A new study claims that it's harder to make ends meet working a minimum wage job than if you are on welfare. The Cato Institute, which is a libertarian think tank, released the study which claims those on welfare make more than minimum wage workers in 35 states, Michigan included. It based this comparison on the fact that many welfare benefits are tax free. The Cato Institute claims this shows welfare benefits are too high and create a dis-incentive to work.
Well, well, the article that SA referenced has disappeared--but the article it referenced hasn't.
Michael D. Tanner wrote: Contrary to stereotypes, there is no evidence that people on welfare are lazy. Indeed, surveys of welfare recipients consistently show their desire for a job. But there is also evidence that many are reluctant to accept available employment opportunities. Despite work requirements included in the 1996 welfare reform, the U.S. Department of Health and Human Services says less than 42 percent of adult welfare recipients participate in work activities nationwide. Why the contradiction?
Perhaps itâ€™s because, while poor people are not lazy, they are not stupid either. If you pay people more not to work than they can earn at a job, many wonâ€™t work.
From an article by economist/writer Thomas Sowell,
People in minimum wage jobs do not stay at the minimum wage permanently. Their pay increases as they accumulate experience and develop skills. It increases an average of 30 percent in just their first year of employment, according to the Cato Institute study. Other studies show that low-income people become average-income people in a few years and high-income people later in life.
Walter Williams wrote an excellent piece on minimum wage recently,
Sounds like indeed the minimum wage needs to be raised!
Oh, something else to tickle those brain cells.
Jacob Goldstein wrote: The old economic idea is that people generally make rational choices about what's best for them. It follows that a bottom-up system that allows people to make their own decisions is often preferable to a top-down approach in which outside experts decide what will work best.