Monday, August 19, 2013

Cato Institute Study Details Rise in West Virginia and Some Other States' Welfare Payouts

This week, Cato Institute released its 2013 version of "The Work Versus Welfare Tradeoff."  This study shows the growth of welfare state by state since the last time the study was undertaken almost twenty years ago.

Twenty years since the highly touted welfare reform brokered by Bill Clinton and the Republican Congress, welfare still looks like a better deal than work.  Cato says that "welfare benefits continue to outpace the income that most recipients can expect to earn from an entry level job."

In over 35 states, welfare pays more than minimum wage.  In 13, it equals a staggering $15 per hour or more.  Cato research found that welfare recipients would prefer to work, rather than receive payouts. On the other hand, they are reluctant to apply for what opportunities are available.

Cato focused its research not only on the Temporary Aid For Needy Families, or TANF.  These cash payouts tend to be relatively low.  By looking at the entire spectrum of programs, Cato saw a more complete picture of welfare's costs.

The study examines the problem from many angles.  For instance, Cato found that West Virginia's annual welfare benefit, after accounting for inflation between 1995 and 2012, rose by over $4,700 per year.  In 2012, the full welfare package equaled $27,727 in cash.

West Virginia ranked 28th on the list.  The top states and the District of Columbia paid staggering amounts, up to nearly $50,000 per year.

Not every state saw increases.  Eighteen states actually saw their payouts decline, most of these in the South and West.

West Virginia wages, however, only increased by $1,900 to $24,900 between 1995 and 2012.

Cato detailed changes in the food stamp program, housing assistance, medical assistance, and other programs when forming their conclusions.

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