The Heritage Foundation reports five myths about welfare and child poverty that often lead to misguided policies.
Myth: The welfare state in the U.S. is small.
Fact: The U.S. welfare system is enormous. The federal government operates over 90 means-tested welfare programs that provide cash, food, housing, medical care, and targeted services to poor and lower-income Americans. In 2014, federal and state governments spent over $1 trillion on these programs; 90 percent of this spending, or $924 billion, went to cash, food, housing, and medical benefits.
Myth: Welfare benefits are meager and insufficient.
Fact: The combined benefits available for a single mother with two school-age children working full time at the federal minimum wage ($7.25 per hour) would increase her earnings to the equivalent of an annual income of $47,385 per year or an effective hourly wage of $22.78 per hour.
Myth: Due to a lack of government support, poverty and deprivation are widespread.
Fact: The government’s poverty measure says very little about the actual material living conditions of the poor. Examining other government data provides a very different picture of poverty in the United States. For example, the average poor household in the United States has air conditioning, a car or truck, cable or satellite TV, a computer, a cell phone, and (if the household has children) a video game system. They have enough to eat and are not undernourished. They live in comfortable housing that is in good repair and have more living space than the average non-poor person in Germany, France, Sweden, and the United Kingdom. The average poor household in the United States also reports that they have access to medical care when they need it.
Myth: Welfare policy substantially penalizes work, trapping families in poverty.
Fact: Welfare benefits will continue at roughly the same level for a parent who takes a low-wage job. (While Temporary Assistance for Needy Families and food stamp benefits do decrease as earnings rise, Earned Income Tax Credit and Additional Child Tax Credit benefits rise; the two effects largely offset each other.) It is inaccurate to claim that high welfare benefit rates (or marginal tax rates) cause low-wage parents not to work or to work little. The more likely problem is that generous benefits may reduce the financial necessity of work or of full-time work.
Myth: Raising the minimum wage is an effective strategy for reducing child poverty.
Fact: A parent who sought to support a family with a minimum-wage job alone would indeed be poor, but under the current welfare system, no parent is expected to support a family solely on minimum-wage earnings. The system generously allows parents to combine earnings and welfare. Raising the minimum wage would actually push many families deeper into poverty by destroying the jobs they need to climb above the poverty level. When the government arbitrarily raises the wages of low-skill workers, businesses will hire fewer of those workers. The job-loss effects from an increase in the minimum wage will focus on the most vulnerable within the low-skill group.
Read the full report here or download it in PDF format.
Source: The Heritage Foundation