A new report by the libertarian-leaning Cato Institute provides overwhelming evidence that welfare in Alabama and many other parts of the country has become more like a spider web than the safety net it was intended to be.
According to the Cato study, welfare recipients in Alabama can receive benefits that are the equivalent of a $23,310 yearly salary, which is what they would receive for making $11.21 an hour at a full-time job.
“Most reports on welfare focus on only a single program, the cash-benefit program Temporary Assistance for Needy Families (TANF),” Michael Tanner and Charles Hughes of the Cato Institute explained. “But this focus leaves a misimpression that welfare benefits are quite low, providing a bare subsistence level of income. In reality, the federal government currently funds 126 separate programs targeted toward low-income people, 72 of which provide either cash or in-kind benefits to individuals… Of course, no individual or family receives benefits from all 72 programs, but many recipients do receive aid from a number of the programs at any given time. The total value of welfare received, therefore, is likely to be far higher than simply the level of TANF benefits.”
The value of benefits has also increased significantly since that last round of welfare reform in the mid-90s.
When adjusted for inflation, the value of welfare benefits in Alabama has increased $5,760 since 1995. That’s the ninth highest increase in the nation over that time period.
But Alabama is not alone.
Welfare currently pays more than a minimum wage job in 35 states. In 12 more states, an individual leaving welfare for a job paying the same amount would see a decline in actual income. Welfare pays more than $15 an hour in 13 states. In 11 states, welfare pays more than the average pre-tax first year wage for a teacher. In 39 states it pays more than the starting wage for a secretary. In 3 states welfare recipients can take home more money than an entry-level computer programmer.
The median salary in Alabama is $29,848. That means a person on welfare can make 78.1 percent of the state’s median salary and live at 136 percent of the federal poverty level.
In short, the Cato study suggests that the current level of welfare benefits discourages recipients from going out and getting an entry-level job. Alabama’s current minimum wage is $7.50, and even President Obama’s proposal to raise the minimum wage to $10.10 pales in comparison to what an individual could receive by participating in the various welfare programs available to them.
A package of welfare reform bills is currently making its way through the Alabama legislature.
The bills allow drug testing of some welfare recipients; make it a crime to defraud public assistance programs; require welfare applicants to prove they are trying to get a job; and prohibit welfare recipients from spending benefits on alcohol, tobacco, strippers and gambling.
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