If we were really serious about reducing poverty and government dependence as it relates to the economy, people would be making more money working than not working. And people who are not retired, or physically or mentally disabled, would make less money in cash payments, than people who are working. Even if they are low-income workers. Because we would have laws in place that prevent the unemployed who are on Welfare Insurance from making more money than people who are working and collecting cash payments. And they would still get the public assistance that they need to survive like. Food Assistance, public housing, Medicaid to use as examples. But they would receive less in direct income than someone whose working full-time whatever they are making. Instead of having this policy that basically says, “look, you are barely surviving at all on your own right now. How about you quit your job and get on Welfare where you could make more money.” Which is what we’ve been doing since the New Deal and what we should do instead is incentivizing people to work over not working.
You want more people working and fewer people not working and collecting from public assistance, then work simply has to pay more than not working. And work has to pay enough so people prefer to work. So instead of having a minimum wage for workers, you would apply that to the unemployed on Welfare. Where they would make what someone working full-time making 7.25$ an hour would make. But low-income workers would make 10$ an hour working full-time. And still collect the public assistance that they would be eligible for with their income. But also eligible for financial assistance for eduction and job training. So they can get themselves better skills and leave their low-skilled low-income job for a good job. That allows for them to leave public assistance for the middle-class. And someone whose on Welfare, but in an education or job training program is now making 8.25$ and hour. While they are preparing themselves to go to work. Instead of 7.25$ an hour that the person on Welfare whose not in education or job training currently.
A low-income worker now making at least the living-wage at 10$ an hour is still working, but also eligible for financial assistance to go to school, or to a job-training program. So they can improve their skills and get a good job. That gets them off of public assistance all together and into the middle-class. Because now we are incentivizing work and independence over dependence. And a difference between what a welfare state is, or an entitlement society, compared with an empowerment society, that empowers people to be able to take care of themselves.
Brookings Institution: Ron Haskins- America’s Welfare Transformation