In a July 2012 forum at the American Enterprise Institute, Gary Alexander, former Pennsylvania Secretary of Public Welfare, delivered a stunning presentation on the status of welfare in the United States. His conclusion: by providing food and health care subsidies to lower-earning citizens, the U.S. government is in effect paying a huge swath of the population not to work.
A single mother living in the U.S. state of Pennsylvania with two children of one and four years old, Alexander contends, reaches a maximum combination of benefits and income at a gross earned income of $29,000. From that point, increases in gross income reduce potential government benefits. Section 8 housing assistance, for example, would end. Only when the mother’s gross paycheck reaches $69,000 does she begin to earn more than she would receiving government benefits. Thus, it is not in our single mother’s best interest, if she takes full advantage of all government programs, to work any job paying more than $29,000 but less than $69,000 per year. She is, in essence, paid not to work.