If the state of Nevada and particularly the Las Vegas Valley hope to move past dismal unemployment numbers, more must be done to provide incentives to actually work. This issue was rightly pointed out in a study from the Cato Institute on welfare benefits, as reported Friday by the Review-Journal’s Sean Whaley. The study provided a state-by-state value of welfare benefits, in an effort to show that those rates can often act as a disincentive to going back to work.
The study is based on a hypothetical family of three, a parent with two young children. In Nevada, the full value of benefits for such a family is $31,409 a year, which when equated to an hourly wage works out to $14.34 an hour, well above the state’s minimum wage of $8.25 an hour and nearly double the federal minimum wage of $7.25 an hour. That total also puts Nevada 14th nationally — finally, an area in which the state ranks high, though perhaps that’s not a good thing.
Nevada isn’t alone. Michael Tanner, senior fellow at the libertarian think tank and author of the study, said, “Welfare currently pays more than a minimum-wage job in 35 states, even after accounting for the Earned Income Tax Credit, and in 13 states, it pays more than $15 per hour.”
First off, it must be acknowledged that $31,409 a year isn’t a lot for a family of three, and that not all struggling families — or all other welfare recipients — qualify for the full value of benefits. Furthermore, it is indeed necessary to have a safety net in place for people who are out of work, who can’t work or who are otherwise in great need.
However, when the full value of benefits is realized, it clearly acts as a drag on getting some welfare recipients back to work. If we’ve learned nothing else from this recession (which purportedly ended four years ago), it’s that if you give people an incentive to not work, they will not work. State Sen. James Settelmeyer, R-Minden, told Mr. Whaley that when he was running for election, he spoke to a gentleman who was looking for work. Sen. Settelmeyer mentioned to the gentleman that he had just talked to the owner of a pizza place who was looking to hire someone, for $9.75 an hour — $1.50 above the state minimum.
The response? “The guy said he needed at least $15 to $18 an hour to go to work. He was making $10 an hour by sitting on his butt,” Sen. Settelmeyer said.
That shouldn’t come as a surprise. The expansion of the welfare state in the past few years, primarily via food stamps and Medicaid, has gotten to the point where people who have jobs and own homes qualify for aid. That’s never what welfare was supposed to be.
People will take advantage of the system. Not everybody, mind you. But those who do take advantage of it create a stigma that everyone who’s on welfare is lazy and doesn’t deserve the support. That’s unfair to those who truly do need that support, and it’s fundamentally wrong and unfair to taxpayers — the people who provide those benefits while also supporting their own families.
When the 2015 Legislature rolls around, the Senate and the Assembly must look at the state’s welfare program and determine whether parts of it are so generous that they invite abuse. Then the elected representatives should dial back the benefits or the eligibility for the affected parts. It’s time to fix the welfare system, so that the incentive to work actually works.