Eagle Forum Legislative Alerts

Wednesday, February 12, 2014

Minimum Wage and Welfare: A Tradeoff

The Democrats have selected raising the minimum wage as THE issue to protect them from public opposition to the Obamacare fiasco which is dimming their hopes to retain the U.S. Senate in this year's elections. But raising the minimum wage may actually be something Americans can support because it can reduce the gigantic total of our hidden welfare programs. Yes, hidden. We call the welfare state "hidden" because most people have no idea that it has grown to nearly a trillion dollars a year. And most people think "welfare" goes all or mostly to the unemployed, whereas the truth is that most of it goes to working Americans whose income is below a government-designated poverty line.

The hidden welfare state has mushroomed into a massive complex of at least 79 means-tested programs doled out by at least nine federal agencies, plus state funds. Included in this welfare total are food stamps (for which spending has doubled since 2007), the Earned Income Tax Credit, housing aid, energy assistance, child care, and Supplemental Security Income. Since the end of the Reagan Administration, our welfare handouts have grown beyond any relation to actual need. So-called welfare has grown faster than growth in our economy, our population increase, the rise in the poverty rate, and annual federal expenditures on defense, education, Social Security, or Medicare.

One in 3 Americans now draws benefits from at least one of the 79 programs. The so-called bipartisan welfare reform of 1996 abolished only one of the 79 programs, and Barack Obama gutted the heart of that reform by illegally eliminating the "work" requirement. If raising the minimum wage raises the worker above the government-prescribed poverty level, raising the minimum wage could turn out to be a benefit for taxpayers.

Listen to the radio commentary here:

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