Cato Institute Flawed Study

The Cato Institute updated a report from 1995 and published what can only be characterized as the dumbest research projects ever published.  The report titled "The Work vs. Welfare Trade Off: 2013" might be the most absurd collection of disjointed statistics that has ever been put down on paper.  This report has no redeeming value in any policy debate that I could think of except maybe in showing that the minimum wage is too low in many states.  Cato "researchers" have lumped together entitlements such as food stamps with housing assistance limited by a significant lack of supply to Medicare limited to a small number of people to make the case that "welfare" may pay better than work pays.  Not to mention that some of the assistance mentioned such as excessive asssitance from Medicaid might disqualify the person from work because of a disability. 

This is even more fictitious than the "McDonald's model budget" that many made fun of back in July when fast food workers were on strike.  Most of the programs used in the report are not available to most poor people or are not an option in many communities.  There are so few who can receive enough government assistance to come even close to the money earned in a job that it is not worth comparing the two.  Even those who cannot work and are considered fully disabled by the federal government will not receive enough assistance to live independently.  It is amazing that they have grouped all these programs together and called them "welfare" since Cato shows a total disdain for the welfare of poor people.  Maybe they should have used a term that shows the Cato staff distain for these American citizens struggling with poverty and asking for a hand up like "Moochers" or "the dole."

They use Temporary Assistance for Needy Families in their study, which was reformed out of existence for most of the population during the Clinton Administration.  Very few qualify for cash assistance and there is a life time hard limit on assistance which is not taken into account. For example, in Cuyahoga County there were only 8,700 people on cash assistance in March of this year while there were around 230,000 people living below poverty at the same time in the County.  Medicaid is also extremely limited in most states and very few qualify for the help.  Housing assistance has such a long waiting list that it is out of reach for most.  For example, 65,000 people applied in 2011 for a voucher and only 10,000 were selected in the lottery.  Those 10,000 will have to wait for seven years to make it to the front of the list.  Food assistance and WIC have no cash value.  They are only used for food and cannot be used to pay for the high cost of day care or a bus ride to get to work. 

If the study is going to assign cash values to food stamps and other benefits that have no cash value then why didn't they do the same for the benefits received from full time employment?  Why not assign a cash value to the small number of minimum wage employees that do in fact receive health benefits?  Or they could assign a cash value to workers compensation benefits?   They could have given a value to the food that some fast food workers receive as a benefit of working those difficult jobs.  Why convert benefits into cash on only one side of the ledger?   To be fair in this fantasy world that the Cato Institute created they should assign a dollar value to all benefits received by any minimum wage worker and compare since they assigned a dollar figure to every government assistance program even if only a handful of people receive that assistance in the community. 

The basis for the entire report does not make sense.  No one who understands these programs would group them together and then try to convert them to a dollar amount and then try to compare them to work.  It is a bridge too far into fantasyland.  If anything the conclusion of this flawed report should be that minimum wage must be dramatically increased so that no where in the United States would assistance exceed work revenue, but that is not the recommendation.  Or that public assistance programs need to be dramatically expanded so that so that the Cato Institute report could possibly make sense.  Sadly, neither conclusion is contained in this report.  Only, Karen Kasler in the Ohio Statehouse Bureau of the Ohio Public Radio and Television news covered this story that I could find.  Unfortunately, they tried for balance instead of blasting the lazy, uninformed report for adding nothing to the public debate.  No where in Kasler's story are the words, "idiotic, infantile, stupid or waste of paper."  

Brian Davis

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