Poor People Are Poor But Not Stupid

Writing for the Washington­based Heritage Foundation, Robert Rector and William Lauber, in their aptly titled study, "America's Failed $5.4 Trillion War on Poverty," report the 1993 tab for federal, state, and local poverty programs was $324 billion. Between 1965 and 1994 poverty programs have cost taxpayers $5.4 trillion in inflation adjusted dollars. That's a lot. With $5.4 trillion you could purchase every U.S. factory, all manufacturing equipment, and every office building. With what's left over, one could buy every airline, trucking company and our commercial maritime fleet. If you're still in the shopping mood, you could also buy every television, radio and power company, plus every retail and wholesale store in the entire nation. There wouldn't have enough money to buy our fishing, agricultural and forestry industries, but just wait ­ projected welfare spending over the next five years is $2.8 trillion.

Do poor people get all this money? Figure it out for yourself. In 1993, there were 40 million poor people and $324 billion spent on poverty programs. Dividing that money up and simply giving it to the poor would yield $8,100 a person or $32,400 for a family of four. A lot of the money goes to the poverty industry's double parasites ­ people who suck the blood of the affluent and fester the sores of the poor.

Welfare advocates, experts and congressmen try to convince us that people don't join the welfare class just to receive a measly $400 monthly check. They are right but for the wrong reason; welfare benefits are much higher. The Washington­based Cato Institute published a study "Work vs Welfare Trade­off." Authors Michael Tanner, Stephen Moore, and David Hartman compare welfare benefits to the salary a person might get by working before taxes were taken out. There are 77 different welfare programs but the authors based their calculations on the six most common: AFDC, food stamps, Medicaid, housing, nutrition assistance and energy assistance.

In Oregon, that welfare package for a single mother with two young children is worth $16,959. To net $16,959 by working, that mother would have to be able earn a $19,000 pre­tax yearly salary or $9.23 an hour. In Hawaii, that mother's welfare package would come to $27,736. That means she'd have to earn a $36,000 pre­tax salary or $17.50 per hour to break even with what she gets on welfare. The pre­tax hourly wage equivalent of welfare benefits in New York City is $14.75, Philadelphia $12.45, Baltimore $11.35, and Detroit $10.90.

Many welfare recipients don't have skills to earn those hourly wages. From a short run economic point of view, it may not make much sense to give up welfare benefits, worth $12 or $14 an hour, in exchange for a $5 or $6 an hour job, plus the drudgery of getting up in the morning, traveling, and taking orders all day. Surveys show that nearly 70 percent of welfare recipients are not looking for work. Not working may be a rational short run decision but it has devastating long run consequences.

To finance the welfare agenda Congress forces each taxpaying household to be a slave to the tune of $3,400 a year in taxes. A person may object to my reference to slavery. Slavery is the appropriate generic term considering the essence of slavery is one person being forcibly used to serve the purposes of another. That's why I stand so steadfastly against poverty and corporate handouts. It must be my roots that makes me a latter­day abolitionist.

 

Walter E. Williams
November 17, 1995
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