Advocates Blast Report That Says Welfare May Be Too Generous

Aug 19, 2013

A report out this morning from a conservative think tank says welfare benefits are so generous that they’re keeping recipients from seeking out work. But advocates are blasting that as unfair, incomplete and wrong.

The Cato Institute’s report, called “The Work Vs Welfare Trade Off”, attempts to add up the value of benefits such as Medicaid, housing vouchers, food stamps and utility assistance. The report makes it clear early on that there is no evidence that people receiving welfare benefits are lazy or don’t want to work. But the report says the value of those benefits – totaling around $29,000 in Ohio – provide a disincentive to people to get into the workforce. Greg Lawson with the conservative think tank the Buckeye Institute has read the report, and says it makes a strong case that welfare benefits may not be helping those recipients get out of poverty.

“What actually happens is they never bother to grab that first rung on the ladder to climb out of that problem because they actually end up worse off by working than they do by maintaining what benefits they have. No, it may not be luxurious, but it is stability. And it is, certainly, more than survival,” says Lawson.

But one advocate who works with low-income Ohioans says the report is misleading and irresponsible. Jack Frech heads the Athens County Job and Family Services department. He says it’s unfair to consider Medicaid and housing vouchers along with other assistance, since they aren’t cash and can only be used for specific purposes. And he says the implication that these families are too well off on welfare to go to work isn’t correct.

“In reality, a lot of these families have so little money," says French.  "While they may be able to go to the doctor, they can’t even go to a drugstore and buy band-aids. They can’t buy diapers. They can’t buy personal hygiene products because they literally just don’t have enough money to meet their basic needs. And for the Cato folks to imply that these folks are so well off that they have no incentive to work is simply untrue.”

And Frech says welfare recipients take whatever jobs they can find when they become available, but they’re often part time and don’t lead to better opportunities and a chance to replace the benefits they’ve lost.

“It’s clear that there is an incentive for them to do that because they get more money in their pocket by taking almost any job. A lot of these folks have a lot of serious barriers to overcome in taking these jobs, but it is, in the current system, it is financially in their best interest to take those jobs.”

But Lawson says he fears welfare benefits are keeping people from accepting lower-paying, lower-level jobs that could turn into bigger, better positions eventually. And he says that goes against the whole idea of the social safety net.

“That’s not beneficial. That’s not compassionate. That’s not helpful in any way, shape or form. In fact, it’s the complete and utter reverse of all of those things. So I think there’s a very misguided concept that some of these advocates for some of these programs have,” says Lawson.

There are around 130,000 welfare recipients in Ohio – around half are children. The Cato Institute’s report suggests that states should strengthen work requirements and tighten eligibility standards. But Frech says that’s been happening over the last few years, noting that 100,000 people have been thrown off the welfare rolls in the last two years, and that Ohio has been cracking down to avoid $135 million in penalties for not meeting those tougher welfare-to-work requirements.