by Craig Masters
Any economic recovery will have to overcome a resistance from the population created by the welfare system that depends on the very recovery it has now begun to destroy. An ever rising percentage of the half of college graduates from the past few years who have been fortunate enough to find jobs at all have found those jobs pay disappointing low salaries in areas outside their course of studies. But the declining economy is only one of three reasons for fewer white collar jobs. The second problem is the federal student loan program that created an industry of low quality diploma mills charging excessive rates for little more than the skills set these graduates use to learn in high-school. Companies simply cannot afford to risk high starting salaries on nothing more than a diploma as evidence of capability. But the third leg of this trifecta working against the American economic recovery is the government itself.
While companies compete to hire experienced, job-tested workers, a new opportunity is emerging – not working is becoming an acceptable alternative. In 2011, federal and state welfare spending averaged $61,194 per poor household per year. And while it’s true that much of that money never leaves the bureaucracies that manage the 83 different federal welfare programs, the equivalent after tax income afforded the ‘poor households’ exceeds $33,000 per year.
The numbers are beginning to work in favor of not working. For a family of four to have $33,000 left after all taxes are paid, gross income needs to be almost as high as the $61,000 figure the government is charging taxpayers to support the poor. These means-tested welfare programs are now the single largest budget item in federal government spending; even exceeding national defense.
Senator Jeff Sessions (R-Alabama) requested and released the report from the Congressional Research Service that revealed these and other mind-blowing numbers. The U.S.Census Bureau identifies the 2011 qualifying poverty level for a family of four as having an income of $23,000 per year. Given the $33,000 equivalent figure from the CRS report, it would appear the government is only passing through one-dollar out of each six-dollars it collects in the name of the poor. But that’s a story for another day.
The welfare system is undermining the incentive to work. Where is the sense in spending thousands of dollars and years of study to get a degree that earns you a lower lifestyle than a family that lives entirely on government assistance? Even a newly-graduated aerospace engineer needs to rise above the average starting salary before exceeding the welfare lifestyle. Where is the reward for a person to learn a trade like a plumber, only to start out at less than $30k per year and spend years on the job to reach the median salary level for this area of only $42k/year? This puts the after tax income well below the lifestyle affordable to the welfare family.
In his October 27, 2012, article on Frontpage.com, Daniel Greenfield puts it this way, “The welfare state isn’t run for the benefit of welfare recipients, it’s run for the bureaucracy that dispenses welfare and their contractors, with the welfare recipients as the pretext for the whole scam.” That perhaps explains the incentive for government to continue to expand the very programs that are eroding the foundation of America.
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