United States of Dependence: For Millions, It Pays Not to Work
Kids love Santa. They don’t have to work for the stuff on their Christmas lists; he just gives it to them.
In many states, gratuitous welfare benefits have made that childhood fantasy an adult reality. Professor Casey Mulligan of the University of Chicago and I have found that some families can receive the annualized equivalent of a six-figure income with no one working—and you’re paying for it.
During the pandemic, idled workers received unemployment “bonuses” so high that many were pocketing more than twice what they had been making on the job. Even without these extra weekly payments, unemployment benefits can reach unexpected high levels in many states. In New Jersey, for instance, a family of four with no one working can receive unemployment benefits equivalent to a job paying over $96,000. That’s more than the median household earns in wages and benefits combined.
High unemployment benefits are not unique to the Garden State. In 13 states, a family can receive annualized unemployment benefits worth more than the median household income. The value of unemployment benefits comes not just from their sheer size, but their tax advantages as well. Unlike earned income, unemployment benefits are exempt from payroll taxes, and six states also exempt them from the respective state income tax.
And while the pandemic-related unemployment benefits have ended, the Affordable Care Act (“Obamacare”) subsidies have just kept expanding. A program that was sold to the American people as a hand up for the poor has quickly been transformed into a handout for upper income earners.
In some parts of the country, a family of four earning over half a million dollars still qualifies for Obamacare subsidies. Those with a quarter million-dollar income qualify in nearly the entire country.
The annualized value of these healthcare subsidies and unemployment benefits for a family of four can exceed a six-figure income. In Washington state, the amount is more than $122,000, substantially more than many blue-collar incomes.
In fact, it is 32 percent more than the wages and benefits of the median household; 51 percent more than the median secondary school teacher’s wages and benefits; 95 percent more the median machinist’s salary and benefits, and 220 percent more than the median retail associate’s salary and benefits.
But Washington state is not alone. In 29 states, unemployment benefits and Obamacare subsidies are worth more than the wages and benefits earned by the median firefighter or truckdriver. In 14 states, these two programs pay annualized benefits exceeding the wages and benefits of the median electrician.
While our study examined only two welfare programs that are not means-tested, there is an entire suite of means-tested programs for which many people are eligible, and which together provide a surprisingly high standard of living.
In Loudoun County, Virginia, just outside Washington, D.C., you can receive over $25,000 in annual rental assistance alone—and that is just one program. Add to that food stamps, which have just been expanded, and subsidies for everything from education to transportation, and you have not just a robust social safety net but a perverse incentive not to work because even a small amount of income disqualifies you from receiving these means-tested benefits.
Many economists have been scratching their heads, wondering why so many workers are sitting on the sidelines today, despite four-decade-high inflation and the resulting record-high number of unfilled job openings. The expansion of welfare benefits—both in terms of eligibility and size of benefits—has provided a substantial disincentive to working. Businesses must not only compete against one another for workers, but against the dole as well.
While Americans are preparing for the most expensive Christmas ever, they are justifiably frustrated that they are working hard to earn a living while being forced to support so many others who aren’t working. That’s what happens when liberals play Santa Claus with your tax dollars.
This piece originally appeared in Fox News
I will do my best to keep this post as short as I can while still getting my point across that the system is BROKEN. In 1972, yes 51 years ago, I read an article in Boston newspaper and remember being very upset, A woman wrote that she had several children. Her husband worked 2 jobs and she worked as well- and they both were happy to do so to provide for their family.
Unfortunately, one of the children became ill, and the life saving medicine the child needed was extremely costly. The woman approached her local welfare office to attempt to get assistance with paying for her child’s medication. She only wanted help with the cost of the medicine. She was promptly told to become eligible for assistance with that, she must quit her FT job, and instructed her to tell her husband to quit his second job, then they would be able to get with utilities, Food Stamps, health insurance , and on and on and on. She argued that they did not want to do that, they just wanted to resolve her childs health issue- that is all she needed. Again, was told what she had to do to get assistance. She said although she did not want to, she may be forced , in order to save her child’s life, to do exactly what the State Welfare employee told her she had to do.
This all or nothing requirement is ridiculous . Able bodied should be forced to work before getting any help, and monthly benefits should be reduced by what amount they can earn. Of course things have only gotten worse here in good old Taxachusetts and welfare states over the past 50 years.
Thanks for allowing me to vent…
As you may know states used to be responsible for funding the Federal government. This ended when the fed was allowed to tax citizens directly. This was a mistake. To correct this I propose we make the states whose representatives vote to pass bills and budgets which exceed the feds income be held responsible for the overages. Since the president signs these bills and is the represents the entire country either all the states will be responsible or perhaps just the states he won the election in. Perhaps those states that elected the president and also has representatives that also voted for the bills would be charged a double portion of the overages. This could be written into a balanced budget bill. Let’s make this a part of the MAGA platform.
Government shouldn’t be allowed to provide any type of welfare. No social issues should be under government control. This is how we have wound up heading toward becoming a Socialist nation. We need to set social programs back to 1911.
My generation and those following in our footsteps are believers of living for today and expecting uncle sam to take care of us in our old age. We lived from paycheck to paycheck, squandered it all on the good life, drugs and booze. Retirement was something your old man did. That’s how we lived. We learned you can buy anything new; cars, houses, motorhomes with $0 down and no payment for 24 months. So we traded cars, houses and motorhomes every two years and never paid a dime. Can’t do that with used stuff, only new. Max out your credit cards and use one to pay the other, it’s easy. And if that doesn’t work, just get another one. So, that’s what you’re dealing with, generations of slacker, takers, druggies and boozers; we’re the; it’s all about me generations. We’re not dumb or lazy- why work when you can get whatever you want free. See ya on the slopes chump, oh, sorry you have to work – well, somebody has to but not me….
I am 72, retired and live quite well, that’s because I always put 10% of my earnings away for retirement. If you plan ahead and live within your means you can be self sufficient.
Sooner or later, these commies are going to run out of other people’s money. Then the whole shebang will come crashing down. A huge population of welfare mothers and children will be starving and the commie politicos will have no means to feed them.
Not everyone on assistance scams the system but I knew plenty of people in my youth who collected disability or unemployment and used that money on drugs or booze.
As a grandchild of ‘legal’ immigrants after WW1, all they knew was work. They never had much, they gave to many in need…they were always thankful for God’s provision and to be American!
A six figure household income on unemployment would have to include probably 6 members on the system. I doubt anyone dressed as in this article’s picture is on welfare.
Gainful employment is more than just a paycheck and money in the bank. It is about achieving success with positive results. Today’s socialist give-me or I’ll take it movement is eroding some people’s desire to accomplish, to be proud and say ‘I built that’. We have to trust that the majority of people are good, honest, hardworking and believe that the American dream isn’t about winning the lottery.
How do people in my situation make a living after have a round of cancer that has taken 5 years to battle ! I am on SS now and because I was forced on it early , it doesn’t go very far ! My past employers will have nothing to do with me due to my age and cancer diagnosis ! I am an inch away from living under a bridge !
I’m 75 and still have to work! Since I’m alone and mostly healthy, I really don’t mind working. I just resent that I REALLY HAVE TO WORK otherwise I would have to live in my car. That’s what happens when you previously worked as a straight commission independent contractor sales representative for small independent publishing companies. I wasn’t straight commission and independent by choice. They just couldn’t survive if they had to pay employee benefits. I never landed with a bigger company mostly because of Affirmative Action and being “white”! But I have an excellent job now and helping less fortunate friends and my struggling Church family and school. So, I feel really Blessed to have found this working opportunity.
There is nothing here about how many are getting these outrageous benefits. I can’t help but believe that it is very rare or the author would tell us.
I can’t get $70 a week from NC DES, and I worked for 55 years? I have done all they asked and they have rejected me for little things. Clearly North Carolina isn’t one of the give it away, or maybe they are.
Providing such high benefits spoils the system for helping folks during a rough spot. Imagine the moral decay for those taking advantage. There is certainly no benefit to society from this excessive handout.
Was I good patriot or a fool for living within my blue collar means for less than McDonald’s workers make today?
democrats love people who are dependent on them. It’s a way to control people. They have to vote you back into office to keep the gravy train coming.
To quote the late Rush Limbaugh, “It’s just very difficult to beat Santa Claus. It is practically impossible to beat Santa Claus.” Especially if you’re predisposed to being a leech.
The left is just buying votes. Democrats are the disease, Terminex is the cure!
& costing business Huge time
Dems Got the Welfare State they wanted via Wuhan virus
IT’S CALL BEING LAZY AND LOVING LIVING OFF THE SYSTEM. SOME PEOPLE DON’T CARE IF THEY ARE GETTING FREEBIES
Working for a living not only provides for your family, it also dignifies you.
This is just the beginning. They are getting used to the handouts and if the Dems have their way it will be a universal income. You will own nothing and be happy. The will give you so much and only allow you to take out so much at a time and if you do not behave they will cut you off and you’ll be SOL. Let’s not forget this and vote for constitutional candidates. Drain the Swamp!
How do you get these benefits? Our son can’t get a job although he applies and he can’t get unemployment. He had it for a short time, but never got the extra. Governor Ducey didn’t let anyone in Arizona have it. He’s in a very bad place. Also health issues. Should be on disability. I guess you have to know how to work the system
I have enjoyed many of your articles over the years but this was NOT one of them. It was totally one sided. Some of us can’t work–or should I say I can no longer work. I’m a retiree (80 yrs old). I get Social Security + a small pension, which adds up to less than $1500/mo. I have a Bridge card which enables me to buy groceries. I have worked at one job or another as soon as my kids were in school. My ex decided that he should not pay child support; the state could not catch him; he never filed for taxes. He died a few years ago. I just wanted to tell the other part of my story.
DEPORT ALL liberals, illegals’ AND THE ONCE HONORABLE fbi, STAT, TO MAGA
libs BUYING VOTES HERE AND WITH THE MULTITUDES OF ilegalls
Like anything the federal government is involved in , it’s a mess.
The Democrats have to keep providing these handouts because they don’t have an economic plan that works. All they know is to throw money at a problem. We need leadership, not santas in business suits.
At one time you had to prove you were looking for work to get food stamps or welfare checks. I had 5 kids, my husband had just had a stroke and I had just started my job in retail…minimum wage. Tried to get a ‘one time’ food stamps and was told I wasn’t eligible because I was only working 4 days a week at the time and she said I could find a job to work the other 3. Times have sure changed.
If you an EBT card (once called “food stamps”),you can eat better than the average WORKING adult. I don’t know if it works with EBT, but when my mom worked in a grocery, they’d use a $10 food stamp to buy a candy bar, then use the change to buy magazines and cigarettes!
Because of our greed, our welfare professionals actually do very well. You can buy almost anything new with 0 down and no payments for 18 months. You can move into a house or apartment and not pay rent for almost a year before you can be evicted. For medical care you can go to almost any ER and get treated, set up a payment plan and pay nothing. You’d be amazed at how many people do this. And with these liberal unemployment cycles and Covid free money coming to them from everywhere – they’re doing very well. They don’t worry about student loans; they weren’t paying on them anyway. And retirement – we’ll give them social security that they’ve never earned along with free medical care. These aren’t the homeless people.
It’s the onset of socialism, and promoted by the liberal Democrats, this administration will do nothing but go along and support this dangerous and trend, to simply buy more votes and lead America into a socialist country. That has always been their plan and it has been slowly implementing for decades.
This article only specifically mentions 3 states (New Jersey, Washington and Virginia) each of which are blue states. Other references to other states is only listed by number: “in 13 states” “in 29 states” “in 14 states” etc.
Let’s just make things clear here: these states referenced are All Blue Liberal States.
I live in a red conservative state that has always been and will always be conservative. So in a way it is kind of like living somewhat separated from the cancerous destruction of the of the liberal sociocomunist (un)idealistic moves.
However, regardless, it remains an insidious cancer in which only a couple cells can kill the body.
Geographically the red far overtakes the blue. And the red needs to use that strength to delete the cancer from our body.
I just wrote my quarterly tax check, this makes me furious. Not only are they making more money than me, no one can find any help.
How do we, the retirees who built this country get in on this transfer of money. I’m suggesting that we stop paying federal taxes to stop the spending from Washington. We need God back in our country. And get back to Churches helping folks instead of government. What kind of President do we have that allows ANYBODY to cross our borders, unchecked, bringing all kinds of diseases we thought we had conquered. And lining his pockets with millions of dollars from other countries, we help maintain THEIR borders.
Why are these states paying people more than they can make working? This makes no sense. I understood having a decent unemployment program when everything was closed at the beginning of the pandemic, but so many jobs currently remain open at least up to the start of the recession and they can’t fill these positions. Not having enough workers is causing the quality of work in so many businesses to decline. The unemployment program now needs to be limited to just a certain number of weeks and it should still require that the unemployed demonstrate that they are looking for work. This is greatly increasing taxes and keeping people from seeking unemployment. Having said all of this I know there are some people who can’t work, for many reasons, but most of the people on unemployment and getting other benefits can and should be working.
We are being told not to feed wildlife because it would become dependent on handouts yet we deliberately destroyed generation s of people with welfare No society can survive policies that right now are in place
And what is our new congress doing about it?
And sloppy keeps saying employment is high but businesses can’t find personnel.
Now we know why.
They are staying home on your dime.
The problem is that more and more people that would have never considered jumping on the “benefits” bandwagon are now saying “if they are doing this why should I work, especially for the equivalent of less money”? Americans used to have pride but now the almighty dollar has taken the lead and people don’t feel the shame of not working, even though they are capable of working. Why work if you have a boss you don’t like, you are fighting commuter traffic and you make the median income or less? Government has created this situation and they don’t care because it translates into perpetual power. We need term limits more than ever but the people making the laws won’t put themselves out of a job. The golden goose is being a politician, especially in a liberal state, regardless of party affiliation, even though the democrats brought this to normalcy.
In 20 days, SC is cutting SNAP payments by 50-55%. Curious to see what happens.
guess why no one wants to work at entry level jobs? we do not need to rise minimum wage. we need to reduce benefits.
Republicans hate the poor. Trump pays a lower tax rate than the poor and republicans congratulate him.
This administration knows if you put people on welfare it’s harder to take them off.
This has been a very carefully orchestrated plan to create the conditions that we are now experiencing and moving even farther into. Creating a dependant society means creating full government control over the population. Control over EVERYTHING in our lives.”The Great Reset” is moving forward at a rapid pace.This includes controlling voting by many different means. Manipulating the “real” votes and creating conditions that draw people to vote the way the REAL power wants them too and allowing non citizens to vote.People are far to complacent and willing to believe and follow anything that sounds good. That’s why the dumbing down of America has been happening and many other scenerios to create this Socialist/Marxist state we are entering. It has NOTHING to do with caring for people other than controlling them and thier vote.
We’re already a communist nation. We just don’t want to admit it. We’re the U.S.S.A.
the United Socialist States of America.
When over half of the nation pays no income tax, how do wethink they’re going to vote and who will they vote for ?
These are the same people that were b*tching that other people who with qualified disabilities got theirs go figure!
Has anyone noticed how quiet our friends who are Democrats are.
Part of transforming the United States into a social welfare state, like most of Europe, is replacing the American work ethnic with government dependency. That is what is going on here. Everything the Democrats do has a very specific purpose. It’s not rocket science.