Inside a Cato Institute Report: Loads of Hogwash


First published in the Daily Hampshire Gazette, Friday, August 23, 2013.

A recent headline splashed across the front page of the Boston Herald — “Study: Welfare Pays Better” — highlights fundamental misconceptions and inaccuracies about the millions of families struggling to get by in Massachusetts and around the nation.

The article discussed a study purporting to show that high welfare benefits are a disincentive for recipients to go to work. The study was done by the Cato Institute, a conservative think tank that includes David Koch (the nation’s sixth-richest person).

The newspaper stated that “Massachusetts ranks third nationally with $42,515 in welfare benefits handed out to the ‘typical recipient,’ behind Hawaii at $49,175, and Washington, D.C., at $43,099.” The number is startling — $42,515.

If only it was accurate.

A closer look at the numbers illustrates how misleading this study actually is.


The authors include the value of Medicaid in that $42,515 calculation. When most of us talk about what we make, we don’t include the value of our health coverage as part of our salary. Maybe we should — but we don’t.

So, deduct $9,900 from the total.

These authors also made fundamental mistakes about the way housing subsidies work. The study assumes that all families received $17,203 in housing assistance. This is a number based on the allowable rent in Boston — not the rest of the state. People who receive help with housing also are required to pay 30 percent of their income in rent.

While they keep that inaccurate number in the calculation, they admit that not everyone on welfare receives help with housing (less than half do in Massachusetts). And not everyone receiving help with housing is on welfare.

So, deduct $17,203 more from the total.

Fuel assistance and WIC programs are also included in the bottom line — programs that are not guaranteed and are chronically underfunded. The study also includes emergency food given out at food pantries. Not every family receives these benefits either — and many who do are not receiving a welfare check.

The name of the program that we often call welfare is actually Temporary Assistance for Needy Families (TANF); this is the only cash that the family actually gets. It’s temporary assistance. A family is eligible for 24 months of help in a five-year period. The time limits can be waived for good reasons like domestic violence and disability, but families can be and are terminated from the program.

The average cash benefit in Massachusetts is $456 a month or $5,472 per year. If a family has a housing subsidy, their cash benefit as well as other benefits go down.

Worse than the misleading numbers in this study is the insinuation that massive numbers of people are taking advantage of the system or not working.

In reality, those receiving welfare in this state are most likely to be children.

Their mom is more likely to be a single white female in her 20s, with 12 years of education who isn’t receiving child support. This child is younger than 11 and is even more likely to be an infant or a preschooler. Her mom receives, on average, $456 in cash for a couple of years and then joins the workforce.

The report also implies that welfare is such a good deal that there is no reason for people to give up the assistance. But the caseload in Massachusetts went down 30 percent from 1997 to 2010 and continues to decline.

In this country we believe that everyone needs to be self-reliant. But, in reality, we’re not. We depend on our family and friends for care and support. We depend on our employers or our customers for our income. We rely on the government to protect us, educate our children and assist us as we grow old.

Do some people take advantage of assistance? Unfortunately a very small minority may, from time to time. But the vast majority of those seeking help are the underemployed, disabled, veterans, those laid off from work and children.

Our unemployment/underemployment hovers at 13 percent. There are not enough affordable housing units, childcare spaces, adult education seats and full-time jobs at a living wage in this state for everyone who needs them. And the inequity between the wealthiest and poorest Americans has never been greater.

The Cato Institute has a long history of supporting Social Security privatization, while opposing early childhood education and public transit. Those releasing this report were likely hoping to distract us from the troubling trends that are at the root of our struggling economy — challenges that require real solutions.

Don’t let them get away with it.

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