Why a single mom is better off with a $29,000 job and welfare than taking a $69,000 job.Where is the incentive?

Question

http://www.aei-ideas.org/2012/07/julias-mother-why-a-single-mom-is-better-off-on-welfare-than-taking-a-69000-a-year-job/

"The U.S. welfare system sure creates some crazy disincentives to working your way up the ladder. Benefits stacked upon benefits can mean it is financially better, at least in the short term, to stay at a lower-paying jobs rather than taking a higher paying job and losing those benefits. This is called the “welfare cliff.”

Let’s take the example of a single mom with two kids, 1 and 4. She has a $29,000 a year job, putting the kids in daycare during the day while she works.

As the above chart – via Gary Alexander, Pennsylvania’s secretary of Public Welfare — shows, the single mom is better off earning gross income of $29,000 with $57,327 in net income and benefits than to earn gross income of $69,000 with net income & benefits of $57,045.

It would sure be tempting for that mom to keep the status quo rather than take the new job, even though the new position might lead to further career advancement and a higher standard of living. I guess this is something the Obama White House forgot to mention in its “Life of Julia” cartoons extolling government assistance"

Answer 1

This is why welfare should be graded out like a sliding scale as your circumstances improve.

Answer 2

Frankly, I couldn't answer your question without a lot more information. I'm not sure how much she would get in food stamps with $2200 a month income and three people. She's lucky if she can get Section 8 housing, as most places the waiting list is 2 to 5 years. She would qualify for CHIPS and Medicaid, but I don't know how to value that. That's about it as far as I know of.



With the $69,000, I'm sure she would lose at least 20% in income taxes and an additional 8% OASDI, so that would knock her take home down to $49,680. She would no longer qualify for food stamps. Her kids might still qualify for CHIPS, but she probably wouldn't qualify for Medicaid any more. Then there are the other costs that she would incur just by having a job, like business appropriate clothing, transportation costs, etc.



It still looks to me like she would be better off working, but like I said, I don't know if there's anything else I didn't include in her welfare budget.

Answer 3

I am not sure if you have 6 or seven kids..but that doesn't matter..if i was you i would bring them to the welfare office and leave them there for whole day, so thee unappreciative workers there will learn their lesson I am sure your lovely kids don't go hungry..just look at you How they can even think that? Take the kids with you and you' ll see, all of your inquiries will be taken care of in no time

Answer 4

It's a completely RIGGED analysis. No link is provided to the chart or where the data comes from. The author CLAIMS it comes from Gary Alexander, but the link provided leads to an unrelated page about medicaid reform. A Google image search on the chart leads to a few right-wing websites. I challenge the author show me an example of a working mother with a child who is collecting $40,000 of welfare benefits in a single year.



Notice that the biggest benefit on that chart is CHIP. This is health insurance for uninsured children of low income individuals, but just about any $69k/year job offers health insurance coverage for the employee and her family. Also, several employers offer childcare. This is deceptive tactic the author is using. He is assuming that employers provide no benefits. We know that isn't true, and we know that generally higher paying jobs offer MORE benefits.



" THE POINT IS SHE GETS $28,000 A YEAR IN AID WHILE WORKING A $29,000 JOB!!!!!"



Show me one REAL example of a person who gets $28k in aid while they are working for $29,000 a year.

Answer 5

1. There is no choice involved. It's only a hypothetical case.

2. The benefits are not for the mother but for the children. We have a low birth rate. If we want a future with "Posterity", we have to pay for it. With all the money in the hands of the top 10%, the bottom 90% can't afford to have children without taxing the 10% to provide benefits for the children.



End the inequality or kwitcherbellyakin'!

Answer 6

Contrary to what people think, I know the woman would rather have the higher paying job than be on welfare. If a woman was offered a Top level position at a company, out of respect and status she would take it over having to be on welfare. Yet so many people think she'd turn it down so she'd stay on welfare. There's something about being able to tell your friends and relatives that you have a high paying important job. And believe me, if she's willing to work fast food then she'd definitely work at an important high profile job. So you cant say she's lazy if she's getting up going to work for a few dollars at Burger King.

Answer 7

I am working with a woman who has two kids by two different daddies, collecting child support, and welfare as a single mom, she has two jobs, and lives with her mother who has two jobs, and brings in a hefty welfare haul, she has no incentives to do better except maybe have another kid and rake in even more.

Answer 8

I didn't wade through your math but most single moms can't qualify for a $69k job. All across America they are lucky to land a job at Walmart.

After paying daycare, maintaining wardrobe, can't afford a car and are making $7.99 per hour, after taxes they need government assistance.



Have some compassion.

Oh crap, I've become a commie ;) Darn! Now I hate myself ;) I must repent from my evil conservatism.



EDIT:

Where are the men? Where are the fathers? Why are there single moms?

Don't get me started.



Wanna twist your mind?

http://www.youtube.com/watch?v=pFwR1c-cdFw

koyaanisqatsi is a Hopi Indian word for life out of balance.

America is a little weird right now, but maybe we will get over it.

Answer 9

Interesting thread!

Answer 10

Can you give an example of a 69, 000 dollar job that affords enough time for a woman to actually be a single mom?



Also I guess the study forgot to mention that extra net "income" is actually savings in sales tax for food items, which is wavered for food assistance.



A cartoonish attempt to generate a talking point about government dependency, rather than discuss the issue of salary in relation to costs of living in the US.

Answer 11

what is the Q?



clearly at the low end of the economic ladder climbing a few steps does NOT result in an total increase



but if there were more support on the way up it would be a good choice



It is VERY VERY costly to be poor



what does the white house have to do with the equation?



discourage single parenthood, but support children

Answer 12

If you have two kids then you will pay one whole salary for it, if you don't have relatives that will do it for free.



My wife and I finally decided that it wasn't worth the extra FIFTY bucks a week for her to work full time and pay people to look after our kids.



We went down to one income and lived paycheck to paycheck, but she got to be a mother to her children, which is precious.



But keep on trying to find the welfare queens and frauds, I'm sure that you are contributing to being part of the solution not the problem.

Answer 13

Hahahaha. It's easy when you make up your own numbers rather than dealing with reality. "$57,327 in net income and benefits"? According to WHO? I have no doubt that the supposed bump of nearly 30k is complete Right wing fiction.



Y'all do crack me up.



As I suspected... a graph with unexplained figures. What exactly does "Energy" or "Housing" or "MA" represent? The graph nor the article explain the assumptions that are being made in order to reach its conclusions. In other words, its worthless as an objective tool for comparison.

Answer 14

Yeah. You find me one person making $29K/yr and offer them a job making nearly double at $57k/yr and who refuses that pay increase. You think someone would actually do that because of a couple hundred dollars of food stamps each month?



Republicans really dont have faith in Americans anymore. Y'all are done

Answer 15

The question is pointless. All you have done is copied and pasted an article without putting any thought into it.

Answer 16

And we wonder why we have an entitlement problem in this country...