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Welfare Better Than Entry Level Jobs, Cato Institute Study Says

2:50 PM, Aug 22, 2013   |    comments
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A new study by the Cato Institute shows welfare recipients may be better off getting benefits than working in a minimum wage job.

The study's co-author Michael Tanner said, "The reality is people on welfare are not lazy. But they are also not stupid. If you pay them more to stay on welfare than to work, that's what they are going to do."

The study shows that in more than a dozen states, a family of three can live on what is essentially a middle-class salary without holding down a job, according to

Reporters for that website found that a combination of food stamps, temporary cash grants, WIC, and housing assistance is worth a pre-tax value more than $30,000 in 16 states. In Hawaii, the most generous state, a working family of three would have to earn almost $61,000 just to be even with the $50,000 in welfare the government hands out.

Full Copy of Study 

In Ohio a mother with two children participating in seven programs including food stamps, housing, Medicaid, cash payments and day care could get $28,723 in benefits.

Working a $7.85/hr minimum wage job for 40 hours a week would bring in less than $17,000.

Not all recipients participate in all seven programs.

WKYC spoke with Angela Delaboin who is trying to raise two daughters.

"The minimum wage is definitley too low. The cost of everything is going up. A lot of people are applying for benefits rather than work because you do end up getting more," she said.

The United Labor Agency's David Megenhardt helps people at the Employment Connection try to find jobs.

"There's a misnomer that if you reduce benefits and use tough love people will be more motivated to find work. We don't see it. What we see are people looking for work," he said.

Sacha McGee and her husband both lost their jobs. They were denied unemployment benefits and are supporting two children.

She's enrolled in Employment Connection programs and would be willing to take some minimum wage jobs.

"We didn't have a choice but to apply for assistance. We do have a family. Maybe if it was a career I wanted, I'll start at a minimum wage," she said.

The study's co-author Tanner said Ohio is also falling short on the welfare reform goal of having people on welfare do work.

"Ohio is 44th in the nation. Only 37.6 percent of welfare recipients are working and that is a very generous definition of work," he said.

He says the study challenges federal and state lawmakers to find ways to get more low-skilled jobseekers working in jobs that can support a family.

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