Sunday, August 30, 2015

When Work Is Punished: Raising The Minimum Wage And The Perverse Incentives Of The Welfare State

The $15 minimum wage will not only act to dispense with jobs but in many cases results in perverse incentives for employees to quit the jobs they and those without jobs not to work.  It is called the "welfare cliff."
From the article:
A study by the Illinois Policy Institute shows just how dramatic the effect of “falling off the cliff” (so to speak) can be. In one of the most startling findings for instance, if a single mother raising two children were to accept a pay raise from $12 to $18 per hour, her total resources would fall by nearly 33%. Here’s more:
For single-and two-parent households in Illinois, there is a significant welfare “cliff” where the household may become worse off financially as they work more hours or as their wages increase. That is because the available welfare benefits decline by a greater amount than the increase in earned income.
And Illinois is not alone . . . 
Article here:


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