NY ranks high in welfare benefits

by E.J. McMahon |  | NY Torch

A full package of basic welfare benefits in New York State is now worth $38,004 — seventh highest among those offered by the 50 states and the District of Columbia, according to The Work vs. Welfare Trade-Off, a study released today by the Cato Institute.

Cato estimates the welfare package available in the Empire State is the “pre-tax wage equivalent” of $41,251, which is 110.5 percent of the actualstatewide median wage of 39,562 (i.e., the median amount made by people who are employed).

The package tallied up in the Cato study includes cash or equivalent values for the full spectrum of federal and state welfare benefits: Temporary Assistance to Needy Families (TANF), the Supplemental Nutritional Assistance Program (SNAP, formerly known as Food Stamps), Medicaid, the Women Infants and Children (WIC) program, and The Emergency Food Assistance Program (TEFAP), plus housing and energy subsidies. Using a narrower definition excluding everything but TANF, SNAP and Medicaid, the value of the basic welfare package was estimated at $24,007, ranking 5th among the states and D.C., which Cato estimated was equivalent to a pre-tax wage of $18,490.

So what’s the key takeaway here? Study authors Michael Tanner and Charles Hughes summarize it this way:

The current welfare system provides such a high level of benefits that it acts as a disincentive for work. Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit, and in 13 states it pays more than $15 per hour. If Congress and state legislatures are serious about reducing welfare dependence and rewarding work, they should consider strengthening welfare work requirements, removing exemptions, and narrowing the definition of work. Moreover, states should consider ways to shrink the gap between the value of welfare and work by reducing current benefit levels and tightening eligibility requirements.

 

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- E.J. McMahon is the Research Director at the Empire Center for Public Policy.