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Tuesday, December 18, 2018

Welfare is designed to keep you poor. As soon as you start earning more money, they cut all of your benefits off faster than they are replaced by wages.


This is called the “welfare cliff.” If you start earning more money, you lose benefits faster than your wages go up, so you end up worse overall. This guarantees certain companies, like Wal Mart, a supply of workers at much lower cost than they would have to pay people in a fair, free market.
via learnliberty.org:

Pretend you are a poor, single parent of two in Chicago, earning $12 an hour, working full time, and determined to do what is best for your family. And suppose your employer, impressed with your work, offers you training for and promotion to a new job paying $15. Should you take the offer?


Introducing the “Welfare Cliff”

This example, which is taken from a clear, thorough, fascinating, and appalling study by the Illinois Policy Institute entitled “Modeling Potential Income and Welfare Assistance Benefits in Illinois,” illustrates with clear charts and tables what is known as “welfare cliffs” or the “low wage trap,” which can trap families in poverty.

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