will reduce poverty.

Poverty advocates also claim that welfare recipients cant work because they dont have enough education to get a good job. If taxpayers would only fund additional education and counseling, they say, welfare recipients would get jobs, get off welfare, and start paying taxes.

This claim was tested by three demonstration programs in the mid-1980s. In each case, young welfare recipients were divided into two groups. Both received regular welfare benefits. One also received extensive counseling and education. On balance, participants in the groups receiving education and counseling were as likely to remain on welfare as those who got no extra help. A more recent experiment found that intensive education and training was only one-third as effective in moving people off welfare as heavy grants reductions for people who did not comply with job search requirements.

The message of poverty advocates contains no hint of the failures of training programs. Nor is there any hint that work itself lifts people out of poverty. In the poverty advocates world, recipients cant work unless they get more benefits. And once they have those benefits they cant work because theyll lose them.

But despite the pessimism of the poverty advocates, many people on welfare do take jobs and keep them. To these welfare leavers, self-respect and dignity are worthwhile in themselves.

People facing hard times need hope. They need to be reminded over and over again that no honest work is unproductive and that the most menial jobs have led to great fortunes. Go flip those burgers at McDonalds. More than half of the companys management, its CEO included, began their careers that way. Indeed, many hard-working people have left welfare just that way. The real path out of poverty, though often difficult, is clear and well trodden. You start by getting a job, any job. Then you do what it takes to keep it.


Linda Gorman is a Senior Fellow at the Independence Institute, a free-market think-tank located in Golden, Colorado

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