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Posted Friday, August 13, 1999
The Snipe-O-meter has been called in to handle a particularly
annoying paragraph in the 8/16 Time magazine's lead story on welfare reform. Time's article
notes that welfare rolls have fallen almost 50%,
and then speculates that those who remain on the
rolls form "an entrenched group of welfare recipients
who show no sign of heading anywhere near the work force."
Author Adam Cohen sets up a somewhat ersatz debate between
liberals, who are said to want "greater investment in job
training, substance-abuse counseling and other programs to
help [recipients] overcome their various obstacles," and
conservatives who say those still on welfare are
"underachievers at best and shirkers at worst."
Soon Time has settled into the familiar
'conservatives say/liberals say' rhythm of
contemporary journalism. The conservatives
are ever so slightly ahead on points when you
get to the inevitable "balance" paragraph.
Time's text appears in boldface,
followed by context and perspective from
the kausfiles.com staff:
"Liberals point out that
the system is not creating the
right incentives. Most jobs taken
by former welfare recipients, according
to the National Governors' Association,
pay less than $7 an hour, not enough to
bring a three-person family above
poverty." ...
Did welfare reformers think most
welfare recipients would get enough
in wages alone to bring their families
out of poverty? No. Most welfare recipients
were expected to qualify for low-wage jobs
and then supplement their earnings by
claiming the Earned Income Tax Credit (EITC),
which uses the tax system to subsidize
low-income workers. The EITC has been
around since 1975, but was given a
substantial hike by President Clinton
in 1993 in a bold bid to solve
just this problem (to "make work pay"). Today, the federal
government spends more on the EITC (about $27 billion) than
it does on welfare. A
worker making $6 an hour
(or about $12,000 a year) can claim an
EITC of about $3,800, for a total of
$15,800. That's more than enough to bring a
family of three above the poverty line
(which is about $13,100). On top of this, the $6/hour worker
remains eligible for about $1,400 in food stamps.
"Often welfare recipients who get
jobs make less in salary and benefits
than they received on welfare." ...
How often is "often"? In a state with average
welfare and food stamp benefits of a little
over $700/month, even a minimum wage worker
putting in 35 hours a week makes more in
"salary and benefits." More important,
she doesn't have to live on "salary
and benefits" alone. Time again conveniently ignores
the EITC (good for more than $300 a month). Plus this
ex-recipient still qualifies for food stamps
of about $150 a month. Even in high
benefit states (e.g., California gives over
$800 in welfare/food stamps)
anyone with two kids who takes a full-time
job --or even a half-time job at $6.50 an
hour -- winds up with more income.
"Staying on welfare in that case is not
poor motivation -- it's common sense." ...
Both liberals and conservatives used to
make this argument -- "Of course
people stay on welfare, it pays
more than low-wage work." They
don't make it much anymore, because it isn't really true.
You see, there's now this thing called the
EITC ... Have I mentioned it? ...Time must have accidentally
reprinted this sentence from a 1970s issue.
"Wendell Primus, director of income
security at the Center on Budget and
Policy Priorities, says the answer is to
use tax credits for low-paid workers
to tilt the balance in favor of work." ...
Hey, now there's a great idea. Why didn't
someone think of it before? We could call it... the
Earned Income Tax Credit! You morons, it already
exists! What Wendell Primus is talking about is
boosting the existing tax subsidy even
higher, perhaps at the state level. That
may be a good incremental change, but
it's not the pathbreaking
"answer" Time implies it is.
The Fraud of Iowa, Part One
Will Tina Fire Lucinda?
The architects of the paradigm-shattering kausfiles.com
business model want shorter postings, and more frequent postings.
"Think New Republic 'Notebook' item," they helpfully
suggest. Over the next few weeks, you may or may not notice
this change occurring.
Copyright 1999 Mickey Kaus.
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