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WASTE WATCH: Federal Welfare versus working

Updated: Wednesday, August 7 2013, 07:04 PM CDT
Welfare benefits continue to outpace the income that most recipients can expect to earn from an entry-level job -- and the balance between welfare and work may actually have grown worse in recent years.

But how do our states -- Florida and Alabama -- rate when it comes to keeping those benefits in balance?
The federal government is funding 126 programs targeted towards low-income people -- 72 of which provide either cash or in-kind benefits.
   
Welfare currently pays more than a minimum-wage job in 35 states -- including Alabama.
"I think sometimes we do a little bit too much for some people that just like to live off of benefits when they're able bodied and they can go out there and work," says disabled veteran Michelle Doolin.
   
A recent study from the CATO Institute finds that in 33 states, the equivalent wage value of welfare has *increased* since the last study was conducted in 1995.
   
Alabama's has increased by close to 8,000 dollars -- ranking 32nd nationally.
Florida has reduced its pay out by almost 6,000 dollars -- the Sunshine State ranks 46th.
   
Up or down -- the numbers have many asking if the current level of welfare benefits makes the choice to work a rational alternative?

"I had a guy one time I was going to hire, and I was going to pay him a certain amount of money. And he was making so much there, so he didn't want to come to work for me for 50 dollars a month. That's what he would he would make. So he didn't come to work for me," says Pensacola's Jerry Stoddard.
   
Alabama's pre-tax equivalent works out to an $11.21 hourly wage -- or more than 78 of the state's median salary.

Florida's pre-tax equivalent is a $6.06 hourly wage -- just 41 of median salary.
The welfare benefit in Alabama is better than 136% of the Federal Poverty level.
   
Florida's sits at better than 92% of the FPL.
Increasingly, welfare can become a system that's hard to get out of.

"I wish our system was more motivating, and not almost encouraging people to stay at a certain level in order to get assistance," says Sharntivia Swift. "I feel like it's kind of set up backwards. Now how do they fix that...I don't know."
    
The rapid expansion of refundable tax credits has reduced the tax penalty for leaving welfare for work in some states.

While this is a step forward -- such benefits are small -- and may not be enough.
    
You can be sure that Welfare Reform will continue to be a hot topic in Washington and for state capitol's across the country.

WASTE WATCH: Federal Welfare versus working


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CATO Institute

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