The Committee to Unleash Prosperity has released a startling new report entitled “Paying Americans Not to Work.” I
It reveals that a family of four can receive over $100,000 annualized equivalent in cash and benefits in three states, and over $80,000 in 14 states, with no one working. The analysis was written by Casey Mulligan, a professor of economics at the University of Chicago who served as chief economist at the White House Council of Economic Advisors and EJ Antoni, a research fellow for regional economics in the Heritage Foundation’s Center for Data Analysis.
The study reveals that with existing unemployment benefits and the dramatic recent expansion of ObamaCare subsidies, a spouse would have to earn more than $80,000 a year from a 40 hour a week job to have the same after-tax income as certain families with two unemployed spouses receiving government benefits. In these states, working 40 hours a week and earning $20 an hour would mean a slight REDUCTION in income compared to two parents receiving unemployment benefits and health care subsidies.
This study also finds:
• In 24 states, unemployment benefits and ACA subsidies for a family of four with both parents not working are the annualized equivalent of at least the national median household income.
• In 5 states, those two programs provide the same family with both parents not working the annualized equivalent of at least the national median household income and benefits.
• In 14 states, unemployment benefits and ACA subsidies are the equivalent to a head of household earning $80,000 in salary, plus health insurance benefits.
• This is a higher wage than is earned by the national median secondary school teacher, electrician, trucker, machinist, and many other jobs.
• In more than half the states, unemployment benefits and ACA subsidies exceed the value of the salary and benefits of the average firefighter, truck driver, machinist, or retail associate in those states.
• In a dozen states, unemployment benefits and ACA subsidies exceed the value of the salary and benefits of the average teacher, construction worker, or electrician in those states.
• A family of four with income over $227,000 qualifies for ACA subsidies in all states and families earning over $300,000 a year still qualify for ACA subsidies in 40 states and DC.
While many of the subsidies pre-existed the COVID pandemic, the large amounts of funds provided by government to individuals magnified the issue.
In 2020, The American Institute for Economic Research’s Philip Magness wrote: “’Never let a crisis go to waste,’ the old adage goes. Unfortunately, political activists and public officials from across the spectrum are now taking this advice to heart amid the ongoing coronavirus pandemic. While many policy responses to the current crisis are well-meaning, even if misguided, be vigilant of those who would cynically weaponize it to advance their pre-COVID ideological goals…The experience with peacetime regulations of this sort in other countries suggests this has a high probability, carrying with it a labor-market rigidity that translates into persistently high unemployment. Sadly, one also gets the sense that Saez and Zucman would be willing to accept that outcome in exchange for getting their broader economic agenda passed under the cover provided by the pandemic.”
Programs that result in high unemployment, and the bizarre economic reality that it may be more profitable to take government handouts than to work, greatly assists those seeking to replace capitalism, which has brought more prosperity to more people than any other system, with socialism, which has produced markedly inferior results.
Following the reduction of the COVID crisis, it was reasonable to expect the U.S. economy to rebound sharply. The continued presence of overly generous government handouts, combined with the Biden Administration’s inflationary war on energy, destroyed that opportunity.
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