Yes, Government Is Paying People Not To Work
Happy New Year taxpayers! A new Committee to Unleash Prosperity study found that many states are paying families more than $75,000 in annualized welfare benefits in 2022.
Why are there still three to four million fewer Americans working than before COVID even with millions of job openings? One reason, said our friend Stephen Moore, who heads the Committee to Unleash Prosperity, is that in more than 20 states a family of four can get benefits that exceed the pay of a construction worker, a mechanic, a security guard, or a factory worker.
The study was conducted by Casey Mulligan, a Professor of Economics at the University of Chicago, who served as Chief Economist at the White House Council of Economic Advisors, and EJ Antoni, a Research Fellow for Regional Economics in The Heritage Foundation’s Center for Data Analysis. Both are Senior Fellows at the Committee to Unleash Prosperity.
Mulligan and Antoni found that even after temporary COVID benefit programs have expired with existing unemployment benefits and the dramatic recent expansion of ObamaCare subsidies, a spouse would have to earn more than $80,000 a year from a 40 hour a week job to have the same after-tax income as certain families with two unemployed spouses receiving government benefits.
In those states, working 40 hours a week and earning $20 an hour would mean a slight REDUCTION in income compared to two parents receiving unemployment benefits and health care subsidies.
Here’s a chart from the CTUP study showing you where to move if you’d like to take advantage of this government largess along with income data on a few occupations that are effectively a losing proposition for workers in high benefit states.
Here are the key points from the chart:
In 2020 and 2021, weekly supplemental unemployment benefits were available in various amounts, ranging from $300 to $600. For many of the unemployed, total weekly benefits exceeded take-home pay from working, resulting in millions of additional unemployed. When the $600 weekly supplement was in place, even those earning the median income could receive more from not working. Even with the $300 weekly supplement, when combined with Affordable Care Act (ACA or “ObamaCare”) subsidies, a family of four with both parents not working could receive aid from just these two programs that was the annualized equivalent of $100,000 a year in salary in 19 states.
Now, wrote Mulligan and Antoni, even without the supplements, normal unemployment benefits and expanded ACA subsidies today can still provide the annualized equivalent of $100,000 a year in salary in 3 states and the equivalent of at least $20 an hour wage in 16 states.
We’ve just hit a few of the high points of the study – click here to see the entire study for more eye-popping data points, like where you can earn $638,188 and still get an Obamacare subsidy, and it’s not California, but a Republican-run state.
As Steve Moore said in the Committee to Unleash Prosperity Hotline newsletter announcing release of the study, “Paying people NOT to work is a dumb government policy that is bad for businesses, taxpayers, and families.”
American work ethic