Most Americans believe, as we do, in a reliable government safety net in America, so that when people fall on tough times or lose their jobs, their families will not go hungry, lose their homes or suffer deprivation. But most Americans also believe that government assistance should be short-term and aimed at quickly getting people back on their feet, into a job and on the road to being financially self-sufficienct and a contributor to our economy.
Today’s welfare programs are failing to accomplish that goal.
Did you know that families earning half a million dollars a year can receive ObamaCare subsidies? Or that in some states, unemployment insurance benefits can be equivalent to a job with an annual pay of $100,000?
It’s shocking but true, and it might explain why so many businesses can’t get workers back on the job almost three years after COVID-19 hit these shores. Today there are still at least 3 million fewer Americans working than there were in 2019.
Middle class last
There are many reasons for the worker shortage, but one is that in many states, welfare pays more than or nearly as much as respectable middle-class jobs.
Under presidents Barack Obama and Biden, many of the highly effective work requirements, which were instituted in the historic 1996 bipartisan welfare reforms, have been eviscerated. Often limits for public benefits have also disappeared while Congress and states have made benefits more generous.
Many programs, like the supplemental nutrition assistance program (a k a food stamps), are means tested, so that only low-income people qualify for them. But other handouts are not — including unemployment insurance and ObamaCare subsidies.
The value of these benefits can be staggering — much higher, in fact, than many blue-collar professions. In our new study with the Committee to Unleash Prosperity, we found the following:
- In 24 states, unemployment benefits and ObamaCare subsidies for a family of four with no one working are the annualized equivalent of at least the national median household.
- A family making almost a quarter of a million dollars annually still qualifies for ObamaCare subsidies in every state.
- In a dozen states, the value of unemployment benefits and ObamaCare subsidies exceeds the salary and benefits of the average teacher, construction worker, electrician, firefighter, truck driver, machinist or retail associate.
- In New Jersey, a family of four can receive benefits equal to an annualized earned income of $108,000 with no one working.
- In Connecticut and New Jersey, a family earning $300,000 a year can receive ObamaCare subsidies
- New Jersey is a state where a family can earn the equivalent of $100,000 a year if both parents are collecting unemployment benefits and ObamaCare subsidies for health care. In Connecticut the benefits can reach $80,000.
To be clear, unemployment insurance is at least time-limited to six months in most states. But while Americans are receiving those benefits, the financial incentive to jump into the job market is low.
In addition, people move in and out of the unemployment system — working enough months until they again qualify for benefits.
Our numbers also don’t include the rampant fraud payments that exceed $100 billion a year. This means families that are not technically eligible for food stamps or continued unemployment benefits are still receiving them.
Dem donors profit
It is particularly troubling that these programs, which were purportedly put in place as a safety net for lower-income families, have been expanded to the point that their greatest benefits go to upper-income earners, including households earning half a million dollars in annual incomes in some states.
The Biden administration’s expansion of ObamaCare has been a handout to the wealthy donor class of the Democratic Party, while doing nothing to help those who are truly poor.
The expansion of the welfare state has created situations where work often doesn’t pay. In many states, working a $20-an-hour job for 40 hours a week would mean a reduction in income compared to two parents receiving their unemployment benefits and health-care subsidies. Until the unemployment runs out, there is very little incentive to go back to work, especially when the family is receiving more than their blue-collar counterparts who are on the job.
If that sounds like an exaggeration, consider that the median household’s annual income and benefits are worth about $93,000. In New Jersey, unemployment benefits and ObamaCare subsidies alone are worth an annualized $122,000 — that’s 30% more for not working in most occupations.
Government dole
But even the median value of annualized state unemployment benefits and ObamaCare subsidies across the country is relatively high at $69,000. That’s more than the income and benefits of the median firefighter, truck driver, machinist or retail associate.
This also raises basic fairness questions. Is it fair that, in most states, a family can earn about as much as or even more than a construction worker, a security guard or a dental assistant?
We do not believe that these programs that discourage work are to the benefit of the families that receive the welfare program assistance. Most studies conclude that work is associated with happiness, more financial security over time and better health with a longer life expectancy.
The whole idea of welfare — when many of these programs were started 50 years ago during the Great Society — was to get Americans back into the workforce. President Lyndon B. Johnson famously declared that “the day of the dole are numbered.” In the 1990s, Congress aimed to “end welfare as we know it.” None of these goals has been achieved. In many ways welfare is more generous than ever.
Our goal is to achieve a just and productive society and make America a place that rewards work — not welfare. But the left has adopted a strategy of a “national guaranteed income” for Americans whether they work or not. The result is a record-low labor-force participation rate — meaning fewer Americans working and higher taxes for those who do work.
