Daniel J. Mitchell

About two years ago, I shared a map put together by a pro-statism organization that supposedly showed that welfare benefits were very miserly and not sufficiently generous to lift people out of poverty.

My gut instinct was to reject the findings. As I wrote at the time:

The poverty line is set considerably above a level that would indicate material deprivation…far above the average level of income in most nations of the world. …Welfare checks are just one of many forms of redistribution, and the data used to create the map do not count food stamps, Medicaid, housing subsidies and a plethora of other means-tested programs.

My skepticism was further augmented when I ran across an amazing chartshowing that it made more sense to live off the government in Pennsylvania rather than earn more income.

It turns out that I was right to be skeptical. My colleagues at the Cato Institute have just released a detailed study calculating the amount of handouts available in each state. They then investigated whether the level of redistribution was so high that people might decide it didn’t make sense to be productive members of society.

You probably won’t be surprised to learn that it’s better to live off the government in most states.

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. The current welfare system provides such a high level of benefits that it acts as a disincentive for work. Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit, and in 13 states it pays more than $15 per hour.

Here are some of the details from the study, which used the example of a mother and two children.


Daniel J. Mitchell

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute.