CATO Institute Report Says Poor Americans Have It Too Good [View all]

[Purveyor]

By Joshua Holland, Moyers & Company
Thursday, August 22, 2013 8:12 EDT

Conservative think tanks have spawned a cottage industry churning out dubious studies purporting to show that poor families are living high on the hog on public benefits, a claim that anybody who has actually experienced poverty in America would find laughable.

These papers are then amplified by the right-wing media, forming the basis for calls to further eviscerate a social safety net that’s already been tattered and torn by 30 years of ascendant neoliberalism.

The latest addition to the genre is a study published this week by Michael Tanner and Charles Hughes at the CATO Institute. They calculated the maximum benefits of every federal anti-poverty program in which a single parent with two kids could participate, including things like tax credits for the working poor and supplemental nutrition and health benefits for pregnant women and young children, called it all “welfare” – a word that has long been unpopular to a public that otherwise supports measures to help the neediest – and used it to form the claim that “welfare” provides a perfectly decent quality of life.

Running the numbers in all 50 states and the District of Columbia, Tanner and Hughes claim that “the current welfare system provides such a high level of benefits that it acts as a disincen­tive for work” and urge lawmakers to “consider ways to shrink the gap between the value of welfare and work by reducing current benefit levels and tighten­ing eligibility requirements.”

Taken at face value, the study is actually a stinging indictment of America’s low-wage economy.

Taken at face value, the study is actually a stinging indictment of America’s low-wage economy. Only two of the 33 countries in the Organization for Economic Cooperation and Development (OECD) devote a smaller share of their economic output to programs that help poor families make ends meet than the United States – Mexico and South Korea. If those relatively stingy benefits provide more than one can earn working a minimum wage job – the authors say that’s true of 35 states – then the minimum wage is obviously not enough to get by on. Tanner and Hughes make much of the fact that in 13 states, the maximum benefits exceed $15 per hour, but according to MIT’s Living Wage Calculator, their hypothetical single parent needs to make at least $20.14 per hour just to cover his or her family’s basic necessities. That’s in the cheapest state – South Dakota. The nationwide average is $24.09 per hour. The federal minimum wage, had it kept up with American workers’ productivity, would fall somewhere between $16.50 and $22.00 per hour instead of $7.25.

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http://www.rawstory.com/rs/2013/08/22/cato-institute-report-says-poor-americans-have-it-too-good/