By Johnny Kampis | Missouri Watchdog
Wanted: a person to sit on the couch, drink beer and watch TV. Salary and benefits: $26,837 a year.
Do you think you could meet the qualifications? Then apply to go on welfare in Missouri.
A report released Monday by the Cato Institute said that despite those numbers, the Show-Me State is a mere 30th in the United States in average welfare benefits. Hawaii leads the pack with a $49,175 average – likely due to the high cost of living there, the authors note.
“The current welfare system provides such a high level of benefits that it acts as a disincentive for work,” wrote authors Michael Tanner and Charles Hughes.
They note that welfare pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit.
That’s true in Missouri, where the pretax wage equivalent of $22,800 — remember, welfare benefits are not taxed — averages out to a $10.96 hourly wage and is 73.1 percent of the average state median salary of $31,179.
Good “work” if you can get it.
The study points out that in most states, welfare benefits have increased since a previous 1995 report even when accounting for inflation – despite so-called welfare reform in 1996. Those benefits outpace the income recipients can expect to earn at an entry-level job, tilting the balance toward welfare and away from work, according to the report.
Average Missouri benefits increased $4,018 from the 1995 inflation adjusted number of $22,819, ranking the state 20th.
“If Congress and state legislatures are serious about reducing welfare dependence and rewarding work, they should consider strengthening welfare work requirements, removing exemptions and narrowing the definition of work,” Tanner and Hughes wrote.
Less than 42 percent of adult welfare recipients actually work, the report found, with the possibility that participation may actually be
lower. That’s because “work activities” such as job hunting and training often count. In total, less than 20 percent of welfare recipients
have unsubsidized jobs in the private sector, and many long-term recipients lack the skills necessary to get jobs that pay at least average wages.
Only 17 percent of Missouri’s Temporary Assistance for Needy Families recipients have jobs, according to the report, ranking the state dead last.
Michael Rathbone, a policy researcher for the free market think tank Show-Me Institute, told Missouri Watchdog the best ways to reduce poverty are to maximize job creation and provide better job training.
“Philosophically speaking, a government welfare program isn’t the best way to get out of poverty,” he said.
Welfare dependency is only likely to grow with the implementation of Obamacare, some experts say.
Ike Brannon, director of economic policy for the American Action Forum, testified before the House Ways and Means Committee in June 2012 that the law providing health insurance subsidies begins to phase out as a family’s income rises above 133 percent of the federal poverty level. Since the cost of health care is so high, families might be better off working less and keeping the subsidies.
“On top of the slough of already generous benefits it is sheer folly to add yet another that serves to further increase the effective cost of employment for the lower and middle class,” he said. ”No one is accusing people receiving these benefits and eschewing work to be lazy: People generally behave rationally, respond to incentives, and are well aware of the opportunity costs of their choices.”
The report from Cato, a Washington, D.C.-based public policy think tank, identified 126 separate federal anti-poverty programs that spend nearly $670 billion annually. States kick in another $284 billion.
In calculating welfare benefits, Tanner and Hughes assumed those on welfare collected from the most widespread of these programs, including TANF, Supplemental Nutrition Assistance Program, Medicaid and housing and utilities assistance.