Almost three years ago we warned of the consequence of the disincentives for the working man in the US at the lower-income level. Then, last November we noted the dismal fact that 'work is punished' in America for a large majority of the non-elites. And now, as the part-time new normal becomes more and more understood in the mainstream, we ask once again... If you could stay home and relax all day and actually make more money than you do at your current job, would you do it?
Submitted by Michael Snyder of The Economic Collapse blog,
That sounds crazy, but this is actually a very real dilemma for millions upon millions of Americans. According to a shocking new study that was just released by the Cato Institute, people on welfare are actually better off than minimum wage workers in 35 U.S. states. And in 13 states, those on welfare actually do better than those making $15 an hour. So why bother?
It is very difficult to find a job in this economy, especially a good one. As I mentioned yesterday, seven out of every eight jobs that have been "created" since Barack Obama has been president have been part-time jobs. Why slave away flipping burgers, stocking shelves for some retail giant or working for some temp agency when you could just sit home and make more money collecting government checks? Yes, there is definitely a minority of Americans that hate the idea of becoming dependent on the government and would never want to take advantage of the system like that, but that minority seems to be shrinking. At this point, about half the country gets money from the government each month anyway, so why not collect "your share"?
If someone is offering to give you something for free, it is only human nature to be at least a little bit tempted. And right now the federal government is making it extremely tempting to give up on work entirely and become a permanent welfare check collector.
Before people start getting really upset, let me once again reiterate that most of the people that are receiving financial assistance from the government actually need it. Not everyone is abusing the system, and not everyone is using their food stamps to buy lobster.
Poverty in the United States has absolutely exploded in recent years, and our economy simply does not produce enough jobs for everyone anymore. We certainly do not want those without jobs to go hungry or to be sleeping in the streets.
But what we have today is a situation where there is a huge incentive in many states to actually give up on work entirely and become a dependent of the state instead.
According to the Cato Institute, someone in the state of New York that goes on welfare can bring home more in money and benefits than an entry-level school teacher makes in an entire year...
The federal government funds 126 separate programs targeted towards low-income people, 72 of which provide either cash or in-kind benefits to individuals. (The rest fund community-wide programs for low-income neighborhoods, with no direct benefits to individuals.) State and local governments operate more welfare programs. Of course, no individual or family gets benefits from all 72 programs, but many do get aid from a number of them at any point in time.
Today, the Cato institute is releasing a new study looking at the state-by-state value of welfare for a mother with two children. In the Empire State, a family receiving Temporary Assistance for Needy Families, Medicaid, food stamps, WIC, public housing, utility assistance and free commodities (like milk and cheese) would have a package of benefits worth $38,004, the seventh-highest in the nation.
While that might not sound overly generous, remember that welfare benefits aren’t taxed, while wages are. So someone in New York would have to earn more than $21 per hour to be better off than they would be on welfare. That’s more than the average statewide entry-level salary for a teacher.
If you are going to live off of welfare, the key is to pick the right state. Not all states offer the same level of benefits.
In some states, you have to make far more than the minimum wage before it pays not to be on welfare. In fact, there are 12 different states where you actually have to make more than $15 an hour before you start doing better than welfare recipients...
Nationwide, our study found that the wage-equivalent value of benefits for a mother and two children ranged from a high of $60,590 in Hawaii to a low of $11,150 in Idaho. In 33 states and the District of Columbia, welfare pays more than an $8-an-hour job. In 12 states and DC, the welfare package is more generous than a $15-an-hour job.
Of course not all welfare recipients take advantage of all of the programs that they are eligible for. But if you do know how to work the system, you can live very comfortably at the expense of the government in many states.
So what is the solution?
Well, it would be great if we had enough jobs for everyone, but that is definitely not the case. In fact, the U.S. economy is probably going to continue to lose good jobs in the years ahead if current trends continue.
Unfortunately, that also means that poverty and dependence on the government are likely going to continue to grow, especially when the next major wave of the economic collapse strikes.
If you want to get an idea of where we are headed, just look at Detroit. Once upon a time, Detroit actually had the highest per capita income in the entire country. But now it is a rotting, festering, bankrupt hellhole where tens of thousands of stray dogs freely roam the streets...
As many as 50,000 stray dogs roam the streets and vacant homes of bankrupt Detroit, replacing residents, menacing humans who remain and overwhelming the city’s ability to find them homes or peaceful deaths.
One Humane Society official that recently visited the city to help deal with the dog crisis described what she witnessed as "almost post-apocalyptic"...
The number of strays signals a humanitarian crisis, said Amanda Arrington of the Humane Society of the United States, based in Washington. She heads a program that donated $50,000 each to organizations in Detroit and nine other U.S cities to get pets vaccinated, fed, spayed and neutered.
Arrington said when she visited Detroit in October, “It was almost post-apocalyptic, where there are no businesses, nothing except people in houses and dogs running around.”
“The suffering of animals goes hand in hand with the suffering of people.”
But don't laugh at Detroit.
The rest of the country is going down the exact same path.
Just recently, Charles Nenner told Newsmax TV that another recession is rapidly approaching that that it is "going to be bad"...
Technical analyst Charles Nenner didn’t mince words when asked about the United States facing another recession.
"It's going to be bad," Nenner told Newsmax TV in an exclusive interview.
And it looks like the folks in Washington are getting very concerned about all of the economic warnings signs that we have been seeing as well.
Just this week, Barack Obama "held a special, closed door meeting with the heads of the U.S. government’s financial, monetary and oversight agencies. It included members of the Federal Reserve, the FDIC, the CFTC, the SEC, and the Federal Housing Finance Agency."
So why did Obama gather all of the top financial officials for a secret closed door meeting?
John Embry told King World News that he thinks it is because the administration is deeply alarmed about what is happening in the financial markets...
I firmly believe the reason the President has called this meeting today is because if interest rates in the U.S. continue to rise, it could really unleash something disastrous. We are talking here about the possibility of a meltdown. It’s interesting that the President would call in that many big hitters, the head of every significant financial agency in the United States, as well as the Fed and the Comptroller of the Currency, etc -- this is a very large meeting today.
I’ve always believed that the global financial crisis of 2008 was just the opener. We have now bought the better part of 5 years now through unlimited money creation. But as we head into this next massive, and what I believe will be a larger round of destabilization, I want KWN readers around the world to understand that the central planners don’t have the same weapons to fight this global financial crisis. This is why I believe they are desperately attempting right now, today in this meeting, to stave off this crisis.
And the truth is that our "leaders" in Washington have good reason to be concerned. If interest rates keep going up rapidly we are going to be in for a world of hurt.
Sadly, most Americans seem to have already forgotten how painful 2008 was, and that was only a preview of coming attractions.
The worst economic crisis in the history of the United States is on the horizon, and most people are going to be absolutely blindsided by it.