Thursday, July 12, 2012

In Obama's World, It's Better To Be A Single Mom On Welfare

The U.S. welfare system sure creates some crazy disincentives to working your way up the ladder. Benefits stacked upon benefits can mean it is financially better, at least in the short term, to stay at a lower-paying jobs rather than taking a higher paying job and losing those benefits. This is called the “welfare cliff.”

Let’s take the example of a single mom with two kids, 1 and 4. She has a $29,000 a year job, putting the kids in daycare during the day while she works.

As the above chart  – via Gary Alexander,  Pennsylvania’s secretary of Public Welfare — shows, the single mom is better off earning  gross income of $29,000 with $57,327 in net income and  benefits than to earn gross income of $69,000 with net income & benefits of $57,045.


Post a Comment

Subscribe to Post Comments [Atom]

Links to this post:

Create a Link

<< Home