The welfare state is out of control, new study shows

Does this sound like a system incentivizing the right things?

massive labor shortage continues to hamstring the economy, with millions more empty jobs than unemployed job-seekers. All the while, millions of people remain on the sidelines, with the labor force participation rate significantly below the pre-pandemic norm. Why are so many potential workers sitting idle while jobs need to be filled?

Well, the astoundingly bloated nature of America’s welfare state offers one explanation, according to a new study . Conservative economists Stephen Moore, E.J. Antoni, and Casey Mulligan of the Committee to Unleash Prosperity analyzed what a typical four-person family, with two nonworking adults, could receive in welfare benefits, including both unemployment and healthcare subsidies, across the 50 states.

They found that in three states, Washington, New Jersey, and Massachusetts, this typical family can earn the equivalent of more than $100,000 annually without working, thanks to various government programs.

Meanwhile, in 14 states the benefits are equivalent to an $80,000 annual salary or more. In these states, welfare pays better than the typical job of a secondary school teacher or electrician, according to the study. In 24 states, languishing on welfare pays better than the typical salary earned by a firefighter, truck driver, or machinist.

Does that sound like a system incentivizing the right things?

There are undoubtedly multiple factors driving the labor shortage, but this simply has to be one of them. The most basic lesson of economics is that people respond to incentives. And when pathways exist to receive above-average incomes without working, many people will choose that over toiling and working hard to earn less. The inevitable result is lower employment, slower economic growth, and a dearth of dignity among those who’ve been incentivized out of work.

You don’t have to take my word for it.

“A key policy question these days that has befuddled federal lawmakers is why so many millions of Americans have not returned to the workplace in the post-Covid era,” the study’s authors conclude. “The U.S. is ‘missing’ more than three million workers of working age that could be working and were working prior to Covid but are not today. This study shows that one factor contributing to the dearth of workers is the generous benefits paid to families without workers.”

The takeaway here is clear. If we want our economy to recover fully from the COVID-19 pandemic and get roaring again, we have to reform our social spending programs so that we once again incentivize work, not welfare.

This column originally appeared at the Washington Examiner.

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Brad Polumbo
Brad Polumbo
Brad Polumbo is a libertarian-conservative journalist and co-founder of Based Politics. His work has been cited by top lawmakers such as Senator Rand Paul, Senator Ted Cruz, Senator Pat Toomey, Congresswoman Nancy Mace, Congressman Thomas Massie, and former UN Ambassador Nikki Haley, as well as by prominent media personalities such as Jordan Peterson, Sean Hannity, Dave Rubin, Ben Shapiro, and Mark Levin. Brad has also testified before the US Senate, appeared on Fox News and Fox Business, and written for publications such as USA Today, National Review, Newsweek, and the Daily Beast. He hosts the Breaking Boundaries podcast and has a bachelor’s degree in economics from the University of Massachusetts Amherst.

2 COMMENTS

  1. Sounds like hyperbole
    A person cannot draw ui indefinitely
    The claim of a surplus of jobs is dubious at best. Counting low paying jobs in the same category as jobs which pay a living wage is disingenuous.
    Is the welfare state out of control? Most definitely. But, that out of work oil field worker with a family is not going to waste his time working at Starbucks when he can spend it searching for a real job until he has no other choice

  2. ” but this simply has to be one of them”…and repubs wonder why people dont listen to them?? Polumbo dont quit your day job. you are clueless if not psychotic with the rest of the repubs. STEM grads are taking crappy jobs or are unemployed in wash st. the pandemic pay ended 18 months ago you fool. Rents have doubled as lots of foreigners move in..

    why dont you look at shadowstats dot com..you might learn something..nobody believes your re- pub drivel

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