Economy, Income Disparity, Media, News, Op-Eds

Libertarian Think Tank Conducts Welfare Study, Publishes Highly Misleading And Illogical Results

welfare dependence

The Cato Institute, a libertarian think tank founded as the “Charles Koch Foundation” in 1974 (source: PDF), recently released a study (PDF) that had the internet abuzz, because it seemed to indicate welfare pays better than a minimum wage job, and as such, needs to be cut so that people have incentive to work again. Not only is that extremely misleading, but it’s telling of the anarcho-capitalist lobby within the libertarian community — especially the Koch-funded part. Benefits are intended to keep people housed and from starving. When that’s more than minimum wage does, it’s time to raise the wage, not cut benefits and let them starve.

To start with, the study is a lie. Although the information isn’t completely false, the presentation of it is so misleading that it erases any real use of the data. As Raw Story explains,

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. (…)

They also acknowledge the central flaw in their conclusion: in real life the “typical” family in their study doesn’t come close to receiving the maximum benefit from every single program for which they’re eligible. But here the authors’ caveat doesn’t go far enough. Due largely to the fact that eligibility requirements have already become harder to overcome, these programs are helping fewer poor families get by. In 2009, around three out of four poor families with kids weren’t getting any TANF benefits. At the height of the economic crash, about 25 percent of those eligible for food stamps weren’t receiving them; during better times, that number hovers around 40 percent. And as the CATO study concedes, six out of seven poor families aren’t getting housing assistance.

So a study that claims to tell us about the “typical” poor family is really describing a rarity — the equivalent of a four-leaf clover. But the purpose of these studies isn’t to inform good policymaking. They feed a narrative that the poor are lazy and undeserving, and provide wonky cover for further weakening our social safety net. When studies like this one are picked up by the conservative media, all of the authors’ caveats tend to be stripped away, and they become straightforward claims that poor families sit back enjoying a good life, forcing overburdened tax-payers to pick up the tab.

Also, they admit that most of the poor express a desire to work. In fact, low wage employees are likely to be on assistance as well as working, simply because their employers don’t pay enough for them to pay their bills and eat. Meanwhile, the richest Americans get ever richer. Want to make some bets about where that money is coming from?

What libertarians and Republicans fail to understand is that the free market cannot be left in charge of poverty. Here’s why, explained in several easy-to-understand steps:

  • It costs a minimum amount of money to live in the United States, in order to pay for housing, food, etc., at the very least.
  • That amount of money can be determined, and is the poverty level.
  • The cost-to-live, or money needed to stay above poverty level, can come from one of two sources: private (usually a job), or public (government assistance).
  • If working full-time at minimum wage does not pay enough to keep people out of poverty, benefits are necessary to ensure that Americans aren’t dying for lack of money (you know, like those third-world countries we look down on).

And yet, the people opposed to welfare benefits are generally against a minimum wage increase as well, showing that their concern is not for the people, but for the money.

Read the case for an $11 minimum wage (want more? Let’s get this done first) here.

Reposted from Addicting Info with permission. 

About Justin Acuff

Justin Acuff is a political activist, writer and admitted news junkie. He has written hundreds of articles that have been read millions of times. Justin is a Senior Editor for Addicting Info, the owner and managing editor of Young Progressive Voices, and contributes to other publications as well. The best part? He isn't even 21 yet. Follow his Facebook fan page to get access to his latest articles, find his website here, or follow him on Twitter.


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