Published Thursday, March 14, 2013
By Walter C. Jones
Morris News Service
ATLANTA – A new, university study demonstrates that many of the government benefits the state offers actually discourage poor people from adopting more productive behaviors.
By Wednesday, a day after the release of the report, groups on both sides of the political divide were praising or dismissing it.
"At least in some earnings ranges, the tax-benefit system discourages low-income people from investing in education and training, discourages labor supply, encourages fertility, and provides little incentive to marry or to remain so. To the extent that households are aware of and respond to such incentives, the tax-benefit system creates poverty traps rather than promoting behaviors that enable families to escape poverty," wrote the authors from Georgia State University. One is an economics professor and the others are students working at university's Fiscal Research Center in the Andrew Young School of Policy Studies.
The researchers tracked each of the government benefit programs, such as Temporary Assistance to Needy Families and food stamps as well as income-tax rules, and then they looked at how families of different sizes and incomes would react to them.
They noted that state and federal welfare benefits don't come from one, comprehensive program. That means there are points where income and family-size result in eligibility for some benefits but not others, signaling conflicting incentives for the people receiving them.
Conservatives embraced the study as backing up what they already knew.
"U.S. taxpayers support over 100 anti-poverty programs spending nearly $1 trillion each year, an amount equal to $20,610 for every poor person in America, or $61,830 per poor family of three," said Kelly McCutchen, president of the Georgia Public Policy Foundation, a market-oriented think tank. "Yet, the poverty rate remains high, and welfare recipients are all too often trapped in multi-generational cycles of poverty."
Rep. Jason Spencer, R-Woodbine, also agreed with the findings. He was the sponsor of one of the bills last term that would have required welfare recipients to take drug tests.
"When the government steps in and subsidizes behaviors that in previous generations would have resulted in great hardship or even death, a sort of social Gresham's Law takes place where bad behavior chases out the good," he said. "Why have a father and husband around when the state will assure your financial situation? Why find a new job when you can collect unemployment for some time?"
But Alan Essig, executive director of the Georgia Budget and Policy Institute that advocates for greater spending on social programs, downplays the conclusions of the study.
"I don't think that the study shows that the programs are bad," he said.
Instead, it demonstrates the need for better coordination between the various eligibility points for the different programs, according to Essig.
"Research overwhelmingly shows the benefits of the programs, especially to kids," he said.