The economy recovered fully from the COVID-19 pandemic two years ago, yet more than 3 million workers are still missing from the workforce. University of Chicago economics professor Casey Mulligan and the Heritage Foundation’s EJ Antoni identify the reason why: State and federal governments are paying people not to work.
In their new study “Paying Americans Not to Work,” Mulligan and Antoni calculated how much cash and benefits a family of four with both parents not working gets in each state. They then compared those amounts to both the national median household income plus benefits, and the median salary and benefits of selected professions.
In five states, a family of four with two parents not working can make more in unemployment benefits plus Obamacare subsidies than the national median household income with benefits. Such states include Washington State, Massachusetts, New Jersey, Minnesota, and Montana. In Washington State, the idle household gets the equivalent of $122,653. In Massachusetts, the idle household gets the equivalent of $117,063.
In 12 states, the value of unemployment benefits and Obamacare subsidies exceeds the average salary and benefits of electricians, firefighters, teachers, and truck drivers, notes the Washington Examiner:
Unemployment benefits last a maximum of only six months, but it only requires a work history of another six months to qualify for unemployment benefits again. So one can work half the year and take the other half off without any loss of income. Moreover, the study only looked at unemployment benefits and Obamacare subsidies. It did not add in other benefits such as food stamps, which have weak work requirements in most states, or Section 8 housing subsidies. Throw these programs into the mix, and the payout for not working rises still higher.
When our government pays people who could work but chose not to more in cash and benefits than an average worker, it betrays everyone who does work. It is also bad for the recipients of the benefits and for the communities they live in.
People not in the workforce are less likely to participate in civic organizations, volunteer for charitable causes, or go to church. They are more likely to be unhappy and depressed and abuse drugs and alcohol.
If we want to fight inflation, part of which is being driven by people choosing not to go back to work, benefits and cash need to be cut for people who chose to live in idleness. It is unfair to tax wages highly to subsidize those content to sponge off society.
