Myth: Welfare gives people an incentive to avoid work.
Fact: Over 100 studies have not found this alleged incentive.
Statistics show that average welfare benefits pay below the poverty line and less than a full-time job. Research overwhelmingly proves that welfare recipients prefer work to welfare. The General Accounting Office has reviewed over 100 studies on welfare and concluded that welfare does not significantly diminish the incentive to work.
Many conservatives argue that welfare provides people with an incentive to avoid work. However, the statistics do not bear out this accusation. Let's divide our answer into two parts: first, a look at how low the "incentives" really are; and second, how many individuals are responding to these incentives.
How much does welfare pay?
The two largest welfare programs -- by far -- are Aid to Families with Dependent Children (AFDC) and food stamps. In 1992, the average yearly AFDC family payment was $4,572, and food stamps for a family of three averaged $2,469, for a total of $7,041. (1) In that year, the poverty level for a mother with two children was $11,186. (2) Thus, these two programs paid only 63 percent of the poverty level, and 74 percent of a minimum wage job.
There are other welfare programs available, of course, but they either pay a minuscule fraction of AFDC and food stamps, or, if larger, they are collected by only a small percentage of all welfare recipients. For example, housing assistance trails a distant third on the total welfare budget, but only one-fourth of all AFDC recipients collect housing assistance, and even then their food stamp benefits are reduced if they do. Studies show that combined AFDC, food stamps and housing assistance lift fewer than one welfare family in five above the poverty line. (3)
The low payments, low participation rates, and exclusionary policies of these other welfare programs hasn't stopped some welfare critics from adding them all up together and claiming that the average welfare recipient collects some ridiculously huge sum, like $20,687 a year in California. Indeed, the Cato Institute, a libertarian think tank, has done exactly that. It's regrettable to see such flawed methodology pushed by a national think tank, even more dismaying to see their figures cited by political leaders like California governor Pete Wilson. (At least before more serious academicians corrected him). But it's probably the only way that welfare critics can continue to maintain the fiction that welfare rewards nonwork more than work. (For a fuller deconstruction of the Cato study, click here.)
Who takes the welfare incentive?
Because typical welfare payments pay less than a full-time job, it should not be surprising to find that most welfare recipients do not see it as an incentive to avoid work. Indeed, studies reveal this in two different ways: that most welfare recipients do indeed want and seek work, and that in a dynamic economy, the welfare rolls are ever-changing.
Many studies show that welfare recipients find welfare degrading and demoralizing, and greatly prefer the chance to work. (4) In fact, in March 1987, the General Accounting Office released a report that summarized more than one hundred studies of welfare since 1975. It found that "research does not support the view" that welfare significantly reduces the incentive to work. (5) This may seem contrary to common sense, but, as Norman Goodman points out in Introduction to Sociology: "Many 'common sense' beliefs are simply untrue. For example, many believe… that most people on welfare really don't want to work. [This is] false." (6)
Again, the "incentive" accusation fails because of welfare's inability to let families make ends meet. One study of Chicago welfare mothers found that their family's rent and utilities cost $37 more than the welfare check. Even for those few who received housing assistance, that left only $160 to cover all other monthly expenses, such as transportation, clothing, hygiene and school supplies. The typical food stamp allowance was insufficient, and many recipients actually went hungry near the end of the month. To make ends meet, the mothers had to receive income from somewhere else. Some of this came from absent fathers, friends and relatives, but almost half came from work -- work that typically paid $3 to $5 an hour. The authors of the study concluded that "single mothers do not turn to welfare because they are pathologically dependent on handouts or unusually reluctant to work. They do so because they cannot get jobs that pay better than welfare." (7)
Furthermore, it is incorrect to assume that the welfare rolls are filled with a substantial population of sedentary freeloaders who stay on for ten years at a time. Most welfare recipients leave within the first two years:
Percent of Time on AFDC Recipients (8) ------------------------------- Less than 7 months 19.0% 7 to 12 months 15.2 One to two years 19.3 Two to five years 26.9 Over five years 19.6
Some may think that even two years is too much, but one should remember
that almost all welfare is for mothers with children. (There are no federal
welfare programs for adults without children.) In 1993, the average person
collecting state unemployment benefits did so for four months. (9) But
the search for work is greatly complicated when one also has a child. A
great deal of money, time and energy must go for the care of the child,
which significantly detracts from any job search. There is also the bias
of employers against women, especially single women with children. Therefore,
we should expect mothers with children to take longer getting back on their
feet. Society could make it easier for them by providing child care during
their job search -- and in fact, many conservative critics of welfare are
beginning to see the economic reasons for doing so.
But the above numbers do not tell the whole story. A 1984 University of Michigan study examined welfare from 1969 to 1978 and found that families rarely depend exclusively on welfare income; instead they use it to supplement their income, especially during lean times. (10) Data from the U.S. Census reveals that most women who collected welfare intermittently in a two-year period spent most of the time off welfare legitimately employed. They spent an average of four months unemployed and looking for work before applying for welfare. They held 1.7 jobs, and 47 percent held two or more jobs. Forty percent of the welfare mothers worked about the same number of hours as all working mothers: 1,800 hours. (11)
As you can see, it is irrational to accuse people of aspiring to a lifestyle that doesn't even allow them to make ends meet or purchase the basic necessities of life. The evidence suggests quite the opposite: most welfare recipients would like better paying jobs -- or just any job.
Return to Overview
1. AFDC figures from U.S. Social Security Administration. Food Stamp figures from U.S. Department of Agriculture, "Annual Historical Review of FNS Programs" and unpublished data.
2. U.S. Bureau of the Census, Poverty in the United States, Series P-60, No. 185, 1993.
3. Sharon Parrott, "How Much Do We Spend on 'Welfare'?" Center on Budget and Policy Priorities, Washington, D.C., March 1995 (rev.), p. 10.
4. Joe Davidson, "Welfare Mothers Stress Importance of Building Self-Esteem If Aid System Is to Be Restructured," Wall Street Journal, May 12, 1995, p. A14.
5. The GOA report was summarized in Frances Piven and Richard Cloward, "The Historical Sources of the Contemporary Relief Debate," The Mean Season: The Attack on the Welfare State, Fred Block, Richard Cloward, Barbara Ehrenriech and France Piven, eds., (New York: Pantheon, 1987), pp. 58-62.
6. Norman Goodman, Introduction to Sociology (New York: HarperCollins, 1992), p. 5.
7. Christopher Jencks, Rethinking Social Policy: Race, Poverty, and the Underclass (Cambridge, Mass.: Harvard University Press, 1991), p. 204.
8. Overview of Entitlement Programs, Committee on Ways and Means, U.S. House of Representatives (U.S. Government Printing Office, 1994).
9. U.S. Employment and Training Administration, Unemployment Insurance Data Summary, 1993.
10. Greg J. Duncan, Years of Poverty, Years of Plenty (University of Michigan, Institute for Social Research, 1984).
11. Roberta Spalter-Roth, Making Work Pay: The Real Employment Opportunities for Single Mothers Participating in the AFDC Program (Institute for Women's Policy Research, 1994).