NC Budget and Tax Center

Poverty and the safety-net: SNAP works

Poverty continues to impact 1 in 5 North Carolinians, according to 2012 Census Bureau Data released last week. The extent of poverty would be far greater without the safety net and work supports, however. This post is part of a blog series that will explain how the new poverty data demonstrates the important role public programs play and the need for continued support.

Widespread poverty and stagnant living standards have become the status quo in North Carolina, according to the Budget and Tax Center’s analysis of Census data released last week. 2012 marked yet another year of the official economic recovery whereby the gains of economic growth passed over low- and moderate-income North Carolinians. High rates of hardship are persisting because of the state’s ongoing job shortage and the rapid acceleration of low-wage work that fails to provide a pathway to the middle class.

There is some good news in the Census data, however. The poverty rate would have been much worse if public policies weren’t in place to provide a necessary safety net. Read more

NC Budget and Tax Center

Don’t be misled by flawed Cato study purporting “welfare” pays better than work

According to a new report released by the conservative Cato Institute, the “welfare system provides such a high level of benefits that it acts as a disincentive for work.” This so-called hidden prosperity of the poor theory just doesn’t stand up to reality.

The report’s findings should not be seriously considered by any policymaker, or anyone else, because there are several major flaws in the analysis. The authors incorrectly assume that a “typical” family qualifies for and receives assistance from all seven of the most common safety-net programs while non-working families get none. There are two crucial blunders with this methodology.

First, the authors greatly exaggerate the public benefits that most people living in poverty actually receive. To bolster their case, the authors assume that the “typical welfare family”—which they define as a single mother with two children—receives each of the following services: Temporary Assistance for Needy Families (TANF), SNAP (formerly food stamps), WIC (a nutrition program for pregnant and postpartum women and young children), Medicaid, housing assistance, utilities assistance, and emergency food assistance. But this is simply not the case in North Carolina or anywhere else in the United States. The vast majority of poor people do not receive all the services they are eligible for, in part because there are not enough funds to allow that. Read more

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Another reality check on spending and deficits

Dean BakerOne of the country’s keenest economic policy observers, Dean Baker, has an excellent take down of Washington Post columnist Robert Samuelson’s latest demands that the U.S. slash social spending this morning at the Center for Economic and Policy Research website. His message: America’s obsession with near-term deficits remains utterly illogical and counterproductive: 

“First, the budget is only constrained at the moment by superstition. There is no obstacle to the government borrowing more money to meet needs and put people back to work. We are not spending more money because we have superstitious people with large amounts of power who are making claims about the dangers of deficits that they cannot support with evidence. Rather than lecturing seniors, who have a median income of $20,000, on the need for lower Social Security and Medicare benefits, Obama could try to confront the people spreading superstitions about deficits….

…In fact, according to the Social Security Trustees projections, Read more

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Real poverty

Senior Researcher Arloc Sherman of the Center on Budget and Policy Priorities put up an extremely helpful and illuminating post yesterday afternoon on the group’s Off the Charts blog about poverty.

It shows a critical fact that is frequently misrepresented or not reported in the public debate:  While poverty has been on the rise over the last decade, non-cash public benefits like housing assistance and food stamps (SNAP) do make a significant difference in keeping it in check.  He notes that because the “official” poverty rate is based on pre-tax cash income, it ignores important non-cash benefits that, when factored in, lower the poverty rate.

This does not mean, however, as conservatives frequently try to argue, Read more

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A brief history lesson on the importance of unemployment insurance

This morning, Raleigh’s News & Observer was kind enough to publish an essay I wrote that details some of the history of unemployment insurance in the United States, its importance in making our economy work more effectively and the recurring, counter-productive efforts by various misguided groups to undermine it. Unfortunately, space limitations forced the elimination of  a couple of passages from my original draft.

Happily, the folks at NC Policy Watch (for whom I hope to be contributing on an occasional basis in the days to come) have been kind enough to allow me to publish the entire piece below. I hope you will enjoy it.

Unemployment compensation: A win-win for business and families Read more