Friday, August 23, 2013
By Derek Thomas
This week, the CATO Institute
released a study
suggesting that, despite growing poverty and declining wages over the past decade,
Hoosiers participating in anti-poverty benefits were living the good life –
making more than entry-level or minimum wage workers. Unfortunately, the
deceptive study presents a rare exception and presents it as rule.
First, from Sharon
Parrott at the Center on Budget and Policy Priorities on why the study is “fundamentally
flawed”:
“It substantially overstates the help that
poor jobless families receive: … very few families get that much help. Just one-third of families that are eligible
for cash assistance in the state they live in actually receive it. Among those who do get help from TANF, Cato’s
own figures show that just 15 percent also receive housing assistance.”
This is important as it is especially
true for Indiana, which should, by the way, be a case study on the negative
outcomes of punitive participation requirements that worked successfully to
discourage dramatic reductions in TANF enrollment among Hoosier families
during the Great Recession - just when they needed it the most. These are, by the way, the very same policies that CATO recommends. Only
two other states, Arizona and Rhode Island, saw greater percent decreases in
TANF caseloads during the same time period.
In Fort Wayne, the report was
presented to Hoosiers as the “typical
welfare recipient” or simply “those
on welfare”. However, this is very misleading.
For perspective, from 2007 – 2011, during the
height of the Great Recession, the number of unemployed Hoosiers increased by
92.1% while TANF caseloads fell 51% – from 40,985 families to 20,046 families.
In 2013, there were 29,016 individuals. That’s equal to just 2.9% of the more
than 1,000,000 Hoosiers in poverty. Even more, as the study correctly shows,
only 11.9% of those 29,016 individuals are also receiving housing assistance.
Altogether, the number of families in Indiana that could potentially (although, not likely) be participating in all of the
other programs under the CATO assumption is 3,452. That’s just 0.34% of the 1,000,000+ Hoosiers in poverty. By the way, for a family of three, eligibility for TANF is
at or below an annual income of $7,104.
If we’re serious about reducing
poverty, and increasing the well-being of all Hoosiers, we should be less
concerned about the minuscule percentages in CATO’s disingenuous report, and
more concerned about the following, very real stats:
more than 1 in 5 children live in poverty and 47 percent are low-income (more
than all neighbor states, including Kentucky); more than 1 million Hoosiers
over the age of 18 are in poverty and 2.24 million are low-income; more than
70% of Hoosier jobs are in occupations that pay less than 200% of the Federal
Poverty Guidelines – that’s less than $39,060 for the same family of three
referenced in their report (a single parent with two children); we have a
larger share of jobs in occupations that pay at or below poverty wages jobs
($19,530 for a family of three) and jobs that pay at or below minimum wage than
all neighbor states, including Kentucky; and wages have declined for lower- and
middle-income Hoosiers over the past decade, while worker productivity has
soared.
Rewarding nearly a half-million
hard-working Hoosier by increasing the minimum wage to its rightful levels
would be a serious start, and has the overwhelming support of Americans.
Instead, CATO, who by the way believes the U.S.
should abolish the minimum wage, also suggests that for struggling
families, the answer is to further cut benefit levels in an effort to nudge
families into picking up a third, or, maybe a fourth job to make ends meet.
