Thursday, December 14, 2017

The US Welfare State

American workers are among the most productive in the world, but over the last 40 years the bottom half of income earners have seen no income growth. As a result, since 1973, worker productivity has grown almost six times faster than wages.

The first myth to be dismissed is that Americans who receive public benefits are “takers”  is flatly untrue for the vast majority of working-age recipients. There are recipients of public benefits who do not work. They are primarily children, the disabled and the elderly – in other words, people who cannot or should not work. These groups constitute the majority of public benefits recipients.

Supplemental Nutrition Assistance Program benefits, formerly known as food stamps, which currently serve about 42 million Americans. At least one adult in more than half of SNAP-recipient households are working. And the average SNAP subsidy is $125 per month, or $1.40 per meal – hardly enough to justify quitting a job. Every dollar in SNAP spending is estimated to generate more than $1.70 in economic activity.
As for Medicaid, nearly 80 percent of adults receiving Medicaid live in families where someone works, and more than half are working themselves.
Welfare – officially called Temporary Assistance to Needy Families – has required work as a condition of eligibility since then-President Bill Clinton signed welfare reform into law in 1996. And the earned income tax credit, a tax credit for low- and moderate-income workers, by definition, supports only people who work.
Americans are spending more than one-third of their income on housing, which is increasingly unaffordable. There are 11 million renter households paying more than half their income on housing. And there is no county in America where a minimum wage worker can afford a two-bedroom home. Still, only 1 in 4 eligible households receive any form of government housing assistance.
Forty percent of Americans born into the bottom-income quintile – the poorest 20 percent – will stay there.  As for people born into the 'middle class', only 20 percent will ascend to the top quintile in their lifetimes.

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